(Adams v. Thinkific Labs Inc., 2024 BCSC 1129)

Adams is a reminder by the B.C. Supreme Court that when an employer adds to or varies the terms of an employee’s agreement, that fresh consideration will be required. That meaning, an employer cannot require an existing employee to accept changes to the terms of their employment, or sign a new employment contract, without providing them with some element of quid pro quo (i.e. give and take, usually in the form of some sort of new financial compensation or other benefit).

In Adams, a prospective employee received an offer of employment from their employer. This original offer was silent on any terms relating to termination or non-competition. The employee accepted the original offer the next day.

Not long after the employee accepted the original offer from the employer, the employer sent the employee a secondary document that included various new terms including terms relating to termination and non-competition. The employee also signed this secondary document and returned it to the employer.

The employee then started work for their employer and did so for just over a year and a half until their employment was terminated without cause.

The employee sued for wrongful termination on the basis that the original offer of employment was the only enforceable agreement between the parties, and that the secondary document sent to her after she had accepted the original offer was unenforceable. She took this position on the basis that she was not provided with fresh consideration (again, some element of give and take) when being asked to agree to terms that significantly altered her original agreement.

She was ultimately successful in her position. The Court agreed that she was wrongfully dismissed, the secondary document that she signed was deemed unenforceable, and she was awarded five months of pay in lieu of reasonable notice determined by common law principles.

All of this to say, employers should be mindful that asking an existing employee to vary the terms of their contract, agree to additional terms, or sign a new contract without providing fresh consideration may render the entire secondary agreement unenforceable. Employees too should know their rights when being asked to sign an agreement detailing the terms of their employment after they have (1) already signed an employment offer/agreement; or (2) already worked at their place of employment for any period of time.

Written by C.J. Galozo, Employment and Civil Litigation Lawyer.