An Employer's Promise can Become a Contract
Well, it must be getting ready to snow in July, because the Texas Supreme Court issued a pro employee decision. See Mike Maslanka's post. In a 9-0 vote no less, they found in favor of a group of employees who stuck around when an employer was being sold. Management had told the employees that if they stayed until the comnpany was sold, they would receive 5% of the sales price. They stayed. But, the company reneged and refused to pay them the 5%. The employees sued on basic contract principle: if you take action based on a promise, then that promise becomes a contract. The company defended on the basis that the employees could have terminated the employees at any time. Thus, the promise was illusory.
The Texas Supremes disagreed, finding that if the employer's argument was accurate, then any wage, salary or pension would be illusory. So, yes, if an employer promises a percentage of the sales price, and the employees rely on that promise, then that promise becomes an enforceable contract. Venegas v. American Energy Services (Tex. 12/18/09).
