Offer at Your Own Risk: Why Louisiana Employers Who Withdraw an Offer of Employment May Find Themselves Liable Under Civil Code Article 1967

• Author: Taylor Crousillac
• Position: J.D./D.C.L., 2016, Paul M. Hebert Law Center, Louisiana State University.
• Pages: 921-957

Offer at Your Own Risk: Why Louisiana Employers

Who Withdraw an Offer of Employment May Find

Themselves Liable Under Civil Code Article 1967

TABLE OF CONTENTS

Introduction .................................................................................. 922

I. Trying to Find the Answer: The Various Approaches to

Rescinded Employment Offers ..................................................... 924

A. Jurisdictions that Allow a Wronged Prospective Employee

a Cause of Action ................................................................... 925

B. Jurisdictions that Do Not Allow a Wronged Prospective

Employee a Cause of Action .................................................. 929

C. Louisiana’s Misguided Approach .......................................... 931

1. A First Take: May v. Harris Management Corp. ............ 931

a. The May Majority’s Faulty Rationale ....................... 932

b. The May Concurrence’s Apprehensive Rationale ..... 932

c. The May Dissent’s Well-Reasoned Rationale ........... 933

2. Another Chance: Bains v. The Young Men’s Christian

Ass’n of Greater New Orleans, Louisiana ....................... 934

II. Louisiana Doctrines Supporting the Existence of Pre-

EmploymentClaims: The At-Will Employment Doctrine,

Detrimental Reliance, and Civil Law Distinctions ....................... 936

A. The At-Will Employment Doctrine in Louisiana ................... 937

1. Louisiana Courts’ Misapplication of Article 2747 .......... 938

2. The Requirement of Good Faith in the At-Will

Relationship ..................................................................... 939

B. The Evolution of Detrimental Reliance in Louisiana ............. 941

1. Pre-Civil Code Article 1967 ............................................ 941

a. Historic Civil Law Roots .......................................... 942

b. Ducote v. Oden: Louisiana Supreme Court’s

Questionable Rejection of Promissory Estoppel ....... 943

2. A Defining Moment: Louisiana Legislature’s

Codification of Article 1967 ............................................ 944

C. Unique Civilian Concerns ...................................................... 946

1. Civil Law Cause as Compared to Common

Law Consideration ........................................................... 946

a. Common Law’s Burdensome Requirement of

Consideration .............................................................. 947

b. Civil Law’s Flexible Cause ......................................... 947

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2. Other Civil Code Provisions Affect the Analysis ............ 948

III. The Failure of Louisiana’s Current Approach .............................. 949

A. Detrimental Reliance Should Not Be Disfavored in

Louisiana Law ........................................................................ 950

B. The At-Will Employment Doctrine Should Not Supersede

Article 1967............................................................................ 950

C. Civilian Considerations Make a Difference ........................... 952

D. Public Policy Favors Recovery .............................................. 954

IV. Returning to Bob: The Application of Justice .............................. 956

Conclusion .................................................................................... 957

INTRODUCTION

Meet Bob, an extremely successful and hardworking individual who

has unexpectedly found himself without a job or a way to put food on the

table for his family. Just a few weeks ago, Bob was happily employed with

a good salary when Kirk, owner and chief executive officer of the largest

Louisiana company specializing in Bob’s area of expertise, contacted him.

Kirk offered Bob employment at his company with a salary substantially

higher than Bob’s current job. Kirk told Bob that he could start in two

weeks. Bob had to think of his family, his future, and his co-workers that

he would be leaving if he accepted Kirk’s offer. After serious

consideration and multiple conversations with Kirk about the sincerity of

his offer, Bob finally accepted the position and quit his current job. Bob

and his family were thrilled at the prospect of greater economic liberty that

would come with the promised increase in income.

Shockingly, Kirk called Bob the Friday before his start date and

withdrew his offer of employment, telling Bob that he no longer thought

that hiring Bob was a good idea for the company. Bob was in disbelief

upon hearing this, and immediately called his former employer begging to

return, but it had no longer wanted Bob back. Because Bob works in a

specialized field, he faces bleak prospects of finding another job at his skill

level in a reasonable time. Despite being elated just hours before, Bob’s

entire family was now at risk.

Kirk’s actions and promises led directly to Bob’s calculated decision

to quit his job, and Bob would not be unemployed if Kirk had not offered

him a better job. Despite this obvious problem, Louisiana courts have

applied the state’s at-will employment doctrine to hold that relying on an

2016] COMMENT 923

offer of employment is unreasonable as a matter of law.1 This holding

means that an aggrieved prospective employee has no chance to argue his

or her case on the merits, no matter how egregious the employer’s actions.2

This result is surprising in light of Louisiana’s detrimental reliance theory

that is codified in Louisiana Civil Code article 1967, which seems

perfectly tailored for Bob’s situation.3

The current Louisiana jurisprudence that categorically bars recovery

on revoked offers of employment claims is misguided and should be

overruled. Under Louisiana law, courts should not consider relying on an

offer of employment unreasonable as a matter of law, even if that

employment is at will. In certain circumstances, a prospective employee’s

reliance on an employer’s offer of employment is completely reasonable.

Copyright 2016, by TAYLOR CROUSