Breach of Contract & Discrimination

HRKY · February 2003

The President of my company recently terminated a British employee who had only been with the company eight weeks - the President didn't feel he was a good fit. The ee has filed a lawsuit claiming breach of contract and discrimination. Here's the facts:-

1. He claims that he has an implied contract, based upon an email the President sent him offering him the job. Though the e mail doesn't specify a specific term of employment, it does state an annual salary which the ee is saying implies a one year contract.

2. I got him to sign an at-will disclaimer when he arrived. The disclaimer states that all employees are at-will although it has a clause stating that only the president of the company can make exceptions (and that they have to be in writing). The ee is claiming that this "exception" clause and the e-mail he has from the President shows that he was not at-will (even though his e-mail does not specifically make reference to at-will or 'not at-will').

3. The other complication is that he was not officially put on the payroll/provided benefits until 4 weeks into his stay (as it took four weeks for him to get legal work authorization from the INS). The I-9 was completed after 4 weeks also.

4. As for the discrimination, he claims a Director of the company made a discriminatory remark about him shortly before he was terminated. I don't think he has written proof of this but that Director certainly was fairly hostile to him and their tense relationship was the main reason the President used in deciding the ee wasn't a good fit.

5. As he wasn't with the company very long, he didn't receive any performance reviews. Nor were any of the relationship problems documented at the time. I don't even think the President warned him about his behavior. Apart from the tense relationship between him and the Director (who was not his supervisor - the ee reported directly to the President) I think he was good at his job. No-one in HR was consulted before the termination took place!

6. The ee relocated from another state to take the job, though he was not working at the time.

7. Our President offered him a fairly generous severance but did not ask him to sign a release. We paid him for one extra pay period but then stopped severance payments when a lawsuit was threatened.

My boss has asked me for my opinion before he talks to an attorney. Anyone got any thoughts?

Gillian · February 2003

In general, I think that the employees case is pretty weak, however, there are a couple of problem points. The first is if this individual spent a lot of money to get from his former location to yours, along with uprooting of family and all the other stuff that goes into a long distance move then some courts are sympathetic to "enticement to the job", followed by a dismissal. Since the employee was not working at the time, that reduces the liability. The second problem is the severance. If there was a signed agreement to pay severance you may have violated the agreement when you stopped payment.

Don D · February 2003

Good riddance to the Brit. They can be rather uppity ya' know (sniff). I think he is bluffing about a lawsuit (unless you have received notice of one). I doubt a Kentucky court would rule in his favor on the one year implication from the quoted annual salary. However, let that be a lesson to us. For years we have been admonished to not state an annual salary for exactly this reason. In offer letters, I state only a biweekly salary, which corresponds to our pay period; then I go on to state, "Which, if annualized would be.......$. Sounds as if you do, though, need to tighten up a few things for the boss, like: Specifically stating in the offer letter that there is no implied or stated contract unless a written one is entered into later. And, you need to be stating the at-will status of your state in the offer letter as well. Also, your letter should clearly outline benefits, especially insurance, and the precise time at which they will become effective. But, I can't see delaying the family's insurance based on the length of time it took him to prove his I-9 information. And, finally, I agree with Gillian about the severance. His threat of a lawsuit should not get in the way of an 'agreed upon severance arrangement'. You are certainly vulnerable there, I would think, if you agreed upon severence, then cut it off. You certainly should have had a severance release and agreement in place. Your boss should surely be told nothing on this forum should replace advice of counsel if he is facing a lawsuit.

Gillian · February 2003

Careful - Gillian was born in England.

HRKY · February 2003

And I'm also a Brit!!(our company employs a lot of us).

I'm grateful for Don's advice but can't endorse his sweeping generalization about Brits - isn't that just the kind of prejudice and stereotyping we all need to help stamp out in the workplace? Or maybe I'm just being uppity?

Don D · February 2003

You'd have to know me KYHR. If you'd been here awhile longer (on The Forum) you'd know I was poking at Gillian when I said that, since he revealed that skeleton in his closet awhile back. The last thing ya' wanta be on the Forum is sensitive. I love Brits. Some of the finest Americans were once Brits. x:-)

Gillian · February 2003

I wonder if there is an emoticon for accents. Wouldn't make much difference for me. I have been here so long that it is rare when someone picks up on the remnants of an accent.

Don D · February 2003

We should ask Christy. There jolly well may be.

Breach of Contract & Discrimination

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