My colleague Chris Engler reports today on a new Connecticut Appellate Court case that focuses on a often misunderstood concept in employment contracts — the need for “consideration”.  What was it that Dire Straits’ sang about in the 1980s? Getting “Money for Nothing”?

We’ve all been told that you can’t get something for nothing.  That lesson was reiterated in a new case by the Appellate Court due to be officially released next week. 

The Facts

As told by the Court, the facts of the case,  Thoma v. Oxford Performance Materials, Inc., revolve around the employer’s attempts to attract investors. 

One investment company told the employer, Oxford, that it wanted assurances that key personnel would not leave.  Oxford dutifully entered into employment contracts with various employees, including Lynne Thoma.

The details of the contracts are important.  This first employment contract gave Ms. Thoma a higher salary, job security (termination could only be with 60 days’ notice), and a severance package.  In return, Ms. Thoma promised not to leave during the contract period and not to work for a competitor for six months after leaving.  Ms. Thoma signed this contract.

 At this point, both parties had gotten a benefit, and all seemed well.

But then a second investment company informed Oxford of its dissatisfaction because the employment contract was “too strong.”  So Oxford went back to the drawing board and crafted new contracts.

 Ms. Thoma’s second contract was quite different.  It removed all of the monetary elements, including the salary increase.  The new contract also allowed Oxford to fire Ms. Thoma without notice or cause.  Finally, it prohibited Ms. Thoma from working for a competitor.  (The length of this prohibition was unclear.  If you’re a contract jargon junkie, I recommend reading the court’s analysis in full.) 

Nevertheless, Ms. Thoma went ahead and signed this contract as well.

A year later, Oxford fired Ms. Thoma.  She demanded the benefits from the first contract.  Thus commenceth this case.

Is the Second Contract Enforceable?

Ultimately, both the trial court and the appellate court sided with Ms. Thoma, concluding that she didn’t receive any consideration in exchange for the sacrifices she made in the second contract.  In other words, she gave up some perks without getting anything in return.


Continue Reading “Consider” This Important: Employment Contracts Are a Two-Way Street

Back in June, I talked about the standard that courts will follow in deciding whether or not to enforce a non-compete agreement between an employer and an employee.  (Go read it here first.)

But many employers want to know something more straightforward: How long can I make the restrictive covenant in my agreement; in

In the July/August issue of the Connecticut Lawyer magazine, attorney Joseph Blyskal has the first of a two-part article on the state of restrictive covenants in employment agreements in Connecticut.  I’ve talked about this several times before (most recently earlier this summer), but the Connecticut Lawyer article is recommended reading as well (it’s behind a

Last month, the General Assembly passed a bill in the closing hours of the legislative session that would have voided certain non-compete agreements in the event that a business was merged or acquired.  It was a watered-down version of a bill that had been weaving its way through the legislature that would have placed

The dust is still settling from the mad dash that is the end of the Connecticut General Assembly session. 

I’ll have more in the upcoming days as events warrant, but here’s a quick look at a few items that I’ve been tracking in recent weeks. 

It’s been a crazy week here for reasons I hope to share in a future post.

But in the meantime, the world of employment law still continues. Here are some items worth reading that I had hoped to talk about further. This brief recap will have to do for now.

  • Want some tips on how

Suppose your company just purchased another small company.  As is typical in such deals, you have hired the owners under a three year employment contract because the professional services and expertise of the owners is important to the deal’s success. In that arrangement, you have a restrictive covenant that says that if and when the

An article in this week’s Connecticut Law Tribune suggests “how employees can negotiate around a non-compete agreement.” 

But let’s look at the issue from the “other” side — the employer — and ask “how employers can enforce a non-compete agreement.” 

There are a number of factors that courts in Connecticut will look at in deciding