Taxing Matters
Overtaxed Member
It may not be lawsuit worthy but does it make the severance agreement null and void?
In general a contract is void or voidable if the contract was the result of either duress or fraud. Duress means that the employer used some illegal force or threat of force to induce you to enter into the agreement. For example, if a supervisor put a gun to your head and told you to sign or he'd shoot you, that's duress. Fraud is making a materially false statement of fact to induce you to give up something of value or act against your interests. Material means that the statement is one that would have an impact on your decision whether to enter into the deal. If the employer told you that you were going to be laid off anyway and that fact was important to your decision to enter into it then the employer likely committed fraud if the employer knew at the time the statement was made that you were not going to be laid off. Of course, you would have the burden to prove the fraud and thus prove that the employer knew it was not going to do the lay off, and the standard for proving fraud is often higher than proving most other civil claims — clear and convincing evidence rather than preponderance of the evidence.