Goff-Hamel v. Obstetricians & Gynecologists, P.C.
588 N.W.2d 798, 256 Neb. 19, 583 N.W.2d 798 (1999)
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Rule of Law:
The doctrine of promissory estoppel may be asserted as a basis for a cause of action for damages an individual sustains from resigning their prior at-will employment in detrimental reliance on a prospective employer's promise of new at-will employment, even when the employer revokes the offer before the employment begins.
Facts:
- Julie Goff-Hamel was employed by Hastings Family Planning for 11 years.
- In June 1993, Dr. George Adam, a part owner of Obstetricians & Gynecologists, P.C. (Obstetricians), approached Goff-Hamel about working for the clinic.
- On July 27, 1993, representatives of Obstetricians offered Goff-Hamel a full-time position with specific terms regarding salary, vacation, and other benefits, which she accepted.
- Goff-Hamel and Obstetricians agreed that her employment would begin on October 4, 1993, to allow her time to complete projects at her current job.
- In August 1993, Goff-Hamel gave notice to Hastings Family Planning, resigning from her position in reliance on the offer from Obstetricians.
- Subsequently, Obstetricians provided Goff-Hamel with work uniforms and a schedule for her first week.
- On October 3, 1993, the day before she was scheduled to start, a representative from Obstetricians informed Goff-Hamel not to report to work because the wife of another part owner opposed her hiring.
Procedural Posture:
- Julie Goff-Hamel filed an action against Obstetricians & Gynecologists, P.C. in a Nebraska trial court, alleging breach of an oral employment contract and, alternatively, promissory estoppel.
- Both parties moved for summary judgment in the trial court.
- The trial court granted summary judgment in favor of Obstetricians, dismissing Goff-Hamel's claims as a matter of law.
- Goff-Hamel (appellant) appealed the trial court's ruling to the Nebraska Supreme Court.
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Issue:
Does the doctrine of promissory estoppel permit a cause of action for damages sustained by an individual who resigns from their at-will employment in reliance on a promise of new at-will employment, when the prospective employer revokes the job offer before the individual begins work?
Opinions:
Majority - Wright, J.
Yes, the doctrine of promissory estoppel permits such a cause of action. A prospective employee who resigns from a job in reasonable and foreseeable reliance on an offer of at-will employment can recover damages if that offer is rescinded before the employment commences. While a breach of contract claim fails because the employment was at-will, promissory estoppel provides a remedy to avoid injustice. The court sided with jurisdictions holding that when a prospective employer knows a promise of employment will induce an employee to leave a current job, it is liable for the reliant's damages. The harm is not the loss of the new job, but the loss incurred by quitting the old one. The employer broke its promise to give the employee a good faith opportunity to perform, and justice requires compensating the employee for the detrimental action taken in reliance on that promise. Damages are limited to reliance damages, such as lost wages from the former employment, not expectation damages from the unfulfilled new job.
Dissenting - Stephan, J.
No, the doctrine of promissory estoppel should not apply to a rescinded offer of at-will employment. This decision creates an illogical anomaly where a prospective employee who never starts work has greater legal protection than an employee who is fired on their first day, as the latter has no recourse under Nebraska's established at-will employment doctrine. The majority's reliance on a 'good faith opportunity to perform' is inconsistent with the principle that an at-will employer can discharge an employee 'whenever and for whatever cause it chooses.' Reliance on a promise of at-will employment is inherently unreasonable because the promise can be terminated at any moment. Bending the established law of at-will employment to avoid a harsh result in a specific case creates an inconsistent and unworkable legal standard that undermines traditional contract principles.
Analysis:
This decision carves out a significant exception to the traditional, harsh application of the employment at-will doctrine in Nebraska. It establishes that while an employer can terminate an at-will employee without cause after they start, they cannot revoke the initial offer of employment with impunity if a prospective employee has already relied on that offer to their detriment (e.g., by quitting another job). The case differentiates the promise of an opportunity to work from the promise of continued employment, providing a remedy for detrimental reliance on the former even when the latter is not guaranteed. This holding aligns Nebraska with a number of jurisdictions that use promissory estoppel to mitigate the inequitable outcomes that can arise from a strict application of the at-will rule.
