In New York employment is considered “at will” unless the parties have a written employment agreement. This means, for example, that an employer does not have to give you any severance pay upon termination unless you have a contract in place that provides otherwise. Ideally, a severance agreement is in writing and signed by both the employer and employee. But just because there is no formal written agreement does not necessarily mean there is no enforceable contract. Under New York law, a “signed writing” is just one means of proving the existence of an employment contract.
NYC Company Ordered to Pay Severance to Former Executive
Consider this recent case from Manhattan. The plaintiff worked as a senior executive for the defendant. Prior to beginning work, the plaintiff and the defendant's CEO exchanged a series of emails to discuss employment terms. These emails covered all of the essential elements of an employment agreement, including salary and the plaintiff's start date.
The plaintiff said she wanted to have a severance package “in writing and agreed upon” before agreeing to the final contract. She initially proposed 12 months of severance pay if her employment was terminated within the first 18 months. The CEO replied with a counter-offer of six months, together with a demand for a non-compete provision. The plaintiff proposed splitting the difference–nine months of severance pay with the non-compete clause.
Although no formal agreement was ever signed, the plaintiff began working for the defendant. In a final email, the plaintiff said she “understood the severance provision” to be nine months. The CEO sent a separate email to the company's chief financial officer indicating he agreed to those terms.
The defendant terminated the plaintiff's employment after 19 months. She subsequently filed a lawsuit alleging sex discrimination and breach of contract. The latter specifically referred to the defendant's refusal to pay the plaintiff the nine months of severance pay. The defendant argued that there was never a valid severance agreement in place since there was no written, signed contract.
A federal judge disagreed. In a December 1 order, the judge granted the plaintiff's motion for summary judgment on her breach of contract claim. (The sex discrimination claims remain pending.) The judge found that the “series of emails” between the plaintiff and the CEO was enough to create a “binding contract” as it demonstrates a “meeting of the minds” on all essential terms. The judge pointed to the CEO's email to his financial officer indicating the negotiations were “done,” as well as the fact the plaintiff “partially performed” her end of the bargain by working for the defendant for 19 months.
Need Help With a New York Employment Law Matter?
Despite the favorable outcome in this case for the plaintiff, it is still always best practice to have a written, signed employment agreement in place before beginning work at a high-profile job. An experienced New York employment law attorney can assist you with negotiating a contract and making sure everything is in order. Contact the Law Offices of Mahir S. Nisar at (800) 496-3076 if you would like to schedule a consultation with an attorney today.