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January 28, 2013

Reminder from Texas That Oral Employment Agreements Can Be Enforced (December 2012)

Filed under: Legal Updates — admin @ 11:02 am

December 2012 – A recent case from Texas serves as a good reminder that promises made in the workplace can be enforced under certain circumstances, even if they are not in writing.  The Texas Court of Appeals was not persuaded by an employer’s argument that an agreement to continue providing sales commissions to its employee even after his employment ended was unenforceable simply because it was an oral agreement.  The court explained that the agreement constituted an enforceable oral employment agreement of indefinite duration.  Because the agreement could potentially be fully performed by the parties in less than a year, the agreement was not rendered void under the Statute of Frauds, which normally requires certain contracts to be in writing.  See Kalmus v. Ella Oliver and Financial Necessities Network, Inc., No. 05-11-00486-CV (Tex App., November 20, 2012).  Oral employment agreements can be enforceable in most states.  In Georgia, for example, employees have successfully enforced such oral employment agreements to obtain, among other things, the right to participate in a profit sharing plan (see Wood v. Dan P. Holl & Co., 169 Ga. App. 839 (1984)) and the right to receive three months’ notice before termination (see Parker v. Crider Poultry, Inc., 275 Ga. 361 (2002)).

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