In Hooker v. Trusted Life Care, Inc., a Superior Court judge held that an employer can be contractually liable for rescinding an accepted offer of at-will employment. This decision is particularly noteworthy because courts rarely find employers liable for discharging an at-will employee because at-will employment does not cover a specified term, and thus there can be no damages. Since it makes little sense for an individual to have greater contractual protection prior to starting work than once employed, courts typically have found no grounds for breach of contract claims when employers renege on accepted offers of at-will employment. The plaintiff in Hooker took a different tack, and the Court concurred.
Leslie Hooker accepted a written offer of at-will employment from Trusted Life Care, Inc. (TLC) on March 4, 2005, to start work on June 6, 2005. In the interim, Hooker hurt her back and delayed her start date until June 13, 2005. On June 10, 2005, however, TLC informed her that it had decided not to hire her after all. Hooker sued TLC, alleging that TLC breached the accepted employment offer by terminating her before she started working. TLC responded that because Hooker had accepted an offer of at-will employment, it was free to discharge her at any time, which no doubt would include before she began her employment.
The Court agreed with Hooker and ruled that an employer who retracts an offer for at-will employment before the employee starts work may be liable to the employee for breach of contract. It reasoned that the accepted offer constituted not a “promise” for employment, as TLC contended, but rather a contractual obligation to let Hooker begin employment in exchange for her agreement to report to work. The accepted offer thus created a distinct obligation on TLC to let Hooker begin working. According to the Court, “[t]he fact that her employment, once commenced, would be governed by the rules of at-will employment has no effect on the binding nature of the [other] obligations contained within the offer agreement.”
This case serves as a cautionary tale that is particularly salient in the current economic climate in which employers might be tempted to rescind employment offers or delay start dates. In light of the Hooker decision, employers should review their offer letters and consider inserting language reserving the right to revoke an offer at any time before employment begins.
