Vonada v. Long

Vonada v. Long: Court Enforces Employee's Right of First Refusal

This case involved a dispute over an employment contract provision that gave an employee the right to purchase their employer's business before it could be sold to someone else. The employee, Vonada, had a "right of first refusal" clause in their agreement with Long. When Long tried to sell the business to a family member without offering Vonada the chance to buy it first, Vonada sued to stop the sale.

The lower court initially ruled against Vonada, but the appeals court reversed this decision. The appeals court found that there was a genuine mistake in the contract terms - but it was a one-sided mistake by the employer, not a mutual misunderstanding by both parties. The court determined that the right of first refusal was valid and enforceable, even when the proposed sale was to the employer's family member.

What This Means for Workers:
This ruling shows that courts will protect employees' contractual rights, even against family business sales. If you have a right of first refusal clause in your employment agreement, employers cannot simply ignore it by selling to relatives. Such provisions in your contract are legally binding and enforceable.