Do I Have Any Recourse?

I applied for a position of employment, and went through an extensive multi-interview period of almost 3 months. I was given a written offer of employment, based on an acceptable background check, which I accepted. 2 weeks later my wife and I were invited out to dinner by the company heads, and told to submit my letter of resignation to my current employer – I was officially hired. I did so the following day, and notified the new employer of my availability date. The answered with sounds great. 2 days later, they emailed me stating that my employment was terminated due to background check. I had to go back and beg my current employer to pull my resignation. Now my administrator is treating me unfairly by refusing to honer his prior agreement of raise increase because he states, ‘I am just looking to leave anyway’. I was only trying to better mine and my family’s lives. The new job would have been double the pay, as well as free housing, utilities and vehicle. Do I have any recourse?

Asked on October 28, 2017 under Employment Labor Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You *may* have recourse, but be warned in advance that it is an uphill battle--i.e. winning is not guaranteed, and your odds are likely significantly worse than 50-50.
First, this answer assumes that while you had a written offer, you did not have an actual written employment contract which guaranteed you the job for a defined or set period of time (e.g. a one-year contract). If you did have such a contract, you could sue for what you would have gotten under it based on "breach of contract." But when there is no written contract guarantying you a job for a set or defined period, employment is "employment at will" and you could be terminated at any time--even before the job actually starts.
However, there is a doctrine, called "promissory estoppel," which can sometimes hold non-contractual promises enforceable. To use it requires ALL of the following:
1) You were made a promise (e.g. of a job with certain compensation & benefits) to get you to do something the other side wanted you to do (e.g. take the job and work for them);
2) In order to do what the other side wanted, you had to do something to your detriment (leave a current job);
3) The other side *knew* you'd have to do that detrimental thing (e.g. by telling you to submit your resignation letter, they clearly showed they knew you'd have to leave the existing job);
4) Even though they knew that you'd have to act to your detriment to do what they wanted, they still made you the promise;
5) It was reasonable for you to rely on the promise and act as they wanted (i.e. no caveats, warning signs, they were not hedging or hemming-and-hawing, etc.); and
6) You did in fact act to your detriment.
On paper, you meet the above criteria. But here are the challenges a lawsuit would face:
a) Again, employment is employment at will--the paradigm in this country is that without a contract, no job is guaranteed. Not only are courts often reluctant to overturn that and hold that you had a right to a job when there was no contract, but because employment is employment at will, a court could find that it was simply not reasonable to rely on a promise of employment unless you had an actual contract guarantying it--that is, you could fail item 5), above, because a court could feel that no one should ever rely on a noncontractual employment promise.
b) You got your job back, so your theoretical loss was not getting the previously promised raise. But if you did not have a contract for that raise, it was also not guaranteed--the current employer could have gone back on his word. So it may be very difficult to prove that you actually lost anything, and if you can't prove a loss, you are not entitled to compensation.


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