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B. Petitioner’s Negotiations With Xircom
Before 1994, Xircom had occasionally offered jobs to
prospective employees (other than petitioner) and withdrawn those
offers before the employee began to work for Xircom. In 1994,
Xircom’s practice was to offer to prospective employees from whom
it had withdrawn employment offers replacement salary,
replacement medical insurance payments, and out-placement
services.2
On April 14, 1994, Xircom offered petitioner medical
insurance, out-placement services, and payments equal to 3 months
of his AT&T salary. Xircom intended the payments to replace the
compensation that petitioner would have earned in 3 months at
AT&T if Xircom had not made a job offer to him.
Petitioner made a counteroffer in which he asked for 9
months of the salary Xircom had promised him ($6,666.67 per
month) and a positive employment reference. On April 19, 1994,
Xircom agreed. Petitioner and Xircom signed a consulting
agreement effective as of April 18, 1994, which said that
petitioner was an independent contractor of Xircom. Xircom
agreed to pay petitioner $6,666.67 per month until January 31,
1995, and it gave petitioner a positive employment reference.
2 Out-placement services include assistance in career
planning and development of skills in areas such as resume
preparation and interviewing.
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