Typo in Severance Deal Nearly Costs Michigan Company $2.6M

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By Alex Ebert

Being laid off is never an enjoyable experience, but receiving 22 times your annual salary sure would lessen the sting.

The Michigan Court of Appeals dashed that possibility for a worker who argued that his employer’s mistake in a severance agreement shouldn’t count against him. The court sided with the employer, holding June 27 that a lower court was correct in reforming the contract to reach the intended severance amount, instead of every worker’s dream of a platinum parachute ( Francois El-Hayek v. Trico Products Corp. , Mich. Ct. App., No. 331283, unpublished 6/27/17 ).

Francois El-Hayek, the almost-lucky employee, was a manager at wiper-blade manufacturer Trico Products Corp. He was laid off in 2014 along with 12 other workers. But unlike them, El-Hayek’s severance deal accidentally provided him $80,806 a week for 34 weeks, instead of his expected amount totaling $80,806 over the same period.

“This case presents a cautionary tale to double and sometimes triple check legal documents,” Brian Schwartz, a principal at Detroit-based Miller Canfield Paddock and Stone P.L.C. told Bloomberg BNA in an email. Schwartz, who represented Trico in this case, said that although there is a high burden to correct a contract that contains a mistake, courts will change contracts where there is clear and convincing evidence of a slip-up.

“While plaintiff denied having any knowledge of defendant’s mistake, as the trial court held, the evidence demonstrated that plaintiff had been informed by defendant ‘on more than one occasion that severance pay meant continuation of his regular salary,’” the three-judge panel said. “Nevertheless, plaintiff remained silent about defendant’s mistake.”

Who could blame him?

El-Hayek was represented by Leif Anderson, a founding shareholder of Detroit-based Neuman Anderson Grieco McKenny P.C. Anderson couldn’t be reached for comment.

To contact the reporter on this story: Alex Ebert in Columbus, Ohio at aebert@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

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