Legal Question in Employment Law in Maryland

Re: New job signing bonus rescinded

From what you descibe, it appears that you have a valid and enforceable contract. But, as you state, the $5,000 signing bonus was conditioned upon one year of service. You do not mention if there is a clause that excuses you from one year of performance where such non-performance is through no fault of your own.

Generally, detrimental reliance is one way to enforce an offer. The reliance damages must have been reasonably foreseeable by the party making the offer. This would require more facts to address.

Please be aware of the distinction between damages on an offer and damages on a contract. Damages on a contract may be offset or nullified by the contractual requirement of one year of performance. These types of clauses are enforceable by an employer where properly drafted.

Mistake may be something that would alleviate the employer from responsibility. However, it appears that there was negotiation, then affirmance in an offer letter, and re-affirmance in a written contract. Given all this the employer may be precluded from asserting mistake to avoid paying the bonus.

Now, to practical matters. You now have a job. I know nothing of your financial matters. Essentially, the job may be more valuable than the bonus. However, you should not roll over on the bonus. Tell the employer that you have contracted to be employed, that you want the contract, that you dealt with them equitably and fairly and that when you signed the contract the $5,000 signing bonus was part of the basis upon which you committed to the contract. You may want to consider negotiation on the matter. If the employer does not want to give an inch then this may be a sign of trouble to come and you may want to consider this when obligating yourself to work for a year. Keep in mind that the job market is tough and you now have a contract that commits you for a year. Even if you choose to overlook the bonus, the employer could seek damages if you do not perform for a year. The job market could improve considerably in a year's time.

You may benefit from hiring an attorney to seek to clarify the matter and assert your position in a non-argumentative manner. I am available for a reasonable fee if you should choose this option.

G. Joseph Holthaus III

(410) 799-9002

(410) 619-5918 (voicemail)

Re: New job signing bonus rescinded

First, congratulations on the new job.

Second, any action that you take regarding the bonus dispute should be weighed against the value of the job professionally and financially over the coming years. In other words, legality aside, it may not be worth possibly souring the relationship over $5000 so early in the game.

However, it certainly sounds like you have a valid contract. An offer was made, including the bonus which had been discussed earlier and then included in the letter (so if it actually was a mistake, it was not just a clerical error), and you accepted it. That's a binding contract. You also spent money in reliance on the job and bonus, which means you have a claim for detrimental reliance - you relied on the promise of the bonus to your detriment.

Although contracts can be voided or amended based on mistakes, this does not appear to be one of those situations since, as I said above, it was not just a clerical or numerical error. There was negotiation and time that elapsed prior to the deal being signed.

The employer might claim that they did not sign the agreement (you do not say if they did, or if there is even a place for their signature on the letter), but that likely would not be insurmountable even if true.

There are three basic ways to go here. You can tell the employer you are willing to forget it in the spirit of the new relationship. (You might add that you expect them to remember your generosity and repay it at the appropriate time later.)

You can offer to bargain. Let them know you have a valid legal claim to the money and spent money in reliance on it, but are willing to compromise. Perhaps ask for 50%, or reimbursement of your actual costs, or whatever else you think is reasonable. (You could even ask for the full amount, but offer to take it in small sums spread out over time.)

Or you could take the legal route. Have an attorney make a call, draft a letter, etc., to try to get the payment quickly without fuss. If you do this, be sure not to spend the $5000 on legal fees. I am available at 301.604.7917 or [email protected] if you are interested in legal help. We can likely work out an inexpensive flat fee so you don't waste the bonus on legal fees.

Good luck.

Jeff Sheldon

Jeffrey L. Sheldon, Esquire

The Sheldon Law Firm

6932 Mayfair Road

Laurel, MD 20707

301.604.2497

fax: 301.776.3954

[email protected]

http://www.SheldonLawFirm.com

Disclaimer: This posting does not and is not intended to constitute legal advice. It is not confidential, nor is it privileged, and it does not create an attorney-client relationship. Please consult with an attorney for advice specific to the facts of your case.