For decades, U.S. employment lawyers have stressed the need for employers to inject into employee handbooks and elsewhere that “your employment is at-will, terminable at any time, with or without notice.” This magic language, coupled with the legal presumption that an employment relationship is at-will unless otherwise stated, has generally been sufficient to overcome any argument from a terminated employee that s/he was anything more than at-will.
According to a recent Illinois appellate case, even the most ironclad at-will proclamations may be insufficient when an employer makes a promise to an employee outside the scope of the actual employment agreement. Take a deep breath, and then read on.
The facts of Janda v. U.S. Cellular Corp. are not unusual. A new boss came into town, shook things up, and his subordinates were none too pleased. To boost morale, the employer held a focus group meeting for the plaintiff and other employees. The employer encouraged employees to be candid, promised to keep their comments confidential, and assured them of no retaliation for anything said at the meeting. Candid they were. Out came brutal honesty, largely centered on bashing the new boss.
The boss later confronted the plaintiff about the “nasty things” said about him at the meeting, apparently leaked to him by another focus group participant. The boss then fired the plaintiff and the other focus group participants, except the alleged informant.
The discharged plaintiff filed suit for breach of contract and promissory estoppel, seeking to hold his employer to its promises and assurances that his comments would be kept in confidence and without repercussions. For promissory estoppel, a plaintiff must prove (1) the defendant made an unambiguous promise to the plaintiff; (2) the plaintiff relied upon the promise; (3) the reliance was expected and foreseeable by the defendant; and (4) the plaintiff relied on the promise to his or her detriment.
The trial court rejected both claims. On appeal, the state appellate court affirmed the trial court’s denial of the breach of contract claim, based on existing at-will language in the governing employment documents, but reversed dismissal of the promissory estoppel claim. According to the appellate court, the basis for the promissory estoppel claim were the employer’s promises of confidentiality and no retaliation to encourage openness and honesty at the focus group meeting. Because the plaintiff had relied on those promises and “spilled his guts” to his detriment, his claim for promissory estoppel had validity. In the court’s judgment, a promissory estoppel claim was completely separate from and unaffected by the “at will” pronouncements.
The lesson to be learned? Be sure before you assure, because a court and jury are likely to make you live up to your promises.
The abundant benefits of focus groups obviously can be and often are crucial to an employer’s success and even survival, especially when competing globally. But it comes with a price. To encourage openness and honesty, any employer must make a Las Vegas like promise: “What happens here stays here.” And then, of course, make sure to keep it.
Speak with your Reed Smith employment attorney—or another experienced employment lawyer—about best practices and how to protect your company from irreparable loss of credibility, unnecessary court costs and liability while maintaining and improving a workplace that will encourage and motivate your employees to invest in, and feel invested in by, your company.