Blinn v. Beatrice Community Hospital and Health Center, Inc.
Facts
Blinn was 67 when he accepted a job offer from Beatrice Community Hospital, believing that the offer was for a position that he could keep until he retired. He approached Beatrice’s administrator seeking assurances about the permanency of his position. Blinn drafted a resignation letter to submit unless he was assured that his position was secure. Both the administrator and chairman of the board assured him that there was at least five years of work to be done and that Beatrice wanted him to stay until his retirement.
Blinn was asked to resign less than six months later. He brought suit claiming that while he was hired as an at-will employee, his at-will employment status had been modified inducing him to forgo another employment opportunity. Blinn sued on an oral contract and promissory estoppel.
Beatrice filed a motion for summary judgment. The district court held that the oral modification was not definite or specific enough to modify his at-will employment status and granted the motion. The Court of Appeals reversed, holding that the evidence created a genuine issue of material fact about whether Beatrice offered to extend Blinn’s employment until he chose to retire. Beatrice appealed.
Issues
- Must a ‘promise’ for purposes of promissory estoppel meet the same requirements as a ‘promise’ for purposes of contract formation?
- Is promissory estoppel applicable to at-will employment contracts?
Holding and Rule of Law
- No. A “promise” for promissory estoppel purposes need not necessarily meet the same requirements as a promise for contract formation purposes.
- Yes. Promissory estoppel applies to at-will employment contracts.
There is no requirement of definiteness in an action based upon promissory estoppel.
Oral representations may, standing alone, constitute a promise sufficient to create contractual terms which can modify the at-will status of an employee. The plaintiff has the burden of proving the existence of an employment contract and all the facts essential to the cause of action.
Whether a proposal is meant to be a unilateral offer is determined by the outward manifestations of the parties, not by their subjective intentions. There must be a meeting of the minds or a binding mutual understanding between the parties to the contract. An employee’s subjective understanding of job security is insufficient to establish an implied contract of employment to that effect.
The record here does not establish sufficient evidence to conclude that the defendant intended to offer a contract of employment on terms other than employment at will. The Court of Appeals erred in concluding that there was a genuine issue of material fact on the breach of contract claim. Promissory estoppel is based upon the principle that injustice can be avoided only by enforcement of a promise. Under the doctrine of promissory estoppel, a promise which the promissor should reasonably expect to induce action or forbearance is binding if injustice can be avoided only by enforcement of the promise.
We do not require that the promise giving rise to the cause of action must meet the requirements of an offer that would ripen into a contract if accepted by the promisee. Promissory estoppel requires only that reliance be reasonable and foreseeable. We agree that there is a genuine issue of material fact with respect to Blinn’s promissory estoppel claim. The statements made were insufficiently definite to offer a contract of employment on terms other than employment at will, but there is a genuine issue of material fact as to whether Blinn was promised terms of employment that could reasonably have been expected to induce him to forgo a job opportunity in Kansas of which he had informed Beatrice.
Under the Restatement view, a ‘promise’ for purposes of promissory estoppel must meet the same requirements as a ‘promise’ for purposes of contract formation. Nebraska has rejected that view. There is no requirement of ‘definiteness’ in an action based upon promissory estoppel.
The difference between contract and promissory estoppel, then, is that a contract requires that the promissor intend to make a binding promise–a binding mutual understanding or ‘meeting of the minds’–while promissory estoppel requires only that the promisee’s reliance on the promise be reasonable and foreseeable, even if the promissor did not intend to be bound. A promissor need not intend a promise to be binding in order to foresee that a promisee may reasonably rely on it.
Disposition
Remanded for retrial.