Is an offer letter a legally binding employment contract?
One employee thought his offer letter guaranteed him five years of employment with his company, but the 2nd Circuit ruled that wasn’t the case. Here’s what happened.
Breach of contract?
Steven Hodge was hired at Abaco LLC in New York. His signed offer letter discussed how the employer “anticipated” Hodge’s employment with the company would be for a “minimum of five years.”
The letter did include a disclaimer that the company had the right to terminate Hodge for just cause at any point. He was with the company for just under a year when he was let go.
Hodge sued the company, claiming a breach of contract. He claimed the signed offer letter acted as an employment contract, and he should’ve been guaranteed five years with the company.
But the 2nd Circuit ruled against Hodge, finding no breach of contract. The court said the company’s “anticipation” of five years of employment wasn’t a promise or guarantee.
Furthermore, in New York, employers have the right to terminate workers at will – which the company mentioned in Hodge’s offer letter.
This case is a good reminder for employers to carefully craft offer letters and to not make any “guarantees.”
Cite: Hodge v. Abaco LLC, 10/9/20.