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Job offers and employment agreements – a cautionary tale

Frame 1

In Adams v. Thinkific Labs Inc., 2024 BCSC 1129,  the court had to determine the terms and conditions that governed the employment relationship between the employer and the plaintiff, in circumstances that involved an offer of employment followed by a formal contract.

Background

Ms. Adams, the plaintiff in this case, successfully applied for a position with Thinkific Labs Inc (“Thinkific”). On August 19, 2021, Ms. Adams received an extensive and detailed email offer from Thinkific that outlined her compensation, work schedule, benefits, and various entitlements (the “Offer”). The Offer stated that a formal employment contract would follow when Thinkific received Ms. Adams’ full legal name and desired start date. The Offer did not contain a termination clause or any restrictive covenants.

Ms. Adams accepted the Offer on August 20, 2021, and provided Thinkific with her full legal name and desired start date. Later that day, Thinkific sent her a formal document titled “Protection of Corporate Interests” (the “Formal Document”), which Ms. Adams signed. The Formal Document contained new terms relating to termination of employment, non-competition and intellectual property.

Ms. Adams commenced employment with Thinkific on September 20, 2021, and continued working for it until her employment was terminated on May 23, 2023.

Decision

After her employment was terminated, Ms. Adams filed a claim for wrongful dismissal. At the summary trial, Ms. Adams argued that she was entitled to common law notice because the Offer, which she considered as being the binding contract between her and Thinkific, did not contain a termination clause. She also argued that the Formal Document was unenforceable because Thinkific had not provided new consideration for the significantly altered terms of employment that it contained.

On its part, Thinkific argued that the Offer was not a binding agreement because it did not include Ms. Adams’ full name and the start date, and Ms. Adams knew that her employment with Thinkific depended on her signing the Formal Document.  Thinkific further argued that it was unnecessary to provide new consideration for the changes in terms of employment contained in the Formal Document in circumstances such as the case in question.

The court agreed with Ms. Adams and held that the Offer constituted a binding employment contract between the parties because it contained detailed and comprehensive terms of employment,  and the lack of Ms. Adams’ full legal name and desired start date were simply minor administrative details. The court held that consequently, given that the Offer did not have a termination clause, Thinkific had wrongfully dismissed Ms. Adams when it terminated her employment without providing her with common law notice. On the facts of the case, the court deemed the common law notice period to be five months.

The court held that the Formal Document, which imposed new and burdensome terms on Ms. Adams that had not even been “hinted at” in the Offer, was unenforceable, because Thinkific had “imposed” these terms on her without providing new consideration other than that she could keep the job if she agreed to them.

Employer Takeaways

  • Detailed offers of employment can constitute binding contracts, even if certain minor administrative details are pending.
  • As a matter of best practice, it is preferable to have a single contract that details the terms of employment rather than a two-step process of an “offer” followed by a formal contract.
  • If an employer prefers to do both, the initial “offer” should contain just the basic terms.
  • An employer must provide new consideration if it is introducing or changing key terms of employment; it cannot rely on continued employment as consideration.

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