Court Opinion

ID: 9541623
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:27:11.118587+00
Date Added: 2024-06-11T15:04:09.631224
License: Public Domain

WOLLHEIM, J.,
dissenting.
Because I believe that defendants are not entitled to summary judgment as a matter of law, I dissent.
According to the majority, the issue here is an employer’s right to terminate an at will employment agreement before the employee has begun work. I disagree. Plaintiff was not yet an employee who could be “terminated.” Rather, the issue is whether defendants impermissibly revoked a unilateral contract on which plaintiff had begun performance. The following facts are significant: In October 1993, after plaintiff had been working for defendants for over one year, plaintiff informed defendants that, because of professional opportunities outside of Oregon, he did not intend to *9take the Oregon bar examination unless he received a firm offer of employment from defendants. Several months later, defendants made that offer. However, that offer was not simply a promise by defendants to employ plaintiff in exchange for a promise by plaintiff to appear at work. Defendants conditioned their offer by: (1) requiring that plaintiff take and pass the Oregon bar examination and (2) making employment subject to the renewal of defendants’ juvenile court indigent defense contract at the current compensation rate. When plaintiff took the bar examination, he began performance on defendant’s unilateral contract, thereby proscribing defendant’s right to revoke the offer.
As the majority notes, the usual ride in Oregon is that employment contracts are terminable at will, Lewis v. Oregon Beauty Supply Co., 302 Or 616, 620, 733 P2d 430 (1987), and that the at will principle can apply to one contract that covers the entire employment relationship. However, employers are free to alter the usual “at-will” rule by contrary agreement. Id. Here, plaintiff contends that, although his ultimate employment may have been at will, defendants proposed a unilateral contract by separately agreeing that they would hire him as long as two conditions were met. The consequence of the unilateral contract was to limit defendant’s option not to employ plaintiff.
A unilateral contract exists when one party makes a promise in return for consideration other than a promise. The Oregon Home Builders v. Crowley, 87 Or 517, 534-35, 170 P 718 (1918). Here, defendants’ promise was made in return for specific actions by plaintiff. Once plaintiff began performance, the unilateral contract offer was accepted and the parties entered into a unilateral contract.1 The Oregon Supreme Court has recognized that an employer generally is free to set the terms and conditions of employment and the employee is *10free to accept or reject those terms and conditions. However, offering certain terms and conditions may amount to an offer of a unilateral contract. Once an offeree begins performance based on the terms of a unilateral contract offer, the offeror may not revoke the offer. State ex rel Roberts v. Public Finance Co., 294 Or 713, 720 n 3, 662 P2d 330 (1983); see McHorse v. Portland General Electric, 268 Or 323, 331, 521 P2d 315 (1974) (employer may not terminate disability benefit plan that was in force during term of employee’s employment despite express reservation of right to terminate benefit plan); Taylor v. Mult. Dep. Sher. Ret. Bd., 265 Or 445, 450-51, 510 P2d 339 (1973) (employer cannot exclude employee from retirement benefits policy that was in effect and covered her while she worked); Harryman v. Roseburg Fire Dist., 244 Or 631, 634-35, 420 P2d 51 (1966) (employer must pay former employee for accumulated sick leave even though employer later revoked the sick leave policy); Horton v. Prepared Media Laboratory, Inc., 165 Or App 357, 997 P2d 864 (2000) (employer must pay severance benefits earned by employee even though employer later revoked severance benefits policy). Similarly here, defendants agreed to hire plaintiff, and he began performance of the agreement by taking the Oregon bar examination. At that point, defendants could not revoke their offer.
The majority states that my reliance on Taylor, Horton and similar cases is misplaced. My point in looking to those cases is not to imply that plaintiff is an employee who has already accrued a benefit (in fact, quite the opposite is true), but rather that, when obligations are undertaken in fulfillment of a unilateral contract, the contract cannot be revoked with impunity by the promising party merely because the employment itself is at will. Surely if the principles underlying unilateral contracts cannot be defeated during at will employment, then those principles cannot be defeated before employment. Furthermore, contrary to the majority’s assertion that plaintiff has “accrued nothing” prior to revocation, plaintiff in this instance has accrued the detriment of having paid for, studied for and taken the Oregon bar examination, in fulfillment of the conditions of defendants’ promise, when he would otherwise not have.2
*11I consider the fact that plaintiff and defendant entered into a unilateral contract dispositive in this instance and therefore conclude that defendants are not entitled to summary judgment as a matter of law. I also find support for my result in case law from other jurisdictions. Although the majority of other jurisdictions that have examined agreements for future employment have not done so under facts where a unilateral contract was created, I find the rationale behind many of the cases to be applicable in situations akin to the present one.
