Can an Employer break agreements?

[Concerned Sher]

A major large company has bought out the company that I am working for. In the agreement my position will be terminating approximately 18 months from date of agreement, March 20,2000. I had 3 business days of date on agreement to respond to agree with the terms. In the terms, which I have written documentation stated from HR from the large company that I would receive my severance payment total of 12 weeks at any time even if I resign. I signed this agreement within the 3 business days agreeing to this. Due to the increase termination of employees the large company decided that they had made a mistake and is now not honoring the severance agreed upon. Six days after the first initially signed agreements were made the company came back and said they had misinterpreted the severance policy, which now is stated if you terminate your position with the company you will not receive your severance. Those individuals with the same agreement as me turned in their resignation within the 6 days of getting the revised agreement and did receive their severance. I feel that the company is breaking the signed agreement I agree upon. I do have signed documentation to prove all of this. Do you think I a valid case to pursue or not?

 

[lawrat]

I am a law school graduate currently awaiting Bar results. What I offer is mere information, not to be construed as forming an attorney-client relationship.

Okay, this is a classic case of contracts law, breach and unilateral mistake (all legal terms which I will explain below).

The company made an offer for the severance pay issue based on their understanding of company policies and procedures. Your acceptance of this offer was to occur within 3 days. You have the written documentation, it was obviously signed. If it was signed by them at any time (their offer on their paper created by them and your signature should also be enough, too, then your acceptance of their offer is enough! They are bound.

Now, let us get to the breach and unilateral mistake issues:

1. BREACH: By not honoring such binding contract, they are in breach and owe damages. Your damages will go from the amount they were to pay to anywhere including consequential damages you are out, like interest on top of it.

2. UNILATERAL MISTAKE: Now, let us say you think your car is worth $500 but it is actually $1000. You make a contract with mr. y to sell it to him for $500. After you make the contract but before he pays you, you find out it is worth $1000. You cannot go back and say the contract is void! (this is what the employer is trying to do to you). The only way you could void the car deal (and the company could void the severance agreement) is if mr. y (or you as employee in the company case) knew the mistake made (i.e. knew the car was worth $1000 or the severance agreement was wrong).

Thus, because you did not know about their mistake, you are still entitled to the money and they cannot void the contract.


Hope this helps and good luck to you in your endeavors.