White Arch Casino

Memorandum

To: Mr. Vice President of The White Arch Casino

Date: 13 August 2017

From: Kaitlin Noyola        

CC: Sal Pending

Nine months ago, a long time employee of the White Arch Casino (WAC), Enoch Thompson, was approached by Shirley Eugest, the manager of a rival casino, Venetian Flamingo Casino. Shirley offered Thompson a substantial salary increase if he would come and work for the Venetian. While consulting with his peers, Thompson asked others about their thoughts on the offer. WAC’s manager Sal Pending heard about Shirley’s offer to Thompson and called Thompson into his office saying, “If you stay with WAC, I promise that next year you will receive a promotion with a 50 percent raise and a five-year contract”. Thompson agreed to this deal and turned down the deal from Shirley. However, due to corporate downsizing, WAC dismissed Thompson from his duties last week.

Legality

While nothing has come of the incident yet, HR is worried about Thompson trying to how WAC to Pending’s promise. Luckily, Nevada is an Employment at Will state which does not guarantee employment for any period to an employee. Both employer and employee can terminate employment at any time. Legally, Pending made an oral contract with Thompson because the five elements of a contract were met.

1. Offer – Sal Pending offered Enoch Thompson a five year contract with a 50 percent raise if he stayed with WAC.
2. Consideration – Thompson considered this offer compared to the rivals offer.
3. Acceptance – Thompson accepted this offer and turned down the original offer from the rival, Shirley.
4. Contractual Capacity – (In this instance due to lack of information in the case that Sale Pending had the capacity to offer Thompson this position.) Sal Pending was allowed to make this offer to retain and employee
5. Legality – the offer is a legal offer of employment.

Because all five of these contract elements were met there was legally a contract to be upheld by WAC.

The part in which needs to be looked at very closely of this case is if Sal Pending knew that corporate downsizing was going to happen and if he knew that Thompson would have to be let go regardless in the future. Due to lack of information provided in this case we do not know this information but we will assume that he did not know a corporate downsizing was going to happen in nine months.

If Thompson were to try and enforce Pending’s promise, the courts could use Promissory Estoppel against WAC  because during their conversation Pending made a clear promise to Thompson. For a claim using promissory estoppel there must be five elements met and they are:

1. Clear Defined Promise – There was a clear promise the Pending made Thompson if he would have stayed employed at WAC.
2. The Promisor should have expected that the  promisee would rely on the promise – Of course Thompson replied on this promise because he turned down a new job opportunity.
3. The promise reasonably relied on the promise by acting or refraining from some act – Once again, Thompson stayed employed with WAC as opposed to moving jobs, therefore, relying on the promise by Pending.
4. The Promisee’s reliance was definite and resulted in substantial detriment
5. Enforcement of the promise is necessary to avoid injustice – Now that Thompson is without income his reliance on this promise is necessary

All five elements of the promissory estoppel elements were met. Therefore, if WAC was to go to court over this issue they could be held liable.

If Thompson were to file a lawsuit and win he could be entitled to punitive and actual damages from the lost wages. In cases like Toussaint, 408 Mich. 579, 292 N.W.2d 880, where they were granted hundreds of thousands of dollars.

Conclusion

        Regardless of legal implications (assuming) that Sal Pending had no idea of corporate downsizing nine months ago, I believe the promise is legally, and morally enforceable. I believe that if we do not enforce this contract that if Thompson does proceed with a legal case that White Arch Casino could be out more money than that promised in the employment contract. There is not enough information provided from the case to answer the question of is it right to downsize by cutting Thompson, because then White Arch Casino and its legal team would need to compare all employees fairly about who is being cut.