I am persuaded by decisions from other jurisdictions holding that a prospective employee can sue his employer when an offer of employment is accepted and later revoked, either because the contract to employ is seen as a separate contract that is not at will or because recovery is based on a promissory estoppel theory. See Comeaux v. Brown & Williamson Tobacco Co., 915 F2d 1264, 1270-73 (9th Cir 1990) (separate contract to employ plaintiff; court does not reach promissory estoppel theory because plaintiff is limited to reliance damages in any event); Hackett v. Foodmaker, 69 Mich App 591, 245 NW2d 140, 142 (1976) (separate contract to employ); Bower v. AT&T, Technologies, Inc., 852 F2d 361, 363-64 (8th Cir 1988) (promissory estoppel); Pepsi-Cola General Bottlers, Inc. v. Woods, 440 NE2d 696, 699 (Ind App 1982) (same); Grouse v. Group Health Plan, Inc., 306 NW2d 114, 116 (Minn 1981) (same). As the Bower court explained, “if damages sustained in reasonable reliance on an employer promise were not available, the effect of such a rule would be to allow the employer to take advantage of whatever benefits might accrue to him by his inducing a potential employee to leave behind home and/or steady employment [or to forgo other job opportunities] while at the same time being *12completely free of any obligation to keep his word.” 852 F2d at 364.
Admittedly, some decisions have reached the opposite conclusion and have held that even when a prospective employee detrimentally relies on a promise of employment, no recovery may be had. See White v. Roche Biomedical Laboratories, Inc., 807 F Supp 1212, 1214-20 (DSC 1992), order aff'd 998 F2d 1011 (4th Cir 1993) (rejecting both breach of express contract and promissory estoppel theories); Morsinkhoff v. DeLuxe Laundry & Dry Cleaning Co., 344 SW2d 639, 643-45 (Mo App 1961) (same); Ingram v. Fred Oakley Chrysler-Dodge, 663 SW2d 561, 562 (Tex App 1983) (same); Sartin v. Mazur, 237 Va 82, 375 SE2d 741, 743 (1989) (same). See also Tracy A. Bateman, Annotation, Employer’s State-Law Liability for Withdrawing, or Substantially Altering, Job Offer for Indefinite Period Before Employee Actually Commences Employment, 1 ALR 5th 401 (1992) (collecting cases both relying on and rejecting breach of contract and promissory estoppel theories).3
I reject the position that no recovery is available when an employee relies and acts on a promise of employment. First, that outcome is inconsistent with our Supreme Court’s decisions regarding an employee’s right to rely on an employer’s unilateral contract offer as to the terms and conditions of employment and as to the irrevocable nature of such an offer. I see no reason to distinguish between a prospective employee’s right to rely on a promise of employment and an employee’s right to rely on a promise that benefits will follow from the employee’s work. Second, as acknowledged by at least one court holding that a prospective employee cannot rely on a promise of employment, that outcome is a “harsh” one, “the result of which is that an employee who,” for example, “resigns one job for another at-will employment does so *13at his peril.” White, 807 F Supp at 1220. Nothing requires us to reach such a harsh and unfair result when the contract itself calls for the prospective employee to undertake performance prior to employment.
I am also not convinced by the rationale of the majority and some other courts that an employee has no recourse when he or she has relied on an offer of employment that is later revoked. One reason given is that, if “the actual employment was [to be] terminable at will, it would be illogical to hold * * * that somehow the offer of such employment was not terminable at will.” Sartin, 375 SE2d at 743. Whatever force that proposition may have in the abstract, nothing prevents an employer from agreeing to employ a prospective employee, providing that the employee satisfies certain conditions, so that the employer is no longer free to terminate that separate agreement for any reason or for no reason. That is what plaintiff claims happened here.
Another reason given by the majority for holding that a prospective employee has no recourse when an offer of employment is withdrawn is that the employee’s reliance on the employer’s promise is not reasonable. The promise of employment is, instead, considered to be “illusory since an employer who promises at-will employment has the right to renege on that promise at any time for any reason.” White, 807 F Supp at 1219. As reasonable as that statement may sound in the context of a contract based on mutual promises that is still in an executory stage, that statement is not reasonable where an employer requires a prospective employee to satisfy certain conditions prior to employment. That statement assumes that the employer has not limited its option to terminate the agreement to employ the prospective employee. Plaintiffs theory here, however, is that defendants promised to hire him so long as he took and passed the bar examination and defendants’ juvenile indigent defense contract was renewed. Both conditions were satisfied. Therefore, defendants limited their option not to hire plaintiff. This court has rejected the per se “no reasonable reliance on offers of employment” rationale relied on by the court in White and should do so again here. See Albrant v. Sterling Furniture Co., 85 Or App 272, 275-76, 736 P2d 201, rev den 304 Or 55 (1987) (“The fact that defendants were offering plaintiff a *14position which was terminable at will does not mean that she could not reasonably rely on representations they made.”).4
The majority also states that “[i]t would serve the interests of no one * * * to discourage putative employers from discharging [prospective employees] earlier rather than later * * * .” The majority misconstrues the purpose of contract law. The purpose of contract law is not to punish the breaching party, in this case a putative employer, but is, instead, to protect the legal interests of the contracting parties and to compensate the nonbreaching party who has reasonably and foreseeably relied on the contract and suffered harm from the breach. In this instance, the facts indicate that plaintiff may have suffered harm as a result of defendants’ breach of contract.
In sum, I would hold that a prospective employee who, in fulfillment of a unilateral contract offer, reasonably relies on an employer’s separate promise to hire the employee is not barred from seeking relief simply because the ultimate employment would be at will. The trial court erred in granting summary judgment to defendants. Because I would resolve the issue under a breach of contract theory, I decline to address plaintiffs promissory estoppel theory.
For the above reasons, I dissent.

