Contracts are Enforceable

If you think you may change your mind about the terms in a proposed contract, don’t sign it. One farmer’s co-op apparently had a change of heart, which resulted in a $380,000 mistake.
In the recent case of Hensley vs. Cocke Farmer’s Cooperative, the employer, Cocke Farmer’s Cooperative, entered into a written agreement with a senior level employee, Jimmy Hensley, which was designed to induce him into ceasing his job search and retiring with the co-op. To provide him with incentive to sign, the co-op essentially guaranteed his salary and health insurance through 2024 – 14 years after signing the contract. Mr. Hensley was convinced. He quit job searching and signed on the dotted line, testifying at trial that he planned to retire with the co-op.
A mere 3 months later, the co-op had a change of heart and terminated Mr. Hensley. He sued for breach of contract. In Court, the co-op argued the contract – presumably drafted by the co-op – was vague, ambiguous, unenforceable, and lacked consideration. The Court didn’t buy it and found in favor of Mr. Hensley awarding him $380,000 in accrued benefits plus health insurance premiums through 2024.
Employment issues, as seen last week, are often intertwined with other legal and practical considerations. In this case, it appears that the lack of attention to all these issues led to this very costly financial and HR mistake.
Hensley v. Cocke Farmer’s Cooperative, No. E2014-01775-COA-R3-CV, (Tenn. Aug. 31, 2015).