Is a signed employment offer letter outlining severance package legally binding?

Get Legal Help Today

 Secured with SHA-256 Encryption

Is a signed employment offer letter outlining severance package legally binding?

Company was sold by owner. My husband was VP. Given 2.5 weeks notice. Has
employment offer letter that states a severance arrangement of 3 months salary.
Owner is not honoring the letter.

Asked on May 1, 2016 under Employment Labor Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

A signed employment offer letter *may* be legally binding. It depends on the exact circumstances and timeline: if the letter was given before your husband made the decision to take the job, it is likely binding, since it became part of the "consideration" (what he was offered) for the job. If he had already decided to take the job, then the offer of severance was offered gratuitiously (for nothing; freely) and would not be binding. This, though, is a general statement: because all agreements are governed by their specific or precise terms, you need to look to exactly what the letter says as well.
However, that is not the end of the analysis. You say the company was sold by the owner; if your husband was not terminated as part of the sale, but had the chance to keep working with the new owner, then he was not terminated--the sale of the company does not, by itself, trigger termination or the severance package. If, however, his employment was in fact involuntarily terminated as part of the transaction, then if the letter did establish an enforceable obligation, he may be entitled to severance.
Even if there is an enforceable severance obligation, there is the question of who has to pay it, which depends on how the company was structured (e.g. was it an LLC or corporation) and how was it sold. 
Since the specific facts are so critical, your husband is advised to bring a copy of the letter to an employment law attorney to review with him at length.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption