The Unfulfilled Promise of Promissory Estoppel in the Employment Setting

Abstract:     
Although the theory of promissory estoppel enforces promises that induce reasonable detrimental reliance, this article reveals the theory's colossal failure in the non-union employment setting. This conclusion is based on an examination of all of the reported decisions in the United States that discussed promissory estoppel over a two-year period in the mid 1990's. During this period, employees won only 4.23 percent of employment promissory estoppel cases decided on the merits. At first blush, this is very surprising because employers, through their communications, seek to create the expectation of a stable, secure work environment and employees, because of their lack of job security and material and psychological investments in their jobs, often rely on these messages.

The article sets forth and explains several reasons for the failure of promissory estoppel in employment cases. First, many employees' promissory estoppel claims appear to constitute secondary theories tacked on to lawsuits that focus on other theories. Second, in the 1990's, employees (and their lawyers) have failed to detect an increasing judicial preference for written contracts as the principal basis for promise enforcement. Third, compounding the effect of this shift in judicial strategy, courts appear especially reluctant to grant employee promissory estoppel claims in the shadow of the at-will employment rule. As a result of the latter two factors, courts may have been too quick to dismiss a substantial number of meritorious promissory estoppel claims. Promissory estoppel therefore has failed to fulfill its promise to afford non-union employees greater legal protection in the workplace.

JEL Classifications: J53

Working Paper Series