Which Contract Controls?

I was a highly valued employee for a large media company for 12 years. During that time, it had three different owners. For ten of those years, I had a contract that clearly stated that if I were terminated without cause, I would recieve 6 months severance. Two years ago when my contract was up for renewal,
the new company stalled my new contract.
I was told that everything was fine, and that the lawyers were just slow in getting the papers to us. I went to the VP of the company numerous times to inquire about the contract. More stalling, and more verbal assurances. Finally, after almost a year, I was presented with a completely different contract that stated that in the event of termination without cause, I would be entitled to only 3 months severance, or the amount of time left on the contract, at their discretion. I red-lined it and sent it back to their lawyers. They responded by stalling again for another 7 months. After I wrote an e mail to my supervisor, I was presented with yet a different contract that again contained the 3-month severance clause. I once again did not sign it. While we were still in negotiation, there was a mass layoff, and I was terminated without cause. My questions:
Since they were continuing to pay me under the terms of the old contract while we were negotiating the new one, are the terms of the original contract (regarding severance) still in force?
I recieved a severance agreement letter upon termination, to which I responded within the 19-day time limit imposed by them, but I did not sign it. They are now not responding in any way to my inquiries. I have recieved no money at all since the day I was let go. What are my legal rights?

1 answer  |  asked Jan 26, 2005 02:08 AM [EST]  |  applies to Maryland

Answers (1)

Gwenlynn D'Souza
Contract Formation, Assumption, Ratification.

Arguably, there was no meeting of the minds about the contract under negotiation so there was no new contract formed.

You can claim two points as to the existing contract. One is that it was assumed. You, or your attorney, would have to review two documents to prove that point. You can look to the last signed employment contract for a provision that provides language similar to: "The Company's rights and obligations under this agreement will inure to the benefit and be binding upon the Company's successors and assignees." You can look to the merger agreement of the company, which usually provides for assumption of contracts.

You can also claim that the contract was ratified by the company because the company have knowledge of the facts of your employment, accepted and retained the benefits of the contract, and acquiesced in it.

You can seek treble damages and attorney fees in an action under the Maryland Wage Payment and Collection Act for severance pay in a situation such as yours. If you are looking for a Rockville area lawyer, you can call the Lawyer Referral Service at (301) 424-3454 and request to meet with an attorney for a $40.00 initial consultation.

posted by Gwenlynn D'Souza  |  Jan 26, 2005 03:17 AM [EST]

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