raises promised in offer letter not given

Question

So I got an interesting offer from a company back in 2015 that I accepted. According to the offer letter I was to get raises every six months. Quoting it,

If you choose to make a five year commitment to our organization, we can offer you semi-annual raises starting in December of 2015 which will be as follows:

• $80,000.00 December 2015,
• $85,000.00 June 2016,
• $90,000.00 December 2016,
• $95,000.00 June 2017,
• $100,000.00 December 2017,
• $105,000.00 June 2018,
• $115,000.00 December 2018,
• $120,000.00 June 2019.

The CEO that made that offer letter has since left but I'm still there. The old CEO was employed by the owner but the new CEO actually is the owner. He just decided that he needed to run things himself so he let the old CEO go.

With the old CEO the raises were automatic but with this new CEO, the accounting department wanted to get his permission before bumping my pay. It's my understanding they emailed him and never got a response. I emailed the CEO as well and never got a response.

He's been in the office a few times but the past few times he's been in the office he's been quite angry. He's let other people go since taking charge, demoted others, and has said such things, in emails, as "anyone who wastes everyones time this year making things take forever and be more complex and disorganized will be replaced". With his attitude I've been reluctant to actually talk to him about it in-person, but, none-the-less, my offer letter says what it says and I'm a little pissed off that the raise that was promised to me was not given.

I realize that leaving and taking another job is an option but the concern I have is that if I leave I'll take a pay cut. No other job will pay as well as this one currently does. But, if I stay, I'm just setting myself up for abuse since I've basically accepted that the promises made to me in the offer letter are null and void.

In my mind, if the offer letter is null and void, I ought to be presented with a new "offer letter", as such, so that I might know what I can expect from this new CEO, but that hasn't happened either.

My question is this: what is the best way to approach the CEO on this matter?

Answer 1

I would definitely take this further. IANAL, but ethically you've been promised significant salary increases that you're not getting, and that should not be dependant on if someone senior happens to move roles. There's two approaches I can see here - with a lawyer and without a lawyer. (I would recommend the "with a lawyer" approach first if possible.)

With a lawyer, you can get expert legal advice on whether this offer letter constitutes a legal contract that should result in your pay increasing on the schedule that you claim here. If so, then the lawyers can send the current CEO official correspondence claiming as such, and if that doesn't work, they take a legal route so you can claim the additional funds to which you're entitled.

Without a lawyer, you have to be prepared to confront him about this directly, give him a timescale for resolving the issue, and unfortunately be prepared to walk if he still refuses. Certainly start the conversation on a friendly note:

Hi Bob, I just wanted to talk through some overdue salary increases that I was promised in my original offer letter - accounts say they need your approval, would you be able to sign those off ASAP?

...but if he starts acting up, then you may need to be firm:

I'm afraid that my acceptance of this offer of employment was conditional on these salary increases, so I will have to insist that they happen on schedule.

I know you say if you move elsewhere you'll take a pay cut, but I would still at least seriously consider it rather than just blindly accept what amounts to a pay cut from what you were offered in real terms. If nothing else, the CEO refusing to honour it could well be seen as a potential sign of financial trouble, and from what you've described his attitude certainly stinks of a potential culture problem down the line. This doesn't mean you should just jump ship of course, but I'd certainly be weary of sticking around just because the job seems to pay a bit better for the time being.

Answer 2

Absent any other superseding document on this issue, the offer letter is binding. It would help tremendously if you can prove that you decided/signed for a "five year commitment". But if not, then clauses such as this are adjudged -under contract law- based on the parties' subsequent acts and conduct (it is unclear whether you ever received such raises under the former CEO).

Depending on the laws in your jurisdiction (aka state), you may want to file a complaint in your state's department of labor because: (1) your description indicates likelihood that the CEO would terminate you if you directly press him on the matter; (2) the existence of a meritorious complaint in the state agency makes it easier to prove that an eventual discharge was retaliatory (hence, contrary to public policy pertaining to at-will employment); and (3) that is a typical scenario where "exhaustion of administrative remedies" is required prior to filing a lawsuit; additional remedies might be prescribed in your contract, employee's handbook, or akin document.