Employer Trying to Change the Terms of a Termination Agreement

[n.scott]

My question involves employment and labor law for the state of: Wisconsin

The employer decided to " eliminate a salaried position". Employee was not terminated for cause. The employer told the employee that effective x/x/xxxx
the employee would be working for a differnt company, in a non-salaried, commission only position. Employer gave employee a letter stating that salary and health insurance benefits would continue for X months. After 1 month, the employer has not issued a paycheck and is trying to change the terms specified in the letter signed by the President of the company.

If the employee was promised ( in writing) salary and health insurance for a specified period of time, can the employer refuse to honor that commitment? What should the former-employee do next?

[jk]

You will have to determine if this letter is a contract or simply a letter of notification. If a contract, if you cannot negotiate an acceptable solution, your only avenue would be to sue for your losses.


If it was simply a letter of notification, then as such, the employer would have the right and ability to alter the terms at their discretion.

It sounds like it was simply a notification. As such, there is no contractual requirement for the former employer to act as promised. If you incurred damages due to some action you took based on their promise, you might have a claim for those damages. If there were no damages due to them changing the terms of the letter, then you would have no claim.


In other words: just because the said they were going to give you something does not mean they have to follow through with that promise. It was a gratuitous act, not mandatory. As such, they can revoke their offer of gratuity unless you took some action based on their gift that caused you damages.

[n.scott]

I'm confused. The employer set up the 'terms' of the termination and set those terms in writing. If a letter, written and signed by the President of the company is not a binding document, what is? Employees ( at will) never get to negotiate during a termination. This employee has followed/ complied with all the terms of the termination letter.

The employer now wants to change the terms of the termination. It is clear that the employer does not want to honor their commitment and knowing the poor financial condition of the company, it is likely they will be bankrupt within the next 3 months.

The issue of suing for losses....the losses are mortgage payments, health insurance, food, shelter and clothing. How does a person 'show losses', as you indicate?

I'm most confused by the use of contractual references in your response. I have never had a contract with my employers in the 40 years I have been working.

Please clarify. Thanks

[jk]

You never said there were any terms you were required to follow. What you stated was you were being terminated and the said they would continue to provide insurance and salary for some period of time. Now you are claiming there was something else.

I don't read minds.

So, what were the obligation imposed upon you to receive the extended benefits?

Employees ( at will) never get to negotiate during a termination.

Not true. Separation agreements are often negotiated with at will employees. The employee does not have any real negotiating power but yet, there are often negotiations in such an agreement (contract). They often include items such as a non-disclosure agreement (which, without the employees agreement would not otherwise be enforceable) in exchange for some specific remuneration.

The issue of suing for losses....the losses are mortgage payments, health insurance, food, shelter and clothing. How does a person 'show losses', as you indicate?

those are not losses caused by their rescission or alteration of their letter. Those obligations were there before you were terminated.

Damages would be something where you made a decision based on their statement of continuing the benefits they listed and due to them changing the terms, you were subject to some form of loss.

I'm most confused by the use of contractual references in your response. I have never had a contract with my employers in the 40 years I have been working.

If the continuation of the benefits were not part of a contract, then you cannot force them to continue their payments. It was nothing more than a gratuitous extension of the benefits which they had no obligation to provide and unless it was part of a contract, they have no duty to continue the benefits. It was simply a gesture of goodwill. Such gestures are not binding.