734-359-7018
Now Accepting New Clients!
Blog

BUSINESS LAW 1: The tender back rule and release claims.

In this case, plaintiff worked for LLC as the head of sales and marketing. Defendant was the owner, chief executive officer, and chairman of the board of directors, while defendant J became chief operating officer and president of the company during plaintiff’s employment. Plaintiff’s employment agreement with LLC made her eligible to receive severance pay upon termination, on the condition that, as part of any severance agreement, she release any and all claims she might have against LLC.

Plaintiff’s employment with LLC was terminated. She then negotiated a severance agreement with LLC that included a release of claims against the company and its current and former officers, directors, and board members. In exchange, LLC agreed to pay plaintiff six months’ salary. However, before all the payments were made, LLC filed for bankruptcy. After plaintiff made a claim for the unpaid amounts due under the severance agreement, the bankruptcy court granted LLC’s motion to reject the severance agreement based on LLC’s inability to pay. In total, plaintiff received $30,000 of $72,000 owed to her. Plaintiff nonetheless complied with the terms of the non-competition agreement.

Then, plaintiff filed suit against defendants, alleging sex discrimination and retaliation in violation of the Elliot-Larsen Civil Rights Act, MCL 37.2101 et seq., and disability discrimination in violation of the Persons with Disabilities Civil Rights Act, MCL 37.1101 et seq. Defendants filed a motion for summary disposition under MCR 2.116(C)(7), arguing that plaintiff’s claims were barred by prior release and that plaintiff would have to tender back all consideration she received under the severance agreement before her suit could continue. The trial court agreed and granted defendants’ motion, rejecting plaintiff’s assertion that the $30,000 she had received was primarily consideration for the non-competition agreement and holding that plaintiff was required to tender back any consideration before filing her claim.

Plaintiff argues that the trial court erred by finding that she was required to adhere to the tender back rule before filing suit against defendants.

The “tender back rule” requires that a party may not file a lawsuit asserting previously released claims or repudiate a release unless the party first repays all consideration received in exchange for the release.

In this case, Plaintiff argues that the tender back rule does not apply to her because defendants failed to cite any authority directly addressing the application of the tender back rule to a complex severance agreement or to situations in which the opposing party fails to pay the full consideration.

However, our Supreme Court held that a plaintiff must, in all cases where a legal claim is raised in contravention of an agreement, tender the consideration recited in the agreement prior to or simultaneously with the filing of the suit. Plaintiff’s lawsuit is undoubtedly a legal claim raised in contravention of an agreement, and our Supreme Court’s holding is binding.

If you are a business owner facing litigation, obtaining the right legal representation is essential.

From our law firm in Plymouth, Michigan, we represent business owners throughout Wayne County and the surrounding region who need help with:

  • Breach of contract litigation
  • Shareholder disputes
  • Partnership disputes
  • Ownership disputes
  • Membership disputes
  • Real estate litigation and lease negotiations
  • Employment litigation

As a small-business owner, you have enough on your plate without having to worry about complex litigation in today's litigious environment. Our attorneys can give you much-needed peace of mind while you focus on growing your company.

Contact Aldrich Legal Services

REAL ESTATE 18: If contract is silent as to time of performance, the law will presume a reasonable time.

The absence of an explicitly stated time for performance or payment does not render a contract invalid or unenforceable. One party’s substantial breach of a contract may relieve the other party of its obligation to perform under the contract. Substantial breach may be found in cases where the breach has effected such a change in essential operative elements of the contract that further performance by the other party is thereby rendered ineffective or impossible.

Why Does Crime Spike In The Summer?

Summer is here. While most people are dreaming about relaxing and taking a well-earned vacation, others are getting ready for their busiest time of year. According to a report by the US Department of Justice, the crime rate can increase more than...

REAL ESTATE 17: To sustain a breach of contract, plaintiff must show that the other party breached the contract, not that it will breach the contract.

Plaintiff failed to properly allege a cause of action for breach of contract, plaintiff’s claim for injunctive relief necessarily fails. An injunction is an equitable remedy rather than an independent cause of action. It is not the remedy that supports the cause of action, but rather the cause of action that supports a remedy. Thus, without a cause of action, injunctive relief is not warranted, and the trial court did not abuse its discretion in denying plaintiff further injunctive relief.

3 Estate Planning Mistakes to Avoid

Estate planning is no easy task. It can be a daunting, overwhelming and leave you with more questions than answers. Many people can benefit from having an estate plan and this article breaks down the top 3 mistakes to avoid when planning your...

FSBO: 3 Tips to Help Effectively Sell Your Home

Many homeowners are taking real estate matters into their own hands, especially when it comes to their own homes. Some of the most difficult tasks FSBO sellers encounter are selling their home at the right price, understanding paperwork and selling...

How Is Debt Split Up In A Divorce?

For some, debt is inevitable. Many individuals have some form of debt whether it’s credit card debt or student loans. You and your spouse may have accumulated debt over the years and this raises a huge question. How is debt split up in a...

What Are Some Post Legal Divorce Issues?

Once a divorce is finalized, there still may be a few legal issues that can happen after the divorce proceeding. It’s even possible that new issues can arise after the divorce. In either event, a divorce lawyer can help guide you through these...

For Sale by Owner: Do You Need an Attorney?

  For sale by owner (FSBO) homes can be a daunting task. However, if you want to do it correctly and smoothly, it’s best done with some assistance from a real estate lawyer. A real estate attorney has the knowledge and experience to...

Michigan Marijuana Statutes

In the state of Michigan, the possession of marijuana is illegal unless you have a medical condition that is debilitating. Below we discuss the marijuana statutes in Michigan. Medical Marijuana The Michigan Medical Marijuana Act states that...

Don't let a bad decision, unfair contract, or a messy divorce get in the way of a promising future!
Contact the experienced team at Aldrich Legal Services today to schedule your free initial
consultation
and secure reliable and trustworthy representation today!
Get the Help You Need From a Team You Can Truly Count On: (734) 404-3000
734-237-6482
734-366-4405