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Employer can't wriggle out of the deal it signed

When the City of Alpena decided to fire its City Manager, the mayor and the departing manager discussed the issues by telephone.  The City Manager then mailed a letter of resignation to the City, accompanied by a "letter of understanding," setting forth his expectation regarding how the resignation would be handled.  The City wasn't satisfied with this document, however, so a new contract was signed that included a number of new terms, not least of which was a release of the manager's right to sue.  The new document also included a promise to pay unused sick days, but the City argued this was an error and pointed to the manager's "letter of understanding" to avoid paying these benefits.  When the manager sued to collect the unpaid sick days, the settlement contract was "reformed" and his claim was dismissed.

On appeal, the Court of Appeals over-turned the circuit judge's decision and authorized the former manager to pursue unpaid sick days.  The Court pointed out that the settlement agreement ultimately signed by the parties was materially different than the original document that reflected only the manager's understanding of the parties' intent; further, it expressly stated that it "constituted the entire agreement between the parties" and "fully supercedes any and all prior agreements." 

Give the unambiguous language incorporated into the final document, the court was left with no choice and the City had no right to change or re-interpret the terms.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
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