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Why You Need to Read Your Next Employment Contract

A fairly common trick many law school professors like to play on new students is to hand them a pretty lengthy agreement of some sort and ask that they sign and date it. Most everyone complies and hands them back in within a matter of seconds. A handful of stragglers takes their time and hands theirs in after a minute or so. It’s at that point the professor will congratulate the slower group and admonish the early birds for skimming or even ignoring the contents of the agreement. Sometimes the text explicitly says something like “don’t sign this” or “hand it in face down” just to see whether anyone’s paying attention.

The point of the exercise is to make it clear to people on their path to being lawyers that they should never again sign anything without reading and understanding the agreement. Being constantly bombarded with contracts, whether it’s leases or mobile phone agreements or even the terms of service for iTunes, it’s hardly uncommon to skip the slew of boilerplate language and just sign or click to save time and get on with life. But the law professors want the students to realize it’s now their duty to peruse all those clunky words, and there’s no reason the same rule shouldn’t apply to everyone, since making sure you know what you’re getting into ultimately is for your own protection. As a recent case from the Georgia Court of Appeals shows, it’s sometimes to your benefit, too.

In July, the Court of Appeals reminded us that it always pays to cross one’s Ts and dot their Is. The case of MAPEI Corporation vs. Prosser was a battle over which employment contract was binding when the employee was given two separate agreements on different dates with different terms. At first, anyone who’s dealt with employment contracts might guess that they know where this story is going, since the employee usually has little input or influence on the company’s standard terms, making the contract less of an evenly-negotiated agreement than it is an edict of “here’s how it’s going to be if you want to work for us.” This time, however, the contract-happy company didn’t come out the victor.

MAPEI produces adhesives, solvents, and chemicals for building. Stephen Prosser became an employee of MAPEI in June 2011 after it purchased his employer. As a condition of his continued employment, he had to sign an agreement with a non-compete clause on June 7. A week later, he was given and signed another very similar agreement, although this one omitted the non-compete clause. He left MAPEI a few months later and took a job as a chemist for another company, which led to MAPEI suing him for breach of the agreement with the non-compete clause. The trial court granted Prosser’s request for summary judgment, finding that the second agreement without the non-compete clause replaced the first one. The Court of Appeals agreed.

A good deal of the win for Prosser seems to have come from the fact that MAPEI got a little too contract-happy, inundating its new employee with redundant paperwork without taking care to make sure it was all relevant and correct. Although the original agreement was signed before the one without the non-compete clause, Prosser actually handed the first one into his supervisor after the second one, which MAPEI argued meant that the timing ratified the first contract’s non-compete clause and nullified the subsequent agreement. The Court used basic contract law to determine that the agreements were entered into at the time they were signed, not when they were delivered, so the second agreement prevailed.

MAPEI also pointed out that the second contract contained other errors, such as saying it was to be governed by Florida law instead of Georgia law, and it did not specify Prosser’s place of employment as the first one did. These errors, the company argued, should have been so obvious to Prosser that he would have reasonably known the contract wasn’t meant for him, and it also pointed to his eight-day delay in signing the second agreement after signing the first as proof there was a mutual mistake. The Court felt otherwise, pointing out that MAPEI is a Florida-based company, so invoking Florida law would not be too unusual. It also said it would be pure speculation to assume that the delay in signing was indicative of a mutual mistake and that it might actually have been a strategic decision by Prosser, who, with two contracts in hand, opted to go with the one containing terms more favorable to him.

In a last-ditch attempt, MAPEI argued that the second agreement, which had many similar sections as the first, only replaced those elements that were substantially different, such as the revised confidentiality provisions. Since the non-compete and non-solicitation covenants weren’t modified, which was because they weren’t included, the original terms should stand, said the company. Again, the Court relied on basic contract law and pointed to MAPEI’s own language of the superseding clause in both agreements:  “This Agreement totally replaces all prior contractual agreements or understandings between us, whether oral or written, about confidential information or any other subject matter contained herein.”

Oops.

The moral of this story? Readers are leaders, particularly when it comes to something as important as an employment contract. Although Prosser might have just been the lucky beneficiary of the company’s mistake, it’s just as likely that he knew what he was doing and wanted to protect his future opportunities. Either way, the most important thing is that Prosser’s employment rights were protected.

If you have questions about your Georgia or Tennessee employment contract, contact an experienced Atlanta employment law attorney today at 1-877-986-5529. Mays & Kerr represents plaintiffs in employment matters, including employment discrimination, wage and hour, FMLA, and more. With offices in Atlanta and Nashville, we offer a client-centered philosophy and strive to accomplish our clients’ goals as if they are our own.

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