Monday, June 15, 2015

Negotiating an Employment Contract When Relocating to Pennsylvania or Quitting One Job to Take Another

I Have a Job Offer That Would Require Me to Move to Pennsylvania or to Quit My Present Job- Am I Protected Under Pennsylvania Employment Laws?

In Pennsylvania, all workers are considered "employees at will" unless they are part of a union, employed by the government or protected from termination by a contract.

So, unless you are a union worker, government employee or party to a written employment contract, the "at will" doctrine protects employers from lawsuits arising from terminations that are unfair, based upon a mistaken belief in a set of facts wrongfully implicating the terminated employee or firings resulting from intentional actions by a co-worker or supervisor designed to bring about the your termination.  

NOTE 1:  In Pennsylvania, there are some limited exceptions to the "at will" principle.  The most common exceptions are contained within anti-discrimination statutes such as Title VII, the Americans With Disabilities, Act and the Age Discrimination in Employment Act, etc.   In addition to the anti-discrimination statutes, there are some other laws that make it illegal to fire employees who have asserted their rights thereunder.  The most common of these laws are the Family and Medical Leave Act, the Fair Labor Standards Act (requiring the payment of minimum wage, overtime, etc.) and the Pennsylvania Workers' Compensation Act.
Relocating to Take a New Job Exciting -
but Risky Without a Good, Solid Contract
The "employment at will" principle applies if you take a job down the street, or if you move from Alaska to Pennsylvania to take a job.  It applies even if, 3 months after moving to Pennsylvania from Hawaii, you are fired because the company misapprehended its needs when it hired you, or because the boss does not care for your approach, or because a customer that had agreed to use your new employer's services backed out of its promise.

NOTE 2:  As I hope is apparent, "at will" employees rarely have a case for "wrongful termination." However,  recognizing that the "at will" principle can result in harsh outcomes, Pennsylvania does provide some remedy to "wrongfully" terminated employees.  This remedy is unemployment benefits. If one can prove that he/she was terminated without good reason, one is entitled to receive unemployment compensation.

If You Intend to Move to Pennsylvania to Take a New Job, or Wish to Quit Your Current Job to Take a More Attractive One, You Should Protect Yourself With a Written Contract/Employment Agreement

The Chippah and the Boss -
Parties to a Contract
In 2013, Chip Kelly decided to leave his job as head coach of the Oregon Ducks in order to relocate to Pennsylvania to become the head coach of of the Philadelphia Eagles. Coach Kelly was beloved in Oregon, where he probably had a "job for life."  Moving to Philadelphia was risky on a number of levels, not the least of which was that he had never coached in the NFL.


It means that the Eagles were required to pay him roughly $6.5 million for each of the 5 years covered by the contract.  I would guess the Eagles also threw in some relocation expenses, as well.

Yet, while relocation expenses are important to the average person, the real key to Kelly's contract was the fact that is was "a 5-year contract."  What that basically means is that the Eagles obligated themselves to pay Kelly the full $32.5 million over the 5-year contract period - whether they kept him employed for those 5-years or not.

While we would all like that kind of job security (and income!), obtaining some degree of job security rises to a nearly essential level for relocating or "job switching" workers. That is so because, in the absence of a written contract, the "at will" doctrine overrides any and all inequities that typically arise when a recently transplanted employee is terminated shortly after uprooting his/her life based upon a set of verbal promises made by the prospective employer during negotiating, none of which are included within an enforceable written agreement.

If the Offer Letter Does Not Contain
Important Promises Made to You,
You Should be Concerned
NOTE 3:  Many job offers extended to relocating or job switching candidates are set forth in a letter, commonly signed by an HR representative (rather than by the person with whom the employee actually negotiated).  While most companies "puff" when negotiating (i.e. make attractive promises), written job offer letters are typically form letters that do not include the "promises" made by the person that actually solicited your employment.  Almost all of these letters state that you are to be "employed at will."  If you are alarmed because the offer letter fails to include important promises made to you by the person with whom you actually negotiated the offer, you have good reason.  That is so because the terms in the letter, and not the verbal promises, will control the situation if you are subsequently terminated.

Protect Yourself by Negotiating an Employment Agreement That Provides That You Cannot be Fired Except for "Good Cause"

Now, although I have never seen Chip Kelly's contract, I have negotiated many like it (although never one of such magnitude!) and I can assure you that there are exceptions to the Eagles' promise to employ and pay Coach Kelly for the full 5 year period.

The most common clauses that enable an employer to terminate a contract short of its expiration date are commonly referred to as "good cause" covenants.  A "good cause" provision in an employment agreement that extends over a period of years is one that spells out (the more specifically, the better) "bad" behavior that would permit the employer to terminate the employee without further obligation.  
Bad Deeds = "Good Cause"
Common "good cause" reasons for termination typically include being convicted of a felony, engaging in gross misconduct/negligence and overt refusal to honor material obligations required under the contract.

An Employment Contract for a Period of Years Will Often Include a Severance or "Buy Out" Provision

In addition to including termination provisions covering "bad" conduct by an employee, the typical employment contract recognizes that the relationship may not work out despite good faith by all involved parties, and provides a reasonable exit strategy.  In this way, I suppose, it is much like a prenuptial agreement!

Spell Out an Exit Strategy in a
Clear, Fairly Negotiated Employment Contract
So, if during the first 3 years of the contract, Coach Kelly tries really hard, but the Eagles lose every game each year, the Eagles will be permitted to end the contract, provided that they provide proper "notice," and "buy out" some or all of the balance of the contract.  I do not know the particulars of Chip Kelly's contract but, for the average worker, the "buy out" would at a minimum include payment of severance and medical benefits for a predetermined period of time.

Misrepresentation Cases for Relocating or Job Switching Employees Rarely Succeed Under Pennsylvania Law

When people call to inquire about whether they can sue because they were induced to quit one job to take another (and/or to relocate) only to be fired soon after, they frequently assert that the company misrepresented itself during the negotiations.  That will not help under Pennsylvania law, since the "employment at will" doctrine supersedes such arguments in all but the rarest cases.

That is why, the best, safest approach when considering quitting one job to take another, or to relocate to Pennsylvania to take a new job, is to negotiate a written agreement that spells out the parties' respective rights, duties and obligations. 

Protect Yourself, and Test the Good Faith
of Your Potential New Employer
If you are concerned that trying to negotiate a fair deal will be viewed as unduly aggressive or paranoid, and will thus cost you the job offer, you may want to ask yourself one basic question: Am I willing to trust these people under these circumstances?  If you are, then take the job with eyes wide open.  But, in my view, a company that will not negotiate a fair employment arrangement with you is not worthy of your trust.  

In this connection, by the way, my experience has been that good companies that want to hire attractive candidates are always willing to engage in negotiations that culminate in the inclusion of reasonable covenants that protect the individual from termination without "good cause."


Helping Pennsylvania Workers
Since 1991
Philadelphia Area Employment Attorney Representing Employees

John A. Gallagher is an employment lawyer who represents employees in Pennsylvania. 

John typically represents workers who need an employment lawyer in Philadelphia County, Chester County, Delaware County, Bucks County, Berks County, Lancaster County and Montgomery County.

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If you are looking for an employment lawyer, and live or work in Malvern, Wayne, King of Prussia, Downingtown, Glenside, Doylestown, Radnor, Newtown Square, Exton, Philadelphia, West Chester, Skippack, Langhorne, Haverford, Nether Providence, Broomall, Drexel Hill, Reading or any of their surrounding towns, feel free to send me an e-mail or give me a call.  I am always glad to spend some time with people via a free telephone consultation.

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