McGuire v Van Mercury Holdings

Induced Away !

Frank McGuire was employed with a competitor company to the defendant as Vice President of Manufacturing. He was there for 18 years. He earned a salary of $75,000 and his bonus entitlement varied from a low of $15,000 to a high of $25,000 within the last 5 years.

 He was happy and secure. Along came a search agency representing the defendant company. Was he interested in jumping ship and joining the new company ?

Not really was Frank’s response – have a nice day. Two months later the same firm was on the phone again. There were quite keen, said Frank. He agreed to meet with them.

 Present at this meeting were representatives of the defendant. An offer of employment was made for a salary of $85,000 and a bonus up to $15,000. “Thanks, but no thanks,” said Frank. “Why would I take compensation which is the same as I am making now ?”, he asked.

 A week later, they were back at it. Now they offered a higher base salary of $90,000 and a “Merit Bonus Plan” which would a payment of $35,000 bonus based on the attainment of pre-determined manufacturing objectives.

 Frank agreed this time, much to his later chagrin, to accept this offer. (Otherwise why would I be writing about this ?)

 Yikes – a Nasty Employment Contract

 After 14 months of employment, Frank was fired. A modest severance offer was made of 2 months, because unfortunately, Frank had signed a contract when he started agreeing to a pre-determined severance payment on termination.

 Frank had been offered this contract when he was working with this prior company. He knew all about these terms before he jumped. It satisfied the minimum standard. Looked like there was no way of getting out of this sucker !

 The Representation which led to the Employment Relationship

 Frank was clearly lured away from his prior employer based on the promise of this bonus plan. As it happened, there was no such “Merit Bonus Plan” in place with the company, not when the discussions took place and not when Frank started and not ever when.

 Frank sued based on the misrepresentation of the existence of this bonus plan which lured him away from his safe employment.

The claim in such cases, is based on the loss of income from his prior employer ie what would have happened to his life, had these words never been misspoken.

 Frank was unemployed for 8 months and was required to move to find his new position, at a considerable cost.

Stay tuned for further developments. The trial is set for early September and it appears likely the case will be settled on very fair terms.