BUSINESS WATCH

Under a January 2006 decision of the Nebraska Supreme Court, if an employer assures an at-will employee of continued employment and the employee reasonably and foreseeably acts to his or her detriment in reliance on the assurance, the assurance can have legal consequences for the employer even if no enforceable contract was formed, the employer did not intend to make a contract and the employer did not intend to be legally bound by the assurance. 

The case involved an at-will employee of a Beatrice hospital [Blinn, the executive director of medical staff development] who had received a job offer from a Kansas hospital. According to Blinn’s claims, the Kansas offer was of a job Blinn could keep until he retired. Blinn told the Beatrice hospital administrator he would be resigning and taking the Kansas job unless the Beatrice hospital assured him it wanted him to stay. The Beatrice administrator told Blinn he did not want Blinn to leave and said, “Bob, we’ve got at least five more years of work to do.” Blinn also spoke with the chairman of the Beatrice hospital’s board of directors, who told Blinn he wanted Blinn to stay at Beatrice and that Blinn could stay until he retired. Blinn turned down the Kansas job offer and stayed at the Beatrice hospital. The Beatrice hospital terminated Blinn’s employment about six months later.

Blinn sued the Beatrice hospital for damages based on (1) alleged breach of an oral contract to employ him for at least five more years and (2) promissory estoppel. Relying on the employment-at-will rule, the trial court entered judgment for the hospital without a trial. On appeal, the Nebraska Supreme Court summarized the long-standing employment-at-will rules under Nebraska law, as follows:

“When employment is not for a definite term and there are no contractual, statutory, or constitutional restrictions upon the right of discharge, an employer may lawfully discharge an employee whenever and for whatever cause it chooses. * * *. Oral representations may, standing alone, constitute a promise sufficient to create contractual terms which can modify the at-will status of an employee. * * *.

The question is whether the [oral] assurances allegedly given to Blinn were sufficiently definite in form to constitute an offer of a unilateral contract. The language which forms the basis of an alleged employment contract, whether oral or written, must constitute an offer definite in form which is communicated to the employee, and the offer must be accepted and consideration furnished for its enforceability. * * *. Under those circumstances, the employee's retention of employment constitutes acceptance of the offer of a unilateral contract because by continuing to stay on the job although free to leave, the employee supplies the necessary consideration for the job. * * *.

The question under such circumstances is whether the employer manifests a clear intent to make a promise as an offer of employment other than employment at will, and to be bound by it, so as to justify an employee in understanding that a commitment has been made. * * *. There must be a meeting of the minds or a binding mutual understanding between the parties to the contract. * * *.

Here, even viewed in the light most favorable to Blinn, the assurances offered to him were not sufficiently definite in form to constitute an offer of a unilateral contract. The statement that "we've got at least five more years of work to do" is not a clear offer of definite employment and does not manifest an intent to create a unilateral contract. * * *.

 

 

Continued

 

 

 

 

 

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Nebraska Employment At-Will Rule Eroded

By Robert T. Cannella

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