Toscano v. Greene Music
124 Cal. App. 4th 685, 22 I.E.R. Cas. (BNA) 21, 21 Cal.Rptr.3d 732 (2004)
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Rule of Law:
An individual who resigns from at-will employment in reliance on a promise of other employment may recover lost future wages they would have earned from their former employer under a promissory estoppel theory, provided the damages are not speculative and are proven with reasonable certainty.
Facts:
- Joseph Toscano was employed as a general manager at a Fields Pianos (Fields) store, but was unhappy with his job and decided to seek other employment.
- In June and July of 2001, Michael Greene, the president of Greene Music (Greene), held several conversations with Toscano, culminating in an offer for a sales management position at Greene to begin on September 1, 2001.
- In reliance on Greene's promise of employment, Toscano resigned from his position at Fields on August 1, 2001.
- In mid-August 2001, Greene withdrew its employment offer to Toscano.
- Following the withdrawal of the offer, Toscano found subsequent employment, but at jobs that paid substantially less than what he had earned at Fields.
Procedural Posture:
- Joseph Toscano sued Greene Music in the Orange County Superior Court (trial court) for claims including breach of contract and promissory estoppel.
- Upon Greene's successful motion, the case was transferred to the San Diego County Superior Court.
- The trial court granted summary adjudication in favor of Greene on all claims except promissory estoppel.
- The case proceeded to a bench trial on the sole claim of promissory estoppel.
- The trial court found for Toscano and awarded him $536,833 in damages, which included past and future lost earnings based on what he would have made at his former employer, Fields.
- Greene filed a motion for a new trial, arguing the damages were speculative and excessive, which the trial court denied.
- Greene (appellant) appealed the judgment to the California Court of Appeal, challenging the damage award.
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Issue:
Under the doctrine of promissory estoppel, may a plaintiff who resigned from an at-will employment position in reliance on a withdrawn job offer recover as reliance damages the future wages he would have earned from his former position?
Opinions:
Majority - O'Rourke, J.
Yes, a plaintiff who resigns from an at-will job in reliance on an unfulfilled promise of other employment may recover the lost wages he would have expected to earn from his former employer, but only if they are proven with reasonable certainty. Promissory estoppel is an equitable doctrine, granting courts broad discretion to fashion remedies that achieve justice. While damages should not place the promisee in a better position than performance of the promise would have, this does not bar the recovery of future earnings lost due to detrimental reliance. The at-will nature of the former employment is not a strict impediment, as a third party's interference with an at-will relationship is actionable. However, such damages must not be speculative, remote, or contingent. In this case, the evidence supporting Toscano's claim to future wages until retirement was too speculative, as it was based only on his expert's assumption that he would have remained at Fields, without any evidence that Fields intended to continue his employment for any specific duration. Therefore, while such damages are legally permissible in principle, they were not supported by substantial evidence in this specific instance.
Analysis:
This decision clarifies the scope of reliance damages available in promissory estoppel cases involving employment offers. It establishes a significant legal principle in California: lost future wages from a former at-will employer are recoverable as reliance damages, treating them as a lost opportunity cost. However, the court sets a high evidentiary standard, requiring proof of reasonable certainty that the former employment would have continued. This creates a practical barrier for plaintiffs, as demonstrating a former at-will employer's long-term intentions is difficult. The case reinforces the distinction between reliance damages (what was lost) and expectancy damages (what was promised), affirming that promissory estoppel aims to restore the plaintiff to the position they were in before the promise, not to give them the benefit of the unfulfilled bargain.