 I fail to see how the situation here differs from the traditional unilateral contract hypothetical where the contract is not based on mutual promises, but rather on a promise and the performance of an action. A typical unilateral contract hypothetical is: Company A agrees to pay manufacturer B $5 per widget if B delivers 10,000 widgets to A by June 15. On June 1, B ships 10,000 widgets to A. On June 2, prior to receiving the widgets, A attempts to revoke the contract. In such a situation, we would have no trouble concluding that Company A breached a unilateral contract.

 In both its breach of contract and promissory estoppel analysis, the majority opinion implies that the result might be different if the plaintiff were other than a *11“new professional person in search of work.” I fail to understand why the stage of a person’s professional career should be of legal significance in a review of summary judgment. It may be significant in the calculation of damages or in the foreseeability of certain issues, but here, it does not matter whether plaintiff was a new professional or a person with 20 years of experience. If the concern is that calculating damages suffered by a new professional are more difficult than calculating those suffered by an established professional, then we have consistently permitted actions to go forward despite that difficulty. See MacLean & Associates v. American Guaranty Life, 85 Or App 284, 296, 736 P2d 586, rev den 304 Or 55 (1987) (“If it is shown that a loss of profits probably occurred, mere uncertainty as to the exact amount lost will not preclude recovery.”).

 The majority takes exception to the analytical approach that two contracts, as opposed to one, may exist in this instance. They claim that I find it “necessary” to create the “fiction” that two contracts exist. The majority of cases from other jurisdictions that have examined this issue have applied the analytical approach of recognizing two contracts where appropriate — regardless of whether the outcome was favorable to the employer or the employee. That is so because that approach follows established principles of contract law, not because it is a “fictional” construct that favors one party over another.

 The majority argues that this statement is not on point because the language appears in connection with the plaintiffs fraud claim and the plaintiffs breach of contract argument was rejected by the court. However, the majority fails to explain why reliance on a promise of at will employment is not per se unreasonable for purposes of fraud, but would be per se unreasonable for purposes of a unilateral contract for employment.