breach of contract in the midst of a buyout

My husband was just involved in a buyout at a local University. He was a contract employee (3 yrs. - only 8 months of which has been worked). He was terminated based on "restructuring" verbally stated in the meeting was that it was nothing "personal or performance related" He was offered 1 month severence and benefits. He refused to sign any of the separation agreements and called a lawyer. The lawyer sent demand for payment of the remainder of the contract and got a 3 part response. #1 The company was not responsible for his contract as it was a part of the old ownership.
#2 They stated that my husband lied to the new administration (they were not specific about what the lie was - we cannot even imagine what they are making reference to! #3 They cited "Gross Incompetency in his work performance".

His separation sheet shows only "Restructure" as the reason for termination and my husband's personnel file is impeccable - no reprimands, verbal or otherwise for lying or work performance issues.

Do we have reason to believe that moving forward with litigation is worth our time?

Please advise! Thanks so much!

1 answer  |  asked Apr 1, 2004 12:01 AM [EST]  |  applies to Arizona

Answers (1)

Francis Fanning
Answers lie in the terms of the contract

In order to evaluate your case, an attorney will first need to review the terms of the employment contract carefully. Whatever rights your husband has come from the promises made in the contract itself. Assuming that the premature termination was a breach of the contract terms, you should be able to pursue a claim. Unless the university simply sold its assets to the new owners and dissolved the entity that previously existed, it remains the same employer despite a change in ownership, and its contractual obligations still exist.
It appears that it would be worthwhile to pursue a claim against the university. But you need to understand the nature of the claim as well. Claims for breach of contract are limited to recovery of what was promised in the contract and possibly attorney fees. No consequential damages such as emotional distress and reputational injury are allowed in most breach of contract claims. Also, mitigation of damages may well reduce the claim. Your husband must make a good faith effort to find other employment, and whatever earnings he is able to make during the remainder of the contract period will reduce the amount of his recovery. Is the chance of recovering a little over two years' earnings minus what he is able to make in those same two years worth the risk and expense of a lawsuit? It's probably worth pursuing a bit further. Perhaps another letter from your lawyer to the employer might flesh out the "lie" your husband supposedly told or the "gross incompetency" he is supposedly guilty of.

posted by Francis Fanning  |  Apr 1, 2004 10:55 AM [EST]

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