Is an unwitnessed verbal employment contract binding?

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Is an unwitnessed verbal employment contract binding?

I am salaried and guaranteed 80% minimally. As per my contract, I am to pay back or be given a bonus quarterly. Being my first year, the boss told me she would not make me pay back, as I am working hard at earning my keep. Now, I want to leave my job. If she asks for the 20%, will I have to pay it, or is her prior statement protective? Does it matter that she has interfered in ways that lower my productivity, thereby limiting my earning?

Asked on April 6, 2011 under Employment Labor Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

First, an oral or verbal contract is enforceable. Second, it does not have to be witnessed to be enforceable, though certainly if there were no third-party witnesses, it can be difficult to prove the existence or terms of the agreement if the two parties to it disagree or have different recollections.

A larger issue though, is whether it was a contract. A contract requires consideration, or some change in status or behavior, or some "payment" of some kind, to be enforceable. Without consideration, it's just an enforceable "promise." So if the statement you allude to was made prior to you taking the job, it's probably enforceable--it was part of the job offer, you tendered consideration by coming to work for the company, etc. On the other hand, if sometime after you'd been working there, your boss said, "Don't worry John/Jane Doe--if you don't make your numbers we won't make you pay back any money," that's just an unenforceable promise and it does not bind.

A company is NOT generally obligated to stay out of an employee's way. While certain overt acts--not letting a sales rep make sales calls!--might be considered to be a violation of an explicit or implicit agreement or commission agreement and give the rep some claim if he/she can't make numbers, simple "bad management" would not be; the law does not require companies to manage well.

So overall, before acting, consider that based on the context, the promise may be unenforceable, and even if it is enforceable, it may be difficult to prove it.


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