Legal Advice Needed- Employment/Contractual Law

[SteelSD]

Ok. Hopefully, I can get the advice of some of our resident attorneys. Here's the scenario...

Prospective Employee A (we'll call her "my wife") accepts a position from Company A, and returns a signed offer letter to said company. The offer letter includes only the following data:

- Position
- Job Description
- Benefits/Vacation/PTO/Sick Leave
- Review frequency
- Starting Salary
- Acknowledgment of accepting position, pay, and future requirement to sign no-compete agreement

I would be happy to send the full offer letter to any of our resident attorneys who want to inspect it.

No start date was included and no term of employment was agreed-upon. Due to obligations to her previous company, Company A knows that my wife could not begin employment until April 1st. During the interview with Company A, the interviewer (Excutive Vice President) also noted that the company and employee had the benefit of a "90-day trial period".

Then Company B (a company with which she had already interviewed) contacted her three days ago with a significantly better offer and more stability/support. She accepted the offer from Company B and sent an email to Company A to inform them that she would not be able to join their company.

The result was an email from the EVP of Company A stating that they would take legal action and seek damages should she not reconsider.

I live in an employment "At-Will" state.

My own position is that the offer letter itself does not override the "employment at-will" status offered to both employers and employees of my state.

Any advice from those who understand employment law better than I would be appreciated.

[cincinnati chili]

Steel, whatever suggestions I give you should be confirmed by an actual attorney (I'm a law student) in the state where you live.

Remind me where you live, Pennsylvania?

First of all, theoretically if this were a valid employment contract, it wouldn't matter that you're in an at-will state. The Boston Red Sox play in an at-will state, but if Big Papi decided to play baseball for the St. Paul Saints, a court would say that he waived his at-will rights by knowingly contracting around them.

A letter of intent is not a contract, but in some states, a signed letter of intent IN CONJUNCTION WITH other factors can convert it into a valid contract. For example, if the missing portions of the deal (e.g. term of employment) was worked out verbally AND the company suffered detrimental reliance that a reasonable employer would have suffered (e.g. buying her a whole bunch of computer equipment, etc.) then under Colorado law, Company A might be entitled to remuneration.

I'm assuming that your wife isn't a world class entertainer or athlete or heart surgeon or something so unique that it's literally impossible to find a replacement for her? In such cases the law might be a little different.

The most important two things she can do now is to not send any inflammatory emails in response. Even though it looks like the law is on your side, she doesn't want to jeopardize her position if things ever get into a he-said/she-said battle, by making herself look like a snarky witch. The second is to get recommendations of a trustworthy attorney who will be competent enough to draft a motion to dismiss (and perhaps motion for attorney's fees, depending on your jurisdiction), in case they actually have the balls to sue you.

[George Foster]

I talked to my dad about this, he said that this is no different than that coach that accepted the job at Arkansas and then quit the next day.

He said anybody can send an e-mail, that does not mean they have a legal leg to stand on. Your wife had a change of heart, period. "at-will" protects both the employee and the employer. I would send and e-mail and say, "I resign." You can quit at any time, just like they can fire you at any time.

[SteelSD]

Originally Posted by cincinnati chili

Steel, whatever suggestions I give you should be confirmed by an actual attorney (I'm a law student) in the state where you live.

Remind me where you live, Pennsylvania?

SD

First of all, theoretically if this were a valid employment contract, it wouldn't matter that you're in an at-will state. The Boston Red Sox play in an at-will state, but if Big Papi decided to play baseball for the St. Paul Saints, a court would say that he waived his at-will rights by knowingly contracting around them.

A letter of intent is not a contract, but in some states, a signed letter of intent IN CONJUNCTION WITH other factors can convert it into a valid contract. For example, if the missing portions of the deal (e.g. term of employment) was worked out verbally AND the company suffered detrimental reliance that a reasonable employer would have suffered (e.g. buying her a whole bunch of computer equipment, etc.) then under Colorado law, Company A might be entitled to remuneration.

Neither employment term nor anything else was worked out via communication, either verbal or written.

I'm assuming that your wife isn't a world class entertainer or athlete or heart surgeon or something so unique that it's literally impossible to find a replacement for her? In such cases the law might be a little different.

Your assumption is accurate.

