Conn. Supreme Court case shows need for employment-contract precision

A case handed down by the Supreme Court of Connecticut on Feb. 11, 2014, teaches a lesson about the importance of drafting clear and unambiguous employment contracts. If you are a Connecticut business owner, be sure to engage knowledgeable and experienced legal counsel to execute enforceable employment agreements on your behalf so that your employees clearly understand what they are agreeing to and to avoid the potential expense of fighting about it in court.

The Connecticut Supreme Court case

Norma Cruz and her former employer, Visual Perceptions, LLC, ended up in litigation because they disagreed about what a provision meant in a “letter agreement” between them. At issue was the phrase: “[t]his will cover the [36] month period starting April 1, 2007, and ending March 31, 2010.”

The employee claimed that this was a three-year employment contract, which the employer violated by letting her go sooner without good cause. On the other side, the employer believed that Cruz was an at-will employee, meaning that she could be terminated at any time for any legal reason or for no reason, and that the time period set out was only to signify how long the terms of employment in the letter agreement (like schedule, salary and benefits provisions) were to remain in effect if she remained in Visual Perceptions’ employment.

The trial court and appellate court agreed with the employee that the document was an employment contract for a definite term of three years. The Supreme Court, however, disagreed, finding instead that the contract term was “ambiguous on its face,” reasonably subject to either party’s interpretation.

Ambiguity in Connecticut contracts

Connecticut contract law provides that if a contract is “plain and unambiguous,” clearly enunciating the terms and expressing the party’s intentions, the court can interpret its provisions based solely on the contract language itself. However, if the agreement is ambiguous and subject to multiple reasonable meanings, additional, outside evidence should be considered to allow a factual determination of the party’s intentions. Such evidence could include witness’ testimony or other written documents.

Accordingly, the Supreme Court sent Cruz v. Visual Perceptions, LLC, back to the trial court for the consideration of additional evidence of the party’s intentions. The opinion also directed the trial court to use the rule of “contra proferentum” only as a “tie breaker” of “last resort” if the new evidence does not clarify the party’s intentions. This rule would require a finding against the party who drafted the contract, in this case the employer.

Connecticut employers need legal guidance

If you are a Connecticut business owner who hires employees to help you run your operations, it is important to see that your employment contracts are crystal clear as to your intentions. Not only will sound agreements make your employer-employee relationships cleaner and smoother, but also you are much less likely to end up spending money in court disputing the meaning of contract terms.

To draft smart, sound employment contracts, retain a skilled Connecticut business law attorney to help you carry out your employment intentions and for legal advice in all matters of employment law. If necessary, a commercial litigation lawyer can protect your interests in court.

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