Define: Tender Back Rule

The tender-back rule is a legal principle that pertains to agreements made between employers and employees. If an employee agrees to a severance package or other benefits from their employer in exchange for giving up their right to sue the employer, they are required to return those benefits if they later decide to pursue legal action. The purpose of this rule is to prevent employees from accepting benefits and then seeking additional compensation through a lawsuit. It is important to note that there are exceptions to this rule for certain types of claims, such as those involving discrimination.

The tender-back rule is a legal principle that applies to waiver or release agreements in an employment context, requiring an employee to return any consideration received from an employer if they wish to litigate any issue that was supposedly waived. For example, if an employee accepts a severance package with an agreement waiving all future claims against the employer, they must return the severance amount before suing the employer for a waived claim. This rule is commonly used by employers to prevent employees from accepting benefits and then seeking additional compensation through litigation. However, the tender-back rule does not apply to all claims, such as those brought under the Equal Pay Act, Title VII, and Age Discrimination in Employment Act, which do not trigger the rule. In summary, the tender-back rule imposes an obligation on potential plaintiffs to return any consideration received before commencing any claim or counterclaim.

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This glossary post was last updated: 17th April 2024.