How do settlement agreements affect your mental health?
You may be aware of some of the legal aspects of settlement agreements and what you have to do to negotiate one successfully. But have you thought about the impacts of a settlement agreement on the emotional and psychological well-being of the individuals who sign them?
Settlement agreements aren’t just about paperwork and signatures, or a legal resolution to a disagreement with your employer – they’re also a personal journey, often filled with psychological and emotional challenges.
These impacts on your mental health don’t get talked about much, so we’re going to talk about them.
What’s a settlement agreement?
A settlement agreement outlines the terms under which a work dispute between you and your employer is settled. You agree not to pursue any claims in court against your employer for the way they have treated you, in return for a financial payment. You leave your employment.
But beyond a basic definition like this, there’s a whole host of things that affect your emotional and psychological well-being if you’re on the receiving end of a settlement agreement.
Psychological & emotional impacts of a settlement agreement
There are usually two main ways of ending up with a settlement agreement and the impact on you psychologically and emotionally will vary, depending on whether you’re offered a settlement, or take the initiative and ask for one, as outlined below.
Scenario A: You’re offered a settlement agreement
Your company may be downsizing, restructuring, or undergoing a change in ownership or a merger, or they may not want the dispute with you to continue.
So they hand you a settlement agreement without prior warning and ask you to sign it. In such a situation, you may experience any or all of the following:
- Confusion about the reasons for the settlement offer, especially if no clear explanations are provided at the time it’s delivered to you.
- Surprise and shock when you realise that you have to process a sudden shift in your employment status.
- Anxiety and fear about your immediate financial security and long-term career prospects.
- Anger and resentment because you feel unfairly treated, particularly if you don’t think that the settlement adequately reflects your performance or if the situation feels unjust.
- Betrayal – particularly if the settlement comes from an employer you trusted or have had a long-standing relationship with.
- Sadness and grief for losing your job and also for the end of professional relationships and the change in your daily routine and identity.
- Stress because of the need to make significant decisions in a limited time frame, especially if you’re being put under pressure to accept the agreement.
Scenario B: You’ve asked for a settlement agreement
You’ve been treated badly at work and want to leave your job, so you’ve asked for a settlement agreement rather than just resigning with contractual notice and holiday pay. Now you have to negotiate the terms of the agreement.
Negotiating a settlement isn’t just about you or your solicitor haggling with your employer over levels of financial compensation. It’s also about weighing your psychological and emotional well-being against financial practicalities.
You might feel under pressure to settle quickly, or you might want to fight harder for a better deal to justify your feelings of being wronged by your employer.
These negotiations can sometimes feel like a battleground, especially if you undertake them on your own. Here are some common emotional and psychological issues you might experience during the negotiation process:
- Stress and anxiety: The uncertainty and the high stakes involved in negotiating a settlement can lead to significant stress and anxiety. Concerns about your financial security, future employment, and professional reputation can exacerbate these feelings.
- Depression: Prolonged negotiations, especially if they are hostile or if they seem to stall, can lead to feelings of hopelessness and depression.
- Low self-esteem and self-doubt: The circumstances leading to a settlement agreement might cause you to doubt your professional abilities and self-worth, particularly if the settlement relates to performance issues or conflicts.
- Anger and frustration: You may experience anger and frustration during negotiations, particularly if you think the terms offered are unfair or believe you’re being forced into a corner.
- Impact on personal relationships: The emotional toll of negotiating a settlement can also put a strain on your personal relationships.
Getting support
It’s really important not to try to go through the psychological and emotional experiences of dealing with a settlement agreement alone. It’s normal to have strong reactions and emotions at such times. Seek the support you need and take care of your psychological and emotional well-being through every step of the process.
Emotional support from family, friends, or a professional counsellor can make a big difference.
Seeking professional legal advice from a specialist employment law firm like Monaco Solicitors, can also provide you with reassurance and guidance together with a sense of having some control over the process.
You have a legal right to consult an employment lawyer – at your employer’s expense – before signing any settlement agreement you’re offered. The consultation ensures that your employment rights are safeguarded, and that the terms of the settlement are fair and equitable.
What next?
Whether your problem at work relates to a settlement agreement or other employment law issue, get in touch with Monaco Solicitors if you’d like friendly and professional advice from an experienced team of specialist employment law solicitors. We only work with employees, so we understand where you’re coming from!
If you don’t know whether or not you have a legal case that’s worth making a claim for, click the ‘Get Started’ button below to find out.
