Herbal Magic Contract Upheld in Court

| Wednesday, October 26th, 2011 | No Comments »

There is a saying, “Hope for the best, and plan for the worst”.  When it comes to your employment, planning for the worst is critical – and a paper trail never hurts. 

Thomas McNeely was a senior executive at Herbal Magic, when a group of investors approached him about making a bid on the company.  Intent on becoming the next CEO, McNeely was actively involved in the negotiations, but reluctant to front any capital.  Eventually, he was persuaded by promises that he would be a long-term senior executive.   

The changeover occurred and McNeely was the new CEO for 7 months before being fired and removed from the board.  Believing that he was owed something more because of the promises made, he sued.  

Unfortunately for McNeely, the only thing relevant to verbal agreements in his contract was an “entire agreement” clause that nullified anything said that was not included in the contract.  Even though the defendant admitted to having made the statements, the judge ruled against McNeely.

While there are some cases in which broken promises can lead an employer into muddy waters (such as in the case of job inducement), it is best to err on the side of caution: ask for things in writing; review and negotiate employment contracts; and if it still doesn’t feel right, consult an employment lawyer.

The original article, written by employment lawyer Daniel Lublin can be found on the Metro News website *here*

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