In Adams v. Thinkific Labs Inc., 2024 BCSC 1129, the BC Supreme Court considered the enforceability of a detailed written employment contract which was sent to an employee after they had already accepted an offer of employment from the same employer hours earlier. This case reinforces why employers are best to avoid two-step employment offers and should include all essential terms in one – and only one – offer.
Background
On August 19, 2021, the employer emailed the plaintiff an offer of employment (the “First Offer”). It contained almost 60 pages of detailed information outlining areas such as her compensation, vacation, benefits and work schedule but did not include terms about termination of her employment or non-competition. Adams accepted this offer on August 20, 2021.
Later on August 20, 2021, the employer sent the plaintiff a detailed employment agreement which included information not included in the initial email offer, including termination and non-compete provisions (the “Second Offer”). Adams signed and returned the Second Offer that day.
About twenty months later, the plaintiff’s employment was terminated and the employer relied on the termination clause contained in the Second Offer. The plaintiff disputed the enforceability of the Second Offer (and the termination clause) on the basis that she received no consideration in exchange for the Second Offer.
Enforceability of the Second Offer
The Court was required to determine whether the terms of the First Offer or Second Offer governed her notice entitlements on termination. Ultimately, it was determined that the First Offer – and Adams’ acceptance of it – constituted a complete employment agreement. To amend that agreement or to introduce new terms, the employer would have needed to provide fresh consideration (something additional of value) to the plaintiff in exchange for those additional terms. No fresh consideration was provided and so the Second Offer was not enforceable. The First Offer governed.
Because the First Offer did not contain any express termination provisions, Adams was entitled to reasonable notice at common law upon termination. The notice period was determined to be five months.
Key Takeaways
The primary takeaway from this decision is clear: employers should avoid communicating offers of employment in a two-step process (a summary offer followed by a more detailed written contract). Ideally, offers of employment should be communicated in a single, formal written employment agreement containing all of the terms and conditions of the employment. If additional amendments or new terms are sought, they must be supported by fresh consideration. Taking a two-step approach, as the employer did here, can unfortunately result in an unenforceable agreement and an unexpected severance liability.
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