Make Sure it's in the Employment Agreement
It's a good idea to get off on the right foot in an employment relationship. It's even more important to get it in writing. In a very recent case from the Federal District Court of New Jersey, Qile Chen v. HD Dimension, Corp. et al, 2010 LEXIS 120599 (2010), one employee found out the hard way that some of the boilerplate terms of an agreement do matter.
In the case, the Court was asked to consider allegations of misrepresentation and fraud that an employee brought against his employer. According to the employee, Chen, he was fraudulently induced to enter into an employment contract and never received the benefit of many of the employer's promises. Chen claimed that during pre-employment negotiations, HD promised to: employee him for five years; apply on his behalf for a visa; and assuming he obtained his visa, HD would place Chen with a U.S. corporation within two to three months of training. Because of these promises, Chen said that he was induced to execute an employment agreement.
The problem for Chen is that he never got those alleged promises into the final draft. What's more, the agreement contained a boilerplate integration clause that stated that the contract contained the parties "entire understanding." The provision also contained language that Chen had not relied upon any representation that was not contained in the agreement. The District Court held that the "entire understanding" clause evidenced the employee's acknowledgement that there were no representations made to induce Chen to enter into the contract. Consequently, the employee had no legal recourse for his claim.
The case (although an unpublished decision) demonstrates the need to have the "entire understanding" in the papers. It also shows that having a trained eye review a contract is always a better way to go. If you have a comment about this case or need us to look over your employment contracts, drop us a line.