Can my employer claw back the money if I breach the agreement?

As at November 2025 – UK only. General information, not legal advice.

Many settlement agreements contain ‘clawback’ or repayment clauses. These can allow your employer to reclaim some or all of the settlement money if you seriously breach key terms, such as confidentiality. Whether they can actually claw it back depends on the precise wording and how serious the breach is.

What this means for you 

By signing a settlement agreement, you are entering into a binding contract. If you break that contract, your employer may have a legal claim against you. In practice, employers usually reserve clawback for clear, serious breaches rather than minor slip-ups.

How clawback clauses usually work 

Typical clauses say that if you commit a material breach of the agreement, the employer can seek repayment of some or all of the compensation and/or pursue damages. ‘Material breach’ usually means something significant, not a technical mistake.

Some agreements specify that only part of the payment (for example, an ex‑gratia element) is at risk, while contractual sums such as notice pay and holiday pay remain yours.

Common triggers for clawback 

Common examples in settlement agreements include:

• Serious breach of confidentiality obligations. 
• Making clearly defamatory or disparaging public statements about the employer. 
• Breaching post-termination restrictions that were central to the bargain.

In each case, the employer would still have to prove the breach and the loss they say it has caused.

Are clawback clauses always enforceable? 

Clawback provisions must be reasonable. A clause that tries to reclaim everything for a minor breach could be challenged as a penalty. Courts and tribunals look at whether the clause is proportionate and linked to real loss, not simply there to punish you.

Example scenario 

Your settlement agreement says the ex‑gratia payment is repayable if you disclose confidential terms on social media. You later post detailed figures on a public platform. Your employer could rely on the clawback clause and seek repayment, arguing a serious breach of confidentiality.

What to do next 

Ask your adviser to explain any clawback wording before you sign. If it feels too broad or harsh, you can ask for it to be narrowed, capped, or limited to truly serious breaches. Once the agreement is in place, follow its terms carefully and get advice before saying or posting anything you are unsure about.

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At Springhouse Solicitors we offer a range of services, so please contact our friendly customer services team to discuss further via  hello@kilgannonlaw.co.uk or  0800 915 7777.

Disclaimer 

The above provides a general overview of areas in employment law and is not intended nor construed as providing specific legal advice.  This article is for information purposes only and is correct at the time of publication. It does not constitute legal advice.

12.11.25