Interoffice Memorandum
TO: Human Resources Manager
FROM: Ms. Halley Patel, Regional Vice President, Amertex Healthcare, Inc.
SUBJECT: Employment Agreement with Mr. Marshall Manager
I hope that your first week with Amertex Healthcare, Inc. has helped you get acclimated to the ins and outs of staffing our family of hospitals. Having the right people in the right positions is imperative for our goals of continuous improvement, and that starts with hospital leadership.
Tarrant Amertex Regional Hospital, one of our hospitals in the Fort Worth area, has been in need of a new Chief Executive Officer. Last week, we reached a “handshake” deal with Marshall Manager, an experienced vice president with Valley Hospital Corp. We think he is a great fit for the job, and I want for you to be engaged in all aspects of onboarding him with the company.
The informal terms of our deal with Mr. Manager are listed following this memo. My apologies for how rough and unpolished those are—rather embarrassing, really. These are just notes from the meeting that my assistant typed up. At any rate, I want you, as best you can, to convert those terms into a fully polished first draft contract. That means taking the informal notes of our agreement and “translating” them into the first draft of a professional, legally-binding contract.
By “first draft,” I do not mean that the document is rough or incomplete in any way. Far from it. Rather, you are preparing the first version of the document that will be reviewed by me and our outside employment law counsel. You should write it to be substantively complete such that, hopefully, the lawyer will have to spend very little time (and our money) on it, and we can quickly forward the document to Manager.
This first draft, however, is also a special “annotated” draft. Create the document with all the appropriate headings and provisions that you can prepare based on the information you have been provided. Because your draft will be forwarded to our outside counsel for additional review, I want you to add comments, questions, and sources to the draft. If there is any provision where you wish to explain your drafting choices either to me or to our lawyer, or if there is any additional information you think we should know before finalizing the contract, you should highlight those areas in your comments and questions. You should also use these notations to identify any source from which you have adapted “precedent” terms or contract language. Indeed, other contracts can be a good source for boilerplate language to use in your “general provisions” section. The annotations are also a good way for you to explain any ideas for additional substantive terms (outside of the term sheet provisions below) that you might want to put in the contract.
You may put these annotations in the document either as comment bubbles or as footnotes, whichever is more convenient for you. The comments and questions will, of course, be stripped out before we actually use the final version of this contract. That means you can (and should) be completely candid about what you are doing in your drafting process and why. For this first major project with our company, I’m very interested in understanding your thought processes, so please don’t skimp on the annotations. Showing your thought process means using your notes to explain important decisions such as why you organized the contract as you did, why you included the provisions and definitions that you did, etc.
Format: Use 12-point font size for the actual text of the contract. Be sure to number your pages and to number the substantive paragraphs of your contract. Make the document single-spaced, but with visible whitespace between each paragraph. Put your name at the very top of the first page. Other contracts that you have seen in this course may provide you some other useful formatting guidance. Again, don’t forget to explain why you are doing what you are doing (and to cite any sources for contract language) with those handy annotation bubbles or footnotes.
Thank you in advance for your help with this important matter.
General Term Sheet for the Deal
The contracting parties are Mr. Marshall Manager and Amertex Healthcare, Inc.
Marshall Manager will have the title of “Chief Executive Officer” for the “Tarrant Amertex Regional Hospital” with his employment set to begin on November 1, 2024. The agreement term will last until October 31, 2027.
Manager is currently employed as executive vice president for Valley Hospital Corp. under an Employment Agreement dated November 1, 2019, that purportedly ends on October 31, 2024. Manager has expressed to Amertex that entering into this new contract will not violate his Valley Hospital contract. Amertex has not seen the earlier contract (it apparently includes a confidentiality provision) and wants to have the legal right to sue Manager if Manager’s factual statement about his contract turns out to be false.
Amertex also wants indemnification from Manager if Amertex is held liable to Valley Hospital for “tortious interference” with Valley Hospital’s contract with Manager. Manager agreed to that, but doesn’t want the indemnity clause to create liability for him in any other situation.
Although this contract is for a term and does not create an employment-at-will relationship, Amertex wants the right to terminate Manager for “cause.” We haven’t fully fleshed-out what will count as “cause,” but it should be the sorts of things that would make a firing reasonable to most people. We probably need to come up with a list or a definition of some sort in the contract.
If he is terminated early, Manager should get his prorated salary up through the date of termination, plus reimbursement for any expenses that Manager has incurred through the date of termination. Amertex must make these payments to Manager by no later than three business days following termination.
Manager will be paid $40,000 per month, payable on the last business day of each month during the time of Manager’s employment.
Manager’s résumé indicates that he received his Bachelor of Science (B.S.) degree in biology from the University of Texas at Arlington in 2002, a Master of Public Health (M.P.H.) degree from Harvard University in 2014, and is set to finish a Master of Legal Studies (M.L.S.) degree from Texas A&M University (with a healthcare emphasis) in May 2025. (Say, isn’t that where you got your Master’s degree? Small world!) Amertex has been burned by “résumé fraud” in the past, so we want to be able to sue or terminate Manager if any of his credentials turn out to be fake. Amertex should also be able to get out of the contract if Manager does not receive his M.L.S. by May 30, 2025.
Manager’s responsibilities are that he will perform all duties that are customary for a Chief Executive Officer of a major hospital. Among other things, that means he must devote his attention and energies to the hospital on a full-time basis.
Manager wants us to hire Ms. Grace Goodwork to be his Executive Assistant by no later than 30 days after Manager begins his employment. Goodwork is in a similar position right now at Valley Medical. If we don’t hire Goodwork by the deadline, Manager has the right not to go forward with Amertex.
Manager also wants the right to not go forward with Amertex if our Development Office is unsuccessful in obtaining the $5,000,000 gift currently pledged by billionaire Phillip Anthropic. Manager wants out if we have not closed on funding the gift by February 28, 2025.
If Amertex terminates Manager’s employment “without good cause,” then Manager wants Amertex to pay him $50,000 in addition to the prorated salary and expenses described above.
Here are some key contact information for this contract:
Ms. Halley Patel will sign the agreement on behalf of Amertex Healthcare, Inc. d/b/a Tarrant Amertex Regional Hospital, 2691 Keystone Ave, Fort Worth, TX 76104. If it matters, Amertex is a Delaware Corporation with its principal place of business in Dallas, Texas.
Marshall Manager will sign the contract on his own behalf. His address is 1999 Century Rd, Colleyville, TX 76034.
We may need to consider some other provisions, but these should be enough to get us started. Feel free to add terms that you can justify as useful, so long as they do not contradict the deal points to which we have agreed.
Instructions from Professor Manigrasso.
Remember that you are preparing a polished document that will be read by others in your company. Although your draft will not necessarily be the final say, you should be sure it has all the content where it could be the final version once your commentary notes have been stripped out.
Follow These Document Formatting Requirements:
The font used in the contract must be 12-point in size and suitable for professional documents.
The margins must be at least one inch on all sides (top, bottom, left, and right) and otherwise look professional in its formatting.
You must number your pages in the lower right-hand footer of the document.
The document must be written in single-spaced paragraphs but also have space between each paragraph.
Your contract must include all eight parts of a typical professionally drafted business contract. See page 243 of Legal Literacy and Communication Skills for a list of these parts. Note that your requirements include factual recitals.
The contract should make accurate use of the contract concepts listed on page 266 of Legal Literacy and Communication Skills.
The contract should make appropriate use of indentation, whitespace, section titles, and paragraph numbering to create visual cues for your reader as to the content of the document. The document should appear professional at first glance.
The contract must be no more than eight pages in length. It can certainly be fewer pages. You must make sure that you cover all substance set out in the parties’ term sheet. You may not contradict any point on which the parties have agreed, though you can (and should) add other provisions that are useful but that are not in the parties’ term sheet.