Grouse v. Group Health Plan, Inc.

Brief Fact Summary. The Plaintiff, Grouse (Plaintiff), accepted Defendant, Group Health Plans’s (Defendant) job offer and then quit his current job. Defendant rescinded the offer and Plaintiff had difficulty finding a comparable job.

Synopsis of Rule of Law. An illusory promise can still be enforceable where the promisor should reasonably expect to induce action on the part of the promisee and which does induce such action if injustice can be avoided only be enforcement of the promise.

Facts. Plaintiff was a pharmacist employed by Richter Drug.  Plaintiff interviewed with two employees at the Defendant Corporation and was offered a job. As a result of this job offer, Plaintiff quit his current job and turned down another job offer with Veteran’s Administration Hospital.  After the offer, Defendant’s manager requested references from the Plaintiff.  This was the Defendant’s policy before anyone is hired.  The Defendant was unable to retrieve a reference supplied by the Plaintiff and the Defendant’s manager hired someone else for the position.  When Plaintiff was ready to start work, he learned the job is no longer available and he could not find comparable work elsewhere.

Issue. Does the Plaintiff have a promissory estoppel cause of action?

Held. Yes.  Reversed.
•    Here, there is no contract.  Neither party is bound due to the bilateral power of termination.  Thus, the promises are therefore illusory.
•    Plaintiff needs to be given “a good faith opportunity to perform his duties to the satisfaction of respondent once he was on the job.”  This is not meant to imply, however, that the employer will be liable whenever he discharges an employee.
•    The Defendant knew the Plaintiff would have to resign from his current job in order to accept their offer.  Therefore, it would be unjust to allow the Defendant to avoid there promise.

Discussion. The court does not imply that an employer will be liable whenever he discharges an employee, but one has a right to assume they will be given the chance to perform their duties to the satisfaction of the employer.  The line is not clear as to when an employee’s rights are being cut off by the employer.