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The Dangers of Two Step Offers

July 8, 2024

In my practice I am often faced with employers who have implemented a practice of putting offers to prospective employees in a letter, and then presenting that employee with an employment agreement for their signature once they have accepted the offer. This is a practice that I always discourage as it has the potential to create problems in terms of enforceability. A recent British Columbia Supreme Court Case, Adams v. Thinkific Labs Inc demonstrates the pitfalls of such an approach.

The employer in Thinkific had sent Ms. Adams an email offer of employment. The offer included details regarding compensation, stock options, benefits, parental leave program, vacation entitlements and work schedule. The emailed offer also included extensive brochure materials regarding various benefit plans that she would be entitled to. What the email offer did not include was any terms regarding termination or non-competition. After Ms. Adams responded to the email offer with an acceptance, Thinkific sent her a formal, written employment agreement for her signature. That document included termination provisions and a non-competition agreement. Ms. Adams signed the written agreement and returned it to Thinkific. She began working for Thinkific on September 20, 2021, and was terminated on May 23, 2023.  In the termination, Thinkific relied on the termination provisions of the written agreement. Ms. Adams took issue with that, taking the position that the initial email offer, which she accepted, constituted a full and binding employment contract, a contract that contained no termination clause and accordingly that she was entitled to common law notice of the termination of her employment. 

The trial judge agreed with Ms. Adams, noting that the overall tone and impression of the second document seems to be one of “we told you about all of the good stuff, but not that you are on board, here are some additional terms we are imposing on you.” The trial judge concluded that in the initial email offer of employment, terms of employment were offered and accepted. Hours later, new terms were presented, or imposed. The only consideration was that the plaintiff could keep the job if she now agreed to the additional, onerous ad detrimental terms which had not been included in, or even contemplated by, the original agreement. The trial judge found as follows:

[33] The Letter or Letter Agreement clearly imposed new and burdensome terms on the plaintiff, different in all aspects from the terms which had been presented and offered to induce her to accept employment from the defendant. Nothing of the sort had been included in, or even hinted at in the initial offer. The initial terms were not general discussion points in a meeting or interview; they consisted of over 60 pages of all-encompassing, detailed and clear inducements, amassed, collated and presented by the defendant to the plaintiff in their offer to her to join the defendant company.
[34] I also note that the Letter or Letter Agreement refers to almost none of the benefits to the plaintiff which were included in the original offer. It does mention salary and stock options but says nothing about vacation policy, benefits packages, hardware issues, and various other matters which were clearly included in the original offer and were intended to induce the plaintiff to accept the offer of employment. It seems at least arguable that if the defendant’s position is correct, it was not bound to provide an such benefits of the plaintiff as she became bound by the strict, very narrow and almost entirely employer protective terms of the Letter Agreement.

This decision serves as a warning to employers. Offers of employment should be made formally with a written employment agreement containing all the terms or conditions of employment. Employers should have employees sign a comprehensive employment agreement from the outset, rather than taking the two-step approach of offering the employment prior to presenting the contract. Failure to do so could result in the protections written into the agreement being stripped away.

With over 25 years of experience, Rose’s guiding principle is finding the right legal solution for her clients and in doing so nothing is more important than being respectful, compassionate, and responsive. Read more about Rose’s experience and her specific workplace law expertise here.

Expertise

Important Notice: The information contained in this Article is intended for general information purposes only and does not create a lawyer-client relationship. It is not intended as legal advice from Harper Grey LLP or the individual author(s), nor intended as a substitute for legal advice on any specific subject matter. Detailed legal counsel should be sought prior to undertaking any legal matter. The information contained in this Article is current to the last update and may change. Last Update: July 8, 2024.

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