Recent headlines have been dominated by the shakeup of NBC’s late night talk show lineup. As many of you are aware, Conan O’Brien took over the job of hosting "The Tonight Show" in May of 2009, replacing Jay Leno as host. To take that job, Conan and many of his staff uprooted their lives in New York and moved to California. However, NBC executives recently decided to reinstate Leno to his prior position while showing Conan the door. Conan is fortunate enough to have the benefit of a contract and whatever protections he and his legal team negotiated for him. Conan’s rights against his employer are thus defined by his contract. Most employer-employee relationships, however, are not governed by an employment contract.
For several years Illinois courts have been split on what rights a prospective employee who accepts a job offer may have if the offer is revoked or the employee is terminated shortly after acceptance. Several recent Illinois Appellate Court decisions have ruled that a jilted employee may not maintain a cause of action because Illinois employees are employees at-will, unless they are party to an employment contract. On the other hand, other Illinois Appellate Courts have ruled that an employer’s unfulfilled promise to an at-will employee can result in a liability for the employer under a legal theory called promissory estoppel.
Two recent Illinois cases highlight a prospective employee’s potential claims and the employer’s defenses. In Dumas v. Infinity Broadcasting Corp., an on-air radio personality, Cliff Dumas ("Dumas"), was the host of a number of successful country music radio programs in Canada and was being courted by Infinity Broadcasting Corp. ("Infinity") to host a program on its Chicago country music station, US-99. Dumas exchanged multiple phone calls and email messages with Infinity executives including one email from Infinity which stated, "[w]e are moving forward with our plans to bring you in."
Subsequently, Infinity sent another email requesting that Dumas provide it with a copy of a release from Dumas’ then employer before finalizing a written agreement. Dumas alleged that he resigned his position in reliance on the earlier promise that Infinity was moving forward with its plans to "bring him in" and presented his release to Infinity. In response, Infinity balked at signing Dumas and told him that it only meant for him to secure a conditional release to allow the parties to continue to negotiate.
Dumas filed suit against Infinity in federal court alleging that even if he and Infinity did not have an agreement, Infinity made a promise to hire him that he relied upon in resigning from his prior job. A federal appellate court, applying Illinois law, ruled that in order for Dumas to recover he must prove: 1) Infinity made an unambiguous promise to Dumas; 2) Dumas relied upon such promise; 3) Dumas’ reliance was expected and foreseeable by Infinity; and 4) Dumas’ reliance was to his detriment. In its defense, Infinity argued that its emails did not constitute an unambiguous promise to Dumas. The court agreed with Infinity and affirmed the judgment against Dumas. However, as we pointed out in our latest restrictive covenant article, the decisions of federal courts are not binding on Illinois state courts.
The dispute between the various districts of the Illinois Appellate Court was resolved in 2009 when the Illinois Supreme Court in Newton Tractor Sales, Inc. v. Kubota Tractor Corp. cited the Dumas case and held that a promise not arising to the level of a contract can be enforced if the plaintiff can prove all of the elements of promissory estoppel. The supreme court reasoned that a promise made without consideration may nonetheless be enforced to prevent injustice if the promisor should have reasonably expected the promisee to rely on the promise and if the promisee did actually rely on the promise to his or her detriment.
Illinois employers and employees should be careful in the offering and accepting of job offers, especially when such offers require the employee to relocate. We often write about the importance of reducing an agreement to writing in order to avoid the anxiety and high costs of litigation. It is equally important to make sure that correspondence or other writings, such as e-mails, do not inadvertently create a liability by making unintended promises. If you have any questions about promissory estoppel or the enforcement of non-contractual promises, please contact a member of the firm.
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