On what grounds can a pending severance offer be rescinded?

I was handed a signed separation agreement stating that I had 21 days to read, consider and return it. On day 16, the CEO sent an email rescinding the agreement, stating an unexpected and negative financial report on the company from their outside CFO would require laying off several other people. And that they could no longer afford to honor my original agreement.

Prior to receiving the rescinding email, I had some insurance questions about my original agreement. At one point, the VP sent an email saying 'prior to signing the agreement, please call me next Wednesday to discuss'. The Wednesday he referred to was 5 days later, and 2 days AFTER my original offer was rescinded. I believe this may have been done to stall until they could rescind my offer.

The rescinding email had no text, just 2 attachments. I viewed the email, but I opened neither attachment, as I knew it was different offer. The email was traced and they claim to know I read the second agreement. I know it is possible to verify that an email was viewed.

I signed and FedEx'd the original agreement that same day, but it was 'stamped' and hour after I viewed the CEO's email. Can I press them to honor the original agreement, and does simply viewing an email actually give them the right to subvert their first offer?

1 answer  |  asked Feb 5, 2010 7:46 PM [EST]  |  applies to Texas

Answers (1)

Thad Harkins
Texas contract law, and the law governing severance agreements for persons over 40 (which I presume is the case, since they gave 21 days to review, required by the Older Workers Benefit Protection Act) may both come into play. Generally once the offer is made, if accepted it becomes binding, under the federal statute. However, under state contract law, it can be rescinded for a number of reasons, two of which might apply in this case, off the top of my head - impossibility of performance, and omission of a material fact in the contract formation. I think if they rescinded before your signature was received, you may have a tough time, especially if they amended the contract to include new terms. I suggest you seek a consultation with one of the great lawyers in the DFW area listed on MEL links above ("LAWYERS"), or go to www.nela.org or www.telaonline.com and use their directories to find an experience employment lawyer.

posted by Thad Harkins  |  Feb 5, 2010 8:11 PM [EST]

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