Employer put stop payment on severance check

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slar44

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My former employer paid me severance under an oral agreement, then became angry that I asked him for vacation pay that he still owed me, and subsequently put a stop payment on the check. I have a complaint with the labor department for the vacation pay, which they inform me I am likely to win. But since there was no contract or written agreement for the severance pay, I was advised to go to small claims court for the stopped check. What are the laws around stopped checks? Does his writing it in the first place indicate his intention to pay me, in the absence of a written agreement?

Thank you so much. I have the hearing on Tuesday so any information would be greatly appreciated.
 
His writing the cheque is a promise to pay. If he stopped payment, he broke the promise. He's liable to make good on it. Depending on your jurisdiction, he may have certain defences (like he received absolutely nothing in return for the cheque, or you obtained the cheque by fraudulent means). Failing those, you should succeed.
 
In what state did this occur?

Dee Dub, from your spelling I suspect that you are not in the US. US law and UK/Canadian law are very different, and I do not believe that US law would agree with your interpretation.
 
Dee Dub is correct even if he is Canadian. The employer can not give money under oral terms; cut a check, then welch with a stop payment order in the U.S, Canada, or any where else that is civilized. If the amount is under your jurisdictions small claims award threshold file in small claims court. Otherwise contact an attorney. The only evidence required is the canceled check. This is basic contact law. Once an agreement with consideration is entered, and a party performs, the other party owes the consideration as agreed. A party cannot unilaterally change the terms of an agreement with consideration after one party has performed.
 
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Your welcome.
 
Since New York is an "At Will" state, would the severance pay be considered a "Gift"?

If it is a gift, then the employer has every right to place a stop payment. There is no broken contract.
 
No its not a gift once mutual assent and performance has occurred. There was a meeting of the minds the employer agreed to severance pay then wrote a check. That creates a contract. At-will just means you can be fired for any reason it does not mean they cant pay you or live up to the terms of hire at-will. Otherwise the you could pick up your pay check at the end of the week, get shorted a hundred bucks, and the employer can claim at-will.

Thats not how that works.
 
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I seriously doubt that simply writing a check constitutes a legally binding contract to pay severance. Wages are due by law. Severance is not.
 
cbg said:
I seriously doubt that simply writing a check constitutes a legally binding contract to pay severance. Wages are due by law. Severance is not.
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Then you don't grasp basic contract law. Severance is due by law once it is agreed to by both party's. In the posters case not only was severance agreed to the employer cut a check for it.

An offer and acceptance makes an agreement with consideration. If not written, the agreement is oral. Oral (parol) contracts are legal and may be enforced by a court action.
 
For my money, the employment law issue is secondary. It's not a question of whether the person is entitled to severance; it's a question of whether the employer agreed to pay him severance and reneged. And as far as bank/contract law goes, if you stop payment on a cheque, you are liable to make good on it unless there is some good reason why you should not. Granted, this is Canadian law I am speaking of. I would speculate that US law is not significantly different. I am advised that in some US jurisdictions the test is whether you stopped payment "in good faith". Y'all know what "good faith" means - honourable intent, lack of attempt to deceive, that sort of thing. I'd like to see how the employer argues that reneging on the agreement was done in good faith.
 
dee_dub said:
For my money, the employment law issue is secondary. It's not a question of whether the person is entitled to severance; it's a question of whether the employer agreed to pay him severance and reneged. And as far as bank/contract law goes, if you stop payment on a cheque, you are liable to make good on it unless there is some good reason why you should not. Granted, this is Canadian law I am speaking of. I would speculate that US law is not significantly different. I am advised that in some US jurisdictions the test is whether you stopped payment "in good faith". Y'all know what "good faith" means - honourable intent, lack of attempt to deceive, that sort of thing. I'd like to see how the employer argues that reneging on the agreement was done in good faith.
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You got it right Ah. Duty Of Good Faith And Fair Dealing is covered in the U.S under Restatement (Second) of Contracts § 205.
Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.
d. Good faith performance. Subterfuges and evasions violate the obligation of good faith in performance even though the actor believes his conduct to be justified. But the obligation goes further: bad faith may be overt or may consist of inaction, and fair dealing may require more than honesty. A complete catalogue of types of bad faith is impossible, but the following types are among those which have been recognized in judicial decisions: evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms, and interference with or failure to cooperate in the other party's performance.
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I am sure all the common law English speaking country's have similar type wording somewhere. Employment law has bubcas to do with the posters problem.

Not every single problem that arises in the work place falls under employment law. If the employers argument is I don't have to pay severance because it is not required by Federal or state employment laws, so I promised to then cut a check after the employee performed. Then the judge certainly wont entertain that position.

In fact if the employer tried it the judge has it in his discretion to consider it part of the employees wages entitling the employee to double damages under the Federal wage law or an additional 25% under New York law as well as a $500.00 civil penalty.

Basically it is a wage if a judge declares it a wage, and a judge has the authority to declare it a wage, so I would be surprised if the employer would even take a cbg position like that in open court. It would only open the employer up to further problems than a make whole award provided for in contract law.
 
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I'm not arguing that the severance isn't owed. I don't know if it is or not. It could be. We don't have all the details about any arrangments or agreements between the employer and employee. But if it is, it's not because the employer wrote a check.
 
In fact slar44 cut and paste these, check the statutes to make sure they are still good law in case the employer wants to play cutesy like cbg post #10:
§ 197. Civil penalty. Any employer who fails to pay the wages of his
employees or shall differentiate in rate of pay because of sex, as
provided in this article, shall forfeit to the people of the state the
sum of five hundred dollars for each such failure, to be recovered by
the commissioner in a civil action.

§ 198. Costs, remedies. 1. In any action instituted upon a wage claim
by an employee or the commissioner in which the employee prevails, the
court may allow such employee in addition to ordinary costs, a
reasonable sum, not exceeding fifty dollars for expenses which may be
taxed as costs. No assignee of a wage claim, except the commissioner,
shall be benefited by this provision.
1-a. In any action instituted upon a wage claim by an employee or the
commissioner in which the employee prevails, the court shall allow such
employee reasonable attorney's fees and, upon a finding that the
employer's failure to pay the wage required by this article was willful,
an additional amount as liquidated damages equal to twenty-five percent
of the total amount of the wages found to be due.
2. The remedies provided by this article may be enforced
simultaneously or consecutively so far as not inconsistent with each
other.
3. Notwithstanding any other provision of law, an action to recover
upon a liability imposed by this article must be commenced within six
years. All employees shall have the right to recover full wages,
benefits and wage supplements accrued during the six years previous to
the commencing of such action, whether such action is instituted by the
employee or by the commissioner.
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The LawProfessor has a link here for N.Y law as well. http://www.thelaw.com/ny-law/index.php?law_id=13&art_id=397&dsc=1
 
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cbg said:
I'm not arguing that the severance isn't owed. I don't know if it is or not. It could be. We don't have all the details about any arrangments or agreements between the employer and employee. But if it is, it's not because the employer wrote a check.
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The check is the signature by both party's to the agreement that is the details and arrangements signed on the dotted line. I feel 99% certain only 1 person out of 1,000 would need more convincing there was a contract.
 
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No its not a gift once mutual assent and performance has occurred. There was a meeting of the minds the employer agreed to severance pay then wrote a check. That creates a contract. At-will just means you can be fired for any reason it does not mean they cant pay you or live up to the terms of hire at-will. Otherwise the you could pick up your pay check at the end of the week, get shorted a hundred bucks, and the employer can claim at-will.
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Your analogy doesn't fit. The employer is required to pay wages, yet severance pay is not a requirement. Thus I was inquiring if it could be considered a gift. By offering the severance pay, what did the employee put on the table? How can this be considered a contract agreement? The employer had no obligation, thus I feel it is a gift and the gift was withdrawn.
 
FlaRiptide said:
Your analogy doesn't fit. The employer is required to pay wages, yet severance pay is not a requirement. Thus I was inquiring if it could be considered a gift. By offering the severance pay, what did the employee put on the table? How can this be considered a contract agreement? The employer had no obligation, thus I feel it is a gift and the gift was withdrawn.
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Thats an interesting theory it's a better argument than severance pay is not required by law. I doubt the judge would buy it, of course he could.

It's still not a good reason not to file in court. It's pretty thin your arguing that there was not a quid pro quo, however there was a meeting of the minds and it was agreed that severance was in order for past or future performance before resigning.

If the employer wrote a severance check in order to escape the amount of vacation pay that would be sham bargaining. A promise that is illusory can not serve as consideration.

Therefore there will be no consideration issue if the party who made the illusory promise is trying to avoid performance. In that case the judge could order the employer to pay both, or throw the severance pay out as a sham in order to avoid performance on the vacation pay which is filed with commissioner. Hmmmm? I still think the poster has a very strong case with the canceled check. The reason being it was agreed to as severance by both party's, not in liu of vacation pay which would be illusory. I dont think your argument could work for the employer.
 
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Severance ISN'T required by law. Not even you are trying to claim otherwise.

But you're twisting what I said. You're trying to make it sound as if I'm saying, since it's not required by law, the employer isn't required to pay it, end of statement. That is NOT what I said. I acknowledge the possibility that a contract exists. But you have not convinced me that simply writing a check is what proves it. I could write a check made out to you today, then tear it up. That doesn't mean I owe you any money.
 
cbg said:
Severance ISN'T required by law. Not even you are trying to claim otherwise.

But you're twisting what I said. You're trying to make it sound as if I'm saying, since it's not required by law, the employer isn't required to pay it, end of statement. That is NOT what I said. I acknowledge the possibility that a contract exists. But you have not convinced me that simply writing a check is what proves it. I could write a check made out to you today, then tear it up. That doesn't mean I owe you any money.
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It is required when agreed to by party's. As far as writing me a check: If you wrote me a check by accident thinking I was Kato that just mowed your lawn for $50.00 then you canceled payment because I was the Green Hornet who did not, your right you could legally rip up the check since there was no performance on my part.

If you wrote me a check for no reason at all, it would be difficult for me to make a case for the money you wrote the check for. The judge would want to know why you wrote me a check if I filed in either scenario.

However the posters case was no accident, the employer agreed cut a check for severance with the employee. Whether severance is required in employment law is completely irrelevant. What we are talking about here is what everyone else just calls CHEATING! Lawyers call what you just did the "nuh-uh" defense - -no logic, no authority, just don't want to agree.

I am not twisting your words around they speak for them self.
 
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