Offer Letters | The Power of Documents

Letters offering job positions are another type of powerful document. Offer letters can be enforceable as contracts if they are specific enough even if both parties do not sign them. These letters are particularly important where specific promises are made which the employee relies on in changing jobs or relocating. Look for guarantees of employment for a specific length of time, specified salary, bonus and stock option terms and/or job title and job responsibilities.

If the new position involves a start-up or new division, be particularly careful. You may want the offer letter to include a reference to adequate financial backing and/or corporate commitment by the parent corporation or venture capital group. If you are a commission based sales person, you may also want some reference to the status of any new key product in development. If the value of promised stock options are important, you will want something about the financial condition of the company and specific representations as to the number of options, strike price and vesting schedule relating to the options.

If the offer letter does not specify the terms you will be relying on, request those terms in writing prior to accepting the position. If that is not possible, at least confirm the verbal terms in writing with your own letter as evidence to protect yourself.

In general, vague references to a “possible equity position”, “stock options in a plan to be established by the Board of Directors”, and a “bonus based on performance” are not enforceable. Moreover if the offer letter specifies that you will be an “at will” employee or that you can be terminated at any time for any reason, take heed and do not rely on any verbal assertions to the contrary.

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