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Carl Kanowsky: Employees moving could cost you

Posted: June 11, 2014 2:00 a.m.
Updated: June 11, 2014 2:00 a.m.

Jim, president of the top local IT company, came by the other day. He was not happy. He’d just been served with a complaint, alleging that he’d breached a new employee’s contract, had wrongfully terminated her, and was guilty of breach of promissory estoppel (whatever that is?).

He gave me the back story. He’d heard great things about Irma, a whiz bang website genius. She was unhappy with her current job, wanted more money, and was willing to move. She lived in San Diego, so a commute to Santa Clarita was not feasible.

So, Jim satisfied all of those issues. He offered her a job at more money but no moving expenses.

Based on that, Irma put her home up for sale, quit her former job, made an offer on a home in Santa Clarita, and put all of her stuff in storage, pending the move.

However, this was before Jim had introduced Irma to folks at his office that would be part of her staff once she started. It was clear it was an oil and water mix. Jim could see that even if Irma had all of the technical skills, he was going to be spending more time than he wanted on personnel issues because of her inability to get along with others.

He figured that since employment was at will and he’d not promised any specific length to her job at Jim’s company, he could withdraw the offer without incurring any liability.

I was going to have to deliver the bad news.

Jim was going to discover that he was in the same trouble that has hit both public and private employers.

In fact, just recently the State of California was hit with a similar lawsuit. It seems that it had offered Joseph Piccinini the position of deputy chief in the California Emergency Management Agency without confirming that there was money for the job, which it turned out there was not.

Unfortunately for both Joseph and the State, they did not discover this minor point until the day before he was to start. He’d already signed a two-year lease. He wanted some compensation for making a move based on the State’s promises.

The State said it was immune to such claims. The Court of Appeal ruled that Joseph had pled a cause of action for promissory estoppel, therefore his case could continue.
What is promissory estoppel?

The Court in 1991 in Shepard v. Morgan was facing a similar fact pattern, where an employee had made a move based on the promise of an employer.

That Court also found a basis for promissory estoppel and defined it thusly, “Further, the employer’s conduct here is governed by the doctrine of promissory estoppel, which provides: “A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.”

In other words, if you promise something to someone who acts on that promise, you have to pay the consequences if you don’t keep that promise.

So, before you make a promise to an employee, make sure you can live up to it.

Carl Kanowsky of Kanowsky & Associates is an attorney in the Santa Clarita Valley. He may be reached by email at Mr. Kanowsky’s column represents his own views, and not necessarily those of The Signal. Nothing contained herein shall be or is intended to be construed as providing legal advice.


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