One of the more difficult cases that a wrongful
termination attorney may encounter is one where there was no discrimination, no
retaliation, and no employment contract. In fact, at first glance, it may seem
that there would be no possible way that such an employee would have any basis
to claim they were wrongfully terminated. In most cases, that will be true.
However if the fired employee was an executive, high level manager, or a
talented professional, there is a good possibility that she was enticed to
leave her former employment with promises of compensation, benefits and other
perks. If such an employee is fired shortly after taking the position, and
there is no indication of illegal discrimination or retaliation on the part of
the employer, what can be done?
An Employer Cannot Make Promises If It Doesnt Intend to Keep Them
The answer may lie in a principle learned by most lawyers in their first
semester of law school promissory estoppel. Arizona courts have used both
scholarly legal terminology and everyday language to explain this principle. For
example, the Court of Appeals explained:
has adopted the Restatement of Contracts § 90, which states: A promise which
the promisor should reasonably expect to induce action or forbearance of a
definite and substantial character on the part of the promisee and which does
induce such action or forbearance is binding if injustice can be avoided only
by enforcement of the promise.
One of the most straightforward explanations of
promissory estoppel comes from the Arizona Supreme Court which stated,
"Estoppel is to be applied when it would be unconscionable to permit a
person to maintain a position inconsistent with one in which he has
The Law Requires People to Honor
To put it in simpler terms, this simply means that
if someone makes a promise, and the person he made the promise to believes him
and acts on it, then the first person isnt allowed to back out on that promise.
For example, imagine that a car dealer tells a buyer, If you can come up with
the cash, Ill sell this car to you for $20,000.00, but if you have to finance
it, it will cost $30,000.00. The person then sells her home in order to raise
the $20,000.00 cash. The principle of promissory estoppel means that the car
dealer is not allowed to back out of the deal at that point, because the buyer
has already relied on that promise in deciding to sell her home.
Heavily Recruited Employees Should Not Be Fired Until The Promises Made
To Them to Convince Them To Take The Job Have Been Fulfilled.
In the employment law context, it is almost certain that the only way an employer
would be able to lure an in-demand, high-level employee (such as a programmer,
financial analyst, or program manager) away from her prior position is by
making promises about such things as salary level, vacation days, stock options,
or how long the job will last. Sometimes these promises are explicit, but other
times the promises are implied. For example, if a tech startup hires a software
engineer, and promises as part of the compensation package that he will receive
stock options which will vest after one year, then it is implied that he will
be employed for at least one year. Otherwise, the promise of stock options is
meaningless. If he was induced to leave a lucrative prior position, or to move
to another state to accept the position, or to take any other substantive act
in reliance on those promises, then to paraphrase the wording used by the
Supreme Court, it would be unconscionable to allow the employer to simply
change its mind, fire the employee after a few days or weeks or months, and not
allow him to receive the promised benefits which induced him to take the job in
the first place.
Employers Must Keep Their
Promises Because It Would Be Unfair Not To
In the end, promissory estoppel is a principle
of fairness. It prevents the employer from simply deciding to say whatever it
wants and make whatever promises it feels are necessary to convince the
employee to take the new job, and then leave them high and dry when it suits
them. If the employee has acted in
reliance on those promises, then the employer must honor them, and being in an
at-will employment state does not relieve the employer of this duty.
Rex A. Christensen
practices employment discrimination law in Gilbert, Arizona.
He can be reached at
This article does not constitute, and should not be considered, legal
advice, and you should consult with an attorney regarding your own specific
legal matters. The existence of this article or your reading of it does not
create an attorney-client relationship. Neither the Christensen Law Firm nor
any of its attorneys may represent you without first establishing that doing so
will not create a conflict of interest.
Rex A. Christensen is licensed to practice law in Arizona only.