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Don’t stretch truth in exchange for lawsuit waiver

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in Employment Law,Firing,Human Resources

Issue: When will a court hold you to an employment contract?

Risk: Promising a former employee that you'll fudge the truth on job references in exchange for a lawsuit waiver carries legal risks.

Action: Never promise to tell references anything but the truth about former employees.

Former employees may ask you to put the best face, possibly an unrealistic one, on their employment records, in exchange for waiving any lawsuit claims against you. But don't enter into any agreement that requires you to bend the truth or just outright lie about a former employee's performance.

As the following case shows, you'll be held to any questionable agreements you make with ex-employees.

Instead, if you sign a waiver or severance agreement with an employee, include a provision saying that you'll provide only a neutral letter of reference.

Recent case: After Texas A&M University fired clarinet instructor Grant Lawson, he sued for wrongful termination. Lawson ended up settling his case in return for cash and the university's written promise that prospective employers would be told that he was an "assistant professor."

In truth, Lawson was not an assistant professor.

When a potential employer called, Texas A&M's personnel director said Lawson was not an assistant professor. Lawson wasn't hired for that job, so he sued the university for breach of contract.

Texas A&M argued that the "assistant professor clause" was unenforceable because it required the university to lie and withhold the truth from the public.

Result: Lawson won. The appeals court said that while courts can declare a contract void because it calls for an illegal act, a contract "that could have been performed in a legal manner will not be declared void because it may have been performed in an illegal manner." (Texas A&M University-Kingsville v. Lawson, No. 03-03-00129-CV, Texas Ct. App., 2004)

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