VANEGAS V. AMERICAN ENERGY SERVICES
302 S.W.3d 299 (2009)
NATURE OF THE CASE: Vanegas (P) appealed the judgment of the Court of Appeals that affirmed summary judgment in favor of American (D) on a finding that an agreement to pay five percent of the proceeds of a sale or merger of the company to employees who were still employed at the time of the sale or merger was illusory and therefore not enforceable, and that it violated the statute of frauds.
FACTS: D hired Ps and in an operational meeting in June 1997, they voiced concerns about the continued viability of the company. Ps complained that the company required them to work long hours with antiquated equipment. D promised the employees, who were at-will and therefore free to leave the company at any time, that 'in the event of sale or merger of D, the original [eight] employees remaining with D at that time would get 5% of the value of any sale or merger of D.' D was acquired in 2001. Seven of the eight original employees were still with D at the time of the acquisition. Ps demanded their proceeds, and when the company refused to pay, Ps sued, claiming D breached the oral agreement. D moved for summary judgment on two grounds: that the agreement was illusory and therefore not enforceable, and that it violated the statute of frauds. Ps responded that the promise represented a unilateral contract, and by remaining employed for the stated period, the employees performed, thereby making the promise enforceable. The trial court granted D's motion for summary judgment, and Ps appealed. The court of appeals affirmed, holding that the alleged unilateral contract failed because it was not supported by at least one non-illusory promise. Ps appealed again.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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