The most important two things she can do now is to not send any inflammatory emails in response. Even though it looks like the law is on your side, she doesn't want to jeopardize her position if things ever get into a he-said/she-said battle, by making herself look like a snarky witch. The second is to get recommendations of a trustworthy attorney who will be competent enough to draft a motion to dismiss (and perhaps motion for attorney's fees, depending on your jurisdiction), in case they actually have the balls to sue you.

Good advice. In fact, she had an email ready to send a few hours ago and I told her to delete it. Should the company move forward, we'll certainly seek legal council.

I thank you and George Foster (and his father) for your feedback.

[Raisor]

Originally Posted by SteelSD

SD

ok, now I know Steel is actually Krono under a false name. No one actually lives in South Dakota.

All these years, wasted.

[cincinnati chili]

SD is South Dakota. I thought he meant San Diego just now. Shows how far removed South Dakota is from my consciousness.

[RedsBaron]

Steel:
First, I agree with Chili--you and your wife should consult with a lawyer licensed to practice in South Dakota.
Second, I agree with George Foster and his dad. If this was a West Virginia matter, and Company A came to me, wanting to retain me to file suit against your wife, I would respond by saying: "Are you crazy? Not only do you not have a case, file this suit and she may successfully counterclaim against you!" (I would probably be more diplomatic than that, but I sure wouldn't take the case based upon the set of facts you have presented.)
Again, I defer to the advice of a South Dakota lawyer---and this e-mail does not constitute the establishment of an attorney-client relationship---but based upon your representation of the facts, I expect that a SD lawyer will tell Company A to go pound sand.

[SteelSD]

Originally Posted by RedsBaron

Steel:
First, I agree with Chili--you and your wife should consult with a lawyer licensed to practice in South Dakota.

Second, I agree with George Foster and his dad. If this was a West Virginia matter, and Company A came to me, wanting to retain me to file suit against your wife, I would respond by saying: "Are you crazy? Not only do you not have a case, file this suit and she may successfully counterclaim against you!" (I would probably be more diplomatic than that, but I sure wouldn't take the case based upon the set of facts you have presented.)

Again, I defer to the advice of a South Dakota lawyer---and this e-mail does not constitute the establishment of an attorney-client relationship---but based upon your representation of the facts, I expect that a SD lawyer will tell Company A to go pound sand.

Thanks very much for your input, RB. Knowing that our communications here do not establish an attorney-client relationship, and also knowing that your opinion does not represent legal advice relating directly to my wife's situation, what kind of counterclaim might a resident of WV be able to file?

[RedsBaron]

Originally Posted by SteelSD

Thanks very much for your input, RB. Knowing that our communications here do not establish an attorney-client relationship, and also knowing that your opinion does not represent legal advice relating directly to my wife's situation, what kind of counterclaim might a resident of WV be able to file?

WV generally recognizes a claim for tortious interference with the right to employment in certain contexts. For example, if Mary Jones attempts to gain employment with Company B and Company A then attempts to prevent her from taking the job because she allegedly is subject to a covenant not to compete, if a court later determines that the covenant not compete is unenforceable, then Mary Jones may have a claim against Company A for interfering with her ability to accept the job offer from Company B.
My advice to employers in WV is, when in doubt, to err on the side of not attempting to enforce covenants not to compete. We only try to enforce such covenants when we are certain the covenant will be upheld.

[SteelSD]

Originally Posted by RedsBaron

WV generally recognizes a claim for tortious interference with the right to employment in certain contexts. For example, if Mary Jones attempts to gain employment with Company B and Company A then attempts to prevent her from taking the job because she allegedly is subject to a covenant not to compete, if a court later determines that the covenant not compete is unenforceable, then Mary Jones may have a claim against Company A for interfering with her ability to accept the job offer from Company B.

My advice to employers in WV is, when in doubt, to err on the side of not attempting to enforce covenants not to compete. We only try to enforce such covenants when we are certain the covenant will be upheld.

That's interesting, RB. I've heard of cases in which Company A sued Company B for tortious interference when Company B lured a contracted employee away. But I hadn't considered a potential tortious interference counterclaim from an employee if Company A attempts to enforce a non-enforcable non-compete agreement.

The new position she has accepted with Company B is for a different job function (database management versus web development) in a completely different industry (banking versus marketing). Realistically, there's zero chance that any information she may have already been privy to with Company A could be used in any fashion by her or her new company to negatively impact Company A.

In any case, I'm not sure that a covenant not to compete actually exists. My wife has never seen it and, thus, certainly hasn't signed one. However, as the offer letter includes a requirement to sign a non-compete agreement as a condition of employment (the only non-compete language existing in said offer letter), could an Company A successfully argue, in WV of course, that the signing an offer letter requiring a non-compete agreement at a later date represents a coventent not to compete?

I'm probably over-thinking this one as the threat of a lawsuit is likely just a manifestation of frustration from Company A.

[Yachtzee]

Originally Posted by SteelSD

I'm probably over-thinking this one as the threat of a lawsuit is likely just a manifestation of frustration from Company A.

You're probably right. Covenants not to compete and employment contracts lacking a definite term are generally tough to enforce and are usually interpreted narrowly. There is a general public policy against indentured servitude that works against companies trying to force a person to work for them or work nowhere.

[RedsBaron]

Originally Posted by SteelSD

In any case, I'm not sure that a covenant not to compete actually exists. My wife has never seen it and, thus, certainly hasn't signed one. However, as the offer letter includes a requirement to sign a non-compete agreement as a condition of employment (the only non-compete language existing in said offer letter), could an Company A successfully argue, in WV of course, that the signing an offer letter requiring a non-compete agreement at a later date represents a coventent not to compete?

I'm probably over-thinking this one as the threat of a lawsuit is likely just a manifestation of frustration from Company A.

Absent a signed contract with a definite term of employment and absent a signed covenant not to compete, I think that Company A has nothing more than frustration and arrogance. Your wife is probably fortunate not to work for Company A.

[SteelSD]

Originally Posted by Yachtzee

You're probably right. Covenants not to compete and employment contracts lacking a definite term are generally tough to enforce and are usually interpreted narrowly. There is a general public policy against indentured servitude that works against companies trying to force a person to work for them or work nowhere.

That the position I've always understood. In my experience with extending offers, none of the companies I've worked for have ever considered an offer letter to be a binding contract for term employment. In fact, it's always been quite the opposite as we've gone to greath lengths in stipulating that an offer letter is NOT a contract for employment and we've never attempted to sue a prospective employee who signed their offer letter than then went with another opportunity.

It just surprised and alarmed me that a prospective employer attempted to turn an obvious offer letter (titled "Employment Offer") into a binding contract for an open-ended term of employment when most laypeople understand that the simple offer of an annual salary isn't remotely enough to meet the requirement of offer "term". I think your use of the phrase "indentured servitude" is quite applicable here as it appears the employer has the expectation that they could fire the employee at any time, but that the employee can't quit. Convenient, that is.

Heck, as the offer letter specified no term and also did not relate that the employee could be fired for cause, did my wife have the legal expectation of having a job forever regardless of her behavior or performance? Well, that'd be some swell setup!

Originally Posted by RedsBaron

Absent a signed contract with a definite term of employment and absent a signed covenant not to compete, I think that Company A has nothing more than frustration and arrogance. Your wife is probably fortunate not to work for Company A.

Honestly, after she gained some minor exposure to the company when they asked her to do some freelance work for them prior to her start date, my wife feels fortunate to have other options. Until Company B came forward with an offer, she was willing to bite the bullet and use the afore-mentioned "90-day trial" to determine whether or not her concerns were 100% justified, but after the offer came in...well, we all know what's going to happen in that scenario.

Company A's response to her declaration that she wouldn't be joining is pretty much just confirming suspicions she already had.

[cincinnati chili]

Originally Posted by RedsBaron

Your wife is probably fortunate not to work for Company A.

Ain't that the truth. An interesting proposition is the hypothetical situation where Steel's wife had a sort of wilting-flower personality, and out of fear decided to go ahead and work for company A.

Can you imagine a employment relationship getting off on that foot?

"Yeah, I really would prefer not to be working here, but seeing as how you threatened to sue me, how would you like your coffee, sir?"

[SteelSD]

Originally Posted by cincinnati chili

Ain't that the truth. An interesting proposition is the hypothetical situation where Steel's wife had a sort of wilting-flower personality, and out of fear decided to go ahead and work for company A.

Can you imagine a employment relationship getting off on that foot?

"Yeah, I really would prefer not to be working here, but seeing as how you threatened to sue me, how would you like your coffee, sir?"

Yeah. Exactly. And if you knew my wife, you'd know that she isn't a "wilting flower". She's the shears.