McGurn v. Bell Microproducts, Inc.
284 F.3d 86 (2002)
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Rule of Law:
Silence constitutes acceptance of a counteroffer where an offeree takes the benefit of offered services with a reasonable opportunity to reject them and has reason to know they were offered with the expectation of compensation under the modified terms. However, whether an offeree had 'reason to know' of a unilateral, unannounced alteration to a written offer is a question of fact that may preclude summary judgment.
Facts:
- Bell Microproducts, Inc. (Bell) and George R. McGurn negotiated an employment contract.
- Bell sent McGurn a final written offer dated July 3, 1997, which included a clause providing a severance package if he was terminated without cause within the first 12 months.
- Upon receiving the offer, McGurn crossed out the word 'twelve,' wrote 'twenty four' above it, and initialed the change.
- McGurn signed the altered document and returned it to Bell without explicitly notifying anyone at the company of the modification he had made.
- McGurn began working for Bell on July 8, 1997, and the altered letter was placed in his personnel file.
- Bell terminated McGurn's employment after approximately 13 months.
- Bell refused to pay the severance package, arguing that the original 12-month period for severance had expired.
Procedural Posture:
- George R. McGurn filed a breach of contract action against Bell Microproducts, Inc. in the Massachusetts Superior Court.
- Bell removed the case to the U.S. District Court for the District of Massachusetts on the basis of diversity of citizenship.
- The parties filed cross-motions for summary judgment.
- The district court granted McGurn's motion for summary judgment, finding that Bell's silence constituted acceptance of the counteroffer.
- Bell, as the appellant, filed a timely notice of appeal to the U.S. Court of Appeals for the First Circuit.
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Issue:
Can an employer's silence and acceptance of an employee's services be deemed acceptance of the employee's counteroffer as a matter of law, where the employee made a unilateral, unannounced alteration to the written employment agreement and there are disputed facts as to whether the employer knew or should have known of the alteration?
Opinions:
Majority - Lipez
No. The employer's silence does not constitute acceptance as a matter of law because genuine issues of material fact exist regarding whether the employer knew or should have known of the employee's counteroffer. While silence can operate as acceptance when an offeree takes the benefit of services with reason to know of the offeror's expectations, this determination is fact-specific. The general rule that a party is bound by what it signs is inapplicable here, as the alteration occurred after Bell signed the document. The relevant question is whether Bell had a duty to re-read the offer upon its return. Whether Bell had 'reason to know' of McGurn's alteration based on the change's prominence, the timing of its discovery, or the responsibilities of its HR department involves plausible but conflicting inferences that must be resolved by a factfinder at trial, not by a judge on summary judgment.
Dubitante - Selya
Yes. The employer's silence should be deemed acceptance of the counteroffer. Bell received the altered document, it became the basis for McGurn's employment, and it remained in the company's own files. An offeree who accepts the benefit of services while having reason to know from its own records that those services were tendered with a particular expectation should be bound by those terms. A party should not be able to insulate itself from contractual liability by professing ignorance induced by its own negligence or failure to read the very document that formed the basis of the employment relationship. Fundamental fairness dictates that silence in these circumstances operates as an acceptance.
Analysis:
This case clarifies the application of the 'acceptance by silence' doctrine to counteroffers made through unilateral document alteration. It distinguishes the pre-signing 'duty to read' from the post-signing context, establishing that there is no automatic duty to re-read a returned document for unannounced changes. The court's decision emphasizes that whether an offeree 'had reason to know' of such a change is a highly fact-intensive inquiry, making it difficult to resolve such contract formation disputes on summary judgment. This reinforces the principle that interpretive issues regarding contract formation based on words and conduct are typically questions for the jury.
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