Act Fast, This Is A Limited Time Offer

by Anthony Gabor on November 4, 2011

That’s what Karl Bjorkman (“Bjorkman”) probably learned the hard way on October 31, 2011, when the Minnesota Court of Appeals issued its opinion affirming the district court’s dismissal of his breach of contract and promissory estoppel claims against his former employer, Arctic Cat, Inc. (“Arctic”).

Bjorkman worked for Arctic at its Thief River Falls, MN facility from July 1991 until he resigned in 2009.  At the time of his resignation, Bjorkman was an International Sales Manager.  In May 2007, Arctic announced it was moving several managerial positions to Plymouth, MN, that fall.  The move was delayed, and in July 2008, Bjorkman met with Arctic’s CEO and its Vice President of Human Resources to discuss his options related to the upcoming move.  Bjorkman was orally given three options:

(1) move to Plymouth and receive a $10,000 increase in salary;

(2) look for a different position at the Thief River Falls facility; or

(3) resign and receive a severance package equivalent to one-week’s pay for every year of service.

Bjorkman (smartly) asked that the offers be put in writing.  Arctic did so in a letter dated July 30, 2008.  This letter also asked that Bjorkman respond by August 8, 2008 (you know where this is headed, right?).

Bjorkman waited until August 8, 2008 (the deadline to respond) to send a letter to the CEO and VP of Human Resources stating that his research indicated Arctic’s salary offer was lower than other companies paid for similar jobs in the Twin Cities metro area.  Bjorkman asked Arctic to reconsider the salary offer.  In response, Arctic asked if Bjorkman was accepting any of the offers and requested that he respond “ASAP.”  Instead, Bjorkman said that he was asking Arctic to review the compensation package it offered him.  On August 12, 2008, Arctic told him that it would not be increasing its offer and again asked for a response “ASAP.”  Bjorkman did not accept any of the offers at that time.

Thereafter, Bjorkman and Arctic’s CEO met again on January 8, 2009 (four months later).  At this meeting, Arctic’s CEO orally gave Bjorkman two options:

(1) move to Plymouth and receive a salary of $90,000; or

(2) stay in Thief River Falls and continue working in his present position and salary.

The resignation option was not mentioned at this meeting.  On January 9, 2009, Bjorkman met with Arctic’s human resources manager to talk about how to “get the most bang for his buck” if he resigned.  Arctic’s human resources manager told Bjorkman that he was probably not eligible for severance.  Bjorkman was told to speak with Arctic’s VP of Human Resources about any severance option he was given the previous July.  He did not do so, but instead, tendered his resignation letter on January 12, 2009, and stated that he would take the severance package.  Arctic’s VP of Human Resources then told him that no severance option was available to him.  Bjorkman thereafter sued Arctic for breach of contract and promissory estoppel.

After a bench trial, the district court dismissed Bjorkman’s claims because it found that the offer for severance had been revoked or lapsed before Bjorkman accepted it.

The Minnesota Court of Appeals held that, “an offer to make a contract may be revoked by words or conduct inconsistent with the offer at any time before the offer is accepted.”  Feges v. Perkins Restaurants, Inc., 483 N.W.2d 701, 708 (Minn. 1992).  Arctic argued, and the district court agreed, that allowing Bjorkman to continue his position as international sales manager without relocating to Plymouth (conduct) and the oral offer by Arctic’s CEO at the January 8, 2009 meeting that Bjorkman could continue his position without locating to Plymouth (words) were inconsistent with the offer of severance.  Specifically, the district court found that the options offered at the January 8, 2009 meeting modified the original offer and revoked the offer of a severance package.

The district court also agreed with Arctic’s argument that its offer of severance had lapsed prior to Bjorkman’s acceptance.  “It is well-settled law in Minnesota that unless an offer provides a date at which the offer expires or the offeror revokes the offer, the offer remains open for a ‘reasonable amount of time.’”  Riley Bros. Constr., Inc. v. Shuck, 704 N.W.2d 197, 202 (Minn. Ct. App. 2005).  The district court found, and the court of appeals agreed, that Arctic’s request in August 2008 that Bjorkman respond to its original offer “ASAP” made it unreasonable for Bjorkman to expect the offer to remain open until January 2009.

What is a “reasonable amount of time” will vary from case to case based on the specific facts involved, but obviously in this case the court found that “ASAP” means you cannot wait four months to make a decision.

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