What to fo if y friend was recently hired by a large company and on his offer letter, the company mistakenly put 54k per year rather then 30k per year?

A month (and 2 paychecks later), they realized their mistake and notified him. Does he have any recourse to avoid taking a major pay cut?

Asked on December 21, 2012 under Employment Labor Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

He would only have recourse if--

1) There is an actual written employment contract, not merely an offer letter; an offer letter, by itself, is not enforceable. To form a contract, it must limit the grounds under which he could be terminated in a meaningful way, such as by guarantying his employment for a set time (e.g. a year) or restricting the reasons for which he could be fired. If there are no restrictions on termination, he could be terminated at any time--which means that alternately, anything short of termination, like changing his pay, could be done at any time.

2) Alteranately, if ALL of the following criteria are met, the promise contained in the offer letter may be enforceable despite the lack of written contract:

a) The offer of $54k was made prior to his accepting the job, and

b) Formed a material (important) reason why took the job, and

c) The promise was reasonable--that is, based on his experience, credentials, industry, etc., it was reasonable to think he might get $54k, and

d) To take the he had to do something significant to his detriment, like give up an existing job (which paid more than $30k) or relocate, and

e) At the time the company made the $54k offer, it knew he would have to do that thing to his detriment--and made the offer nonetheless.

If all of these criteria were met, the promise may be enforceable under the theory of "promissory estoppel," sometimes called "detrimental reliance."


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