If your employer gives you a memo of understanding, do you have a case if it fails to follow through?

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If your employer gives you a memo of understanding, do you have a case if it fails to follow through?

I gave my notice to my employer back 5 months ago and they asked if I stayed through the end of this month they would transfer me; it gave me a memo of understanding. I agreed to this and accepted a purchase offer on my home with the anticipation of my transfer. Now, however, it is stating it may not be able to honor the memo. My family and I will have no home in a month because I based all of my personal decisions on what I was told and written. Can I do anything about this?

Asked on April 25, 2012 under Employment Labor Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Speak with an attorney--you likely have a legal cause of action or lawsuit if the employer does not honor the memorandum of understanding. There are two different grounds under which you may have a cause of action:

1) Breach of contract: a contract is formed when there is an offer, the offer is excepted, and there is an exchange of consideration, or things or promises of value. In this case, the employer offered you a transfer if you stayed on; you did stay one and thereby accepted the offer; and your consideration for that transfer was your continued work. Therefore, there is a good chance a valid and enforceable contract was formed in this case.

2) Promissory estoppel: if A promises B something to get B to do a certain thing, and A makes that promise knowing that B will (or will likely) do something to its detriment in reliance on that promise and B in fact does that thing, that "detrimental reliance" on A's promise can often "estop," or prevent, A from dishonoring or reneging on the promise. In this case, the employer offered you a transfer to get you to keep working for it; they did so knowing or reasonably knowing you'd have to put you home on the market. That may be enough to make the promise binding even if there were no contract.

You could potentially sue for the cost of renting a new place to live, for costs incurred in the move, for the costs associated with purchasing a new home (e.g. broker's fees, inspection, etc.), for some number of months of wages if you do move to the new location but don't have a job, etc.--the exact compenation you could seek will depend on the circumstances, and your attorney can guide you in this, as in taking action to enforce your rights. Good luck.


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