The following is a great blog swap post from fellow Yakezie member, Super Frugalette. You can check out my financial do over at her blog today as well!
I lost $24,700 by not having a lawyer review a document.
The Beginning
Long ago, I was working in the marketing department of a retailer with an office in Connecticut. The retailer had recently been acquired by a UK company. The UK company set out to reduce costs and decided that the various local offices would be consolidated. My office was on the elimination list.
I received a job offer to move with the company to Maryland. One of the items put on the table as an incentive to move was a letter stating that if my position was eliminated I would receive half of my salary. About 7 other people decided to move, and all of those people had positions of far greater seniority than I did. No one that I was aware of questioned that part of the offer or felt that they needed to have a lawyer review it.
My Hesitation
I had issues with my offer in general. I told my director that I would only move if I was made a Marketing Manager and received a $11,000 pay raise to $50,000. He told me that he could “get that for me” but as the move approached, I never received a revised agreement. My director was not directly employed with the retailer. He was on “loan” from the UK company and although he reported to the president of the company, he was not hired by the president. He was focused on trying to obtain his “deal”–his relocation package, etc.
Yet, since he was neither directly hired by the president of the company nor would the president have hired him, he was in an awkward situation. How do you negotiate with someone who has to “tolerate” you? He had been moved to Connecticut and now that the company was moving, he would have to move again—not part of his initial agreement.
I rescinded the job offer two weeks before the office move but told my boss that I was willing to travel to Maryland to consult. My boss was in disbelief. He called a meeting with the other director that I reported to. My other boss took my side, she told him flat out that he failed to “carry out” in writing the things that he had “promised”. Did he really think I would go without anything in writing?
My Loss
I started working in Maryland in May. Within four months 9/11 happened…which devastated the business. My company owned retail stores in airports and on the US/Mexican and US/Canadian borders. Travel came to a standstill. The company was bleeding money…just when I thought it couldn’t get any worse…
I was told that my company was sold to three gentlemen from Florida and the Maryland office was closing.
My “Maryland” job was now moving to Florida. Thus, I was really excited about having this agreement since it would offer me six months of salary while trying to find a new job in Maryland. I learned from the new COO that the agreement would never stand up in court. One of the women who was offered relocation to Maryland had her agreement redrafted by a lawyer. Her agreement would have stood up, but she elected to move to the New York office.
If I had paid a lawyer $300 or so to look at the offer letter, I would have been $24,700 richer. Moral of the story …have a lawyer look at everything!
Crystal’s Comments: Ouch!!! That really and truly sucks!!! I would never have thought to get a lawyer to review the document – huh. They should have held up their end of the deal whether it would have held up in court or not! Grrrr…
Anybody else want to share their biggest financial loss or mistake? What would you do over if given the chance?
This is a wonderful example of penny wise and pound foolish. I to have been guilty of these types of mistakes. This is a wise warning for all.
Yep, sometimes those lawyer dudes are actually worth what they charge. In an instance like this, they would have certainly been worth the value! Thanks for sharing the story. I’d rather not make a similar mistake.
That’s pretty crazy. Thankfully, I’ve never had to get a lawyer involved in any situation with an employer. The closest I’ve ever gotten is when an employer let me go but kept on paying me for two months. I knew they’d want the money back, I kept telling them every time that a deposit showed up, and when they finally asked for it back, I asked to keep a portion of it due to the stress it caused as well as that I had been up front about it the whole time. We did work something out and they kept their end of the bargain up, but it probably could have been worse now that I hear stories like this.
I find it shocking the documents an employer will give to you and have you sign and their lack of legal standing. Non-competes are another example, they aren’t enforceable in many states but employers will still make you sign them. I feel like it’s unprofessional to put something in writing that sounds binding but isn’t. Keeps the lawyers in business I guess.
What an awful story! My husband has dealt with non competes his whole career. So many documents just do not hold up on court. Then again, it can also be expensive to go to court to fight the company.
I hope you found another job quickly.
I very good lesson to have a lawyer review a document or participate in a situation which is not all that common. My father spent some time in a nursing home recently and it wasn’t clear if the need was permanent. My mother and I met with an elder care and rights attorney to help negotiate the maze of Medicare/Medicaid requirements and paperwork. Best money ever spent as now we have a plan if my dad has to go back (he made it home).
It is always good to have someone look out for you in an agreement. In essence, that is what a lawyer would do for you by reviewing the document. If you think about it, the company’s document was written by their lawyer who was looking out for the company.
Interesting story…I do understand the hesitance though. Considering what I know, I would probably need to hire a lawyer for just about everything lol…and that does get expensive. Unfortunately you can have situations like yours where they really pay off.
Lawyers can be useful sometimes! Ouch!
I am confused on why the document they signed and you signed in good faith would not stand up in court yet if a lawyer looked at it, he/she could have made it stand up. Are you sure the COO was not lying? Did you check with a lawyer then?
@ginger If a lawyer had looked at the document, she might have made changes. I could have then gone back to my company and renegotiated the new “clause” as part of my moving package.
I did lose some money, but I did get a $11,000 raise, a new marketing title, and I was able to buy a house since I was moving to Baltimore which was far cheaper than Connecticut. Can’t discount the blessings….
Another couple handy hints for people having employment contracts:
1) Have someone with experience in employment contract law do the review.
2) Be careful with contracts that go across state, provincial or national boundaries. Not everything is the same on the “other side of the fence”.
Know your rights, know the case law, and know a good specialist lawyer.
Ouch! It’s crazy how we don’t think to have a lawyer check over an agreement. As much as people don’t like lawyers, they serve an important purpose of protecting assets. Thanks for sharing this with me, I will definitely take the time to hire a lawyer for a situation like this in the future.
Ginger you make a good point. The COO could have been lying. I was also in an interesting situation. I had developed a good relationship with the COO and the new owners were having me travel to Florida and “train” my new boss, which put me in a good position for exposure for the new owners.
I did travel to Florida for six months. The “new boss” did not last. She was let go and I was given her job and a $10k raise. Did I really want to sue the company at that point when I had been given work in Florida?
To sum it up, if I did not agree to commute to Florida (since the clause was that I did not have a job in Maryland), the $24,700 would have come in super handy. However, by commuting to Florida, I eventually received an additional $10k raise and I learned quite a bit along the way.
that’s where a lot of us go wrong – professionals are there to help. yes the fees are steep but i’d rather have the insurance and peace of mind. lesson learned – it could have been worse right?
Yes. I agree. Not all lawyers are bad. And I salute on them. They are the one who is really faithful on there profession but not in the form of money. They are the one who are willing to help.
[...] Sometimes a vacation can be fun, but the bills afterward may be daunting.- Super Frugalette shares How a Lawyer Could Have Saved Her $24,700 at Budgeting in the Fun Stuff. Maybe lawyers are worth it sometimes?- Jason from Live Real, Now [...]
[...] Super Frugalette shares How a Lawyer Could Have Saved Her $24,700 at Budgeting in the Fun Stuff. Maybe lawyers are worth it [...]
[...] Super Frugalette shares How a Lawyer Could Have Saved Her $24,700 at Budgeting in the Fun Stuff. Maybe lawyers are worth it [...]
[...] Via Budgeting In The Fun Stuff, Super Frugalette reminds us that, when there’s a significant amount of money involved, spending a few hundred dollars on an attorney isn’t wasteful. [...]
[...] weeks ago, Super Frugalette and I swapped blog posts about our biggest financial mistakes. Her $24,000 loss due to a bad work contract got so much interest that we both thought a continuation post was a [...]