Why Not Kill Two Birds With One Stone?

In a recent article, Robert Smithson discusses the recent BC Supreme Court ruling: Emailed job offer is a binding contract after acceptance, and termination clause sent after a worker accepts initial offer requires fresh consideration to be valid.

The original version of this article can be found on Smithson Employment Law Corporation. 

---

I’m a big fan of doing less whenever possible.  In the legal context, that can be a winning strategy in certain situations; one of those is the hiring of employees.

Many employers are in the habit of using a two-step approach to advancing an offer of employment.  They first send the candidate the desired terms of employment and then, when the employee has indicated acceptance of those terms, the employer then sends along an employment agreement for signing.

This is an example not only of wasted effort (why say the same thing twice when once will suffice?) but can actually undermine the enforceability of the employment agreement.  A recent example of this played out in B.C.’s Supreme Court.

Adams v. Thinkific Labs Inc. – Offer of Employment

Madeline Adams was hired by Thinkific Labs Inc. in August of 2021.  On August 19^th, Thinkific emailed Madeline a “detailed and extensive” offer of employment (comprising some 60 pages). 

Thinkific’s emailed offer addressed items such as her compensation, stock options, an HSA account, bonus opportunities, etc.  Notably, it did not address items such as Madeline’s termination notice/severance entitlements.

(Any employment lawyer worth his/her salt will tell you that there is only one critically-important clause in an employment agreement… the termination provision.  It’s rather astounding how often employers neglect to address this pivotal topic.)

Madeline responded the next day, accepting Thinkific’s offer of employment.  Later the same day, Thinkific replied with a “formal, written document” in the form of an employment agreement including “terms regarding termination and non-competition”.  Madeline duly signed and returned that agreement to Thinkific.

Termination of the Relationship

Thinkific terminated Madeline’s employment, without cause, in May of 2023.  Thinkific sought to rely on the employment agreement containing the “terms regarding termination” but Madeline had different ideas on that subject.

She asserted, correctly, that the “initial email offer of August 19, 2021 … constituted a full and binding employment contract”.  Since that contract contained no termination clause, she asserted that she was “entitled to receive reasonable notice, or pay in lieu of reasonable notice, as determined by the common law”.

Thinkific opposed that assertion, arguing that “the initial email offer and subsequent acceptance did not constitute a contract of employment”.  The B.C. Supreme Court determined the following.

[26]      The initial email offer in this case was extensive and detailed. I have already mentioned some, but not all, of the matters which it covered in considerable detail. The picture painted was nothing short of glowing and positive.

…

[28]      By contrast, the written document consisted almost entirely of new restrictive terms regarding termination, intellectual property and non-competition, significantly limiting plaintiff’s right to seek employment in her chosen field in the event of termination. Those restrictive terms were added by the defendant without consultation and without the offer or provision of further consideration.

[29]      Put quite simply, the overall tone and impression of the second document seems to be one of “we told you about all of the good stuff, but now that you are on board, here are some additional terms that we are imposing on you”.

…

[33]      The [written document] 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. …

[35]      … I find that the initial offer and acceptance was a complete agreement between the parties and that the defendant has failed to establish, on a balance of probabilities, that the plaintiff received any or any adequate consideration for the signing of the [written document] — that written document is unenforceable and the plaintiff’s entitlement to severance is to be determined by common law principles.

In the end, the Court awarded Madeline 5 months’ salary pursuant to the common law principle of “reasonable working notice”.

What Are We To Take From This Decision?

Adams v. Thinkific Labs Inc. reinforces a bit of advice I’ve been giving to employers for a long, long time, which is “kill two birds with one stone”.  Instead of communicating the proposed terms of employment, obtaining the candidate’s acceptance of those terms, and then following up with a formal agreement for signature, do it all in one step.

Just send (email is fine) the candidate the proposed employment agreement, containing all the desired terms of employment, and ask the candidate to return the signed agreement in acceptance of the offer.  That’s it.  (And, be sure to obtain the signed employment agreement before the candidate walks into the workplace on his/her first day of work.)

Less is often more.  It really is.