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New York Appellate Court Holds that Employer’s Failure to Sign Severance Agreement Does not Render it Unenforceable

In a decision issued on June 25, 2019, New York’s Appellate Division for the First Department allowed an employee to proceed with his lawsuit to enforce the severance provisions of an employment agreement, even though his former employer never counter-signed the agreement. The decision was issued in the matter Michael Lord v. Marilyn Model Management, Inc. According to the decision, the plaintiff was induced to leave his prior job by defendants’ offer of employment. Before plaintiff began working, the parties negotiated an employment agreement that provided for six months’ severance in the event that plaintiff was terminated without cause. Although the employer never signed the agreement, one of the employer’s board members promised to “countersign” the agreement. The Appellate Division held that the board member’s email constituted a sufficient basis to find that the parties intended to be bound by the agreement, particularly because the agreement did not contain any language stating that it will not be binding until executed by both sides.

Among other New York decisions, the Appellate Division cited its prior holding in the case Kolchins v. Evolution Mkts., Inc., 128 A.D.3d 47 (1st Dept. 2015), in which the court held that an employer and employee entered into an enforceable, three-year extension of the employee’s employment. In the Kolchins case, the employer sent the employee an email setting forth the basic terms of his employment, including the base salary, sign-on bonus, and other terms relating to his compensation. The employee responded, “I accept, p[lease] send contract.” After the employer prepared a draft agreement, the parties engaged in a series of emails in which they voiced disagreements over certain of its details. The Appellate Division held that despite these disagreements, the employee’s email constituted an acceptance of the employer’s offer, and that the parties entered into a three-year renewal of the plaintiff’s employment

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