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If an employer makes a ?without prejudice? settlement offer to an employee, evidence about the offer cannot be used against the employer or the employee in legal proceedings if settlement is not reached. However, an offer will only be treated as ?without prejudice? if, at the time the offer is made, there is a dispute.
It is established in California that a voluntary dismissal without prejudice is not a judgment on the merits, and, as such, has no claim-preclusive effect upon a later suit.
What does Without Prejudice mean? If you write to somebody with whom you are in dispute and you label your communication ?without prejudice? this generally means that this letter will not have to be produced to a court if your dispute ends up in a Trial and the Judge will never know that it has been written.
For someone charged with a crime, a case dismissed with prejudice is the best news. It means the judge has made a final ruling, the case is dismissed, the prosecution can't reopen it, and the defendant (the person charged with the crime) is free to go.
Note that there are exceptions to this rule: dismissals for lack of jurisdiction, improper venue, or failure to join a party under FRCP 19 do not count as adjudications on the merits, and thus are considered dismissals without prejudice.
Misrepresentation, fraud, or undue influence This exception can apply in an employment context if either party has induced the other to enter into a contract (which again would include any compromise agreement) by an untrue statement of fact.
Reasons for dismissal without prejudice The parties came to an agreement and the plaintiff wants to end the case. The person the plaintiff sued paid you the money he or she owed you. The plaintiff cannot locate the defendant to serve him or her, but wants to reserve the right to sue at a later date.
For example, an employer might admit in a without prejudice communication that it had failed to carry out certain procedures which might otherwise render a dismissal unfair, but the employee would normally not be able to show that admission to an Employment Tribunal to try and prove their claim.