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what is a settlement agreement settlement agreements used to be referred to as compromise agreements theyre a special type of agreement through which employees can settle claims they might have against their employer an employee cant sign an agreement contracting out of these rights unless that agreements in a particular form the correct form can be a quart three agreement which is an agreement that is docHubed through a cass alternatively the correct type of document can be a settlement agreement this will be any agreement that is either arrived at through negotiation between lawyers or between the parties themselves there are a number of factors that need to be complied with before a settlement agreement can be effective obviously from an employers point of view its very important that they are effective one of the key requirements will be that the employee is represented by a lawyer who signs off a certificate in the agreement without this certificate the contract wont be valid