Terminating the Employment Relationship

7. U NEMPLOYMENT B ENEFITS It has become increasingly common for employees who are agreeing to a separation of employment to insist on an employer not contesting his/her application for unemployment benefits. The following is a sample unemployment benefits clause:

The City agrees not to contest any application for unemployment benefits submitted by Jones after the date this Agreement is executed. This provision shall not prevent the City from complying with requests for information from the Employment Development Department (“EDD”), or from participating in any proceeding or hearing with EDD if required to do so by the EDD.

An employee may be reluctant to execute a separation agreement out of fear that his/her voluntary agreement to end the employment relationship will preclude him/her from obtaining unemployment benefits. However, an employee who agrees to separate his or her employment as part of a settlement agreement is not disqualified from obtaining unemployment benefits. 333 By including an unemployment benefits provision in an agreement, an employer might be able to lessen the employee’s fear and reach an agreement. D. S EALING P ERSONNEL D OCUMENTS Another common issue when agreeing upon material terms in a separation agreement or an agreement resolving a lawsuit is how the employer will maintain and disclose an employee’s personnel file, or certain documents within the personnel file. For instance, in separation agreements that allow an employee to resign in lieu of termination, the employee often requests that the employer “seal” the portion of his/her personnel file pertaining to the termination. Sealing a personnel file or personnel documents is another way of saying that the file or documents will be kept confidential and separate from the remainder of the personnel file. The “seal” cannot be broken, except upon occurrence of any event or circumstance specified in the settlement agreement. Sealing personnel documents is legally permissible. Depending on what the documents are and the employee’s job (i.e., custodian vs. peace officer), there are, however, various limits on when an employer can refuse to break the seal and disclose the documents. An employer must use extreme caution in agreeing to seal documents so that it does not put itself in the precarious position of having to choose between violating the law and breaching a contract. Before addressing what language an employer should include in a settlement agreement containing a provision that provides for sealing personnel documents, it is important to understand which documents are required to be disclosed by law.

Terminating the Employment Relationship ©2019 (s) Liebert Cassidy Whitmore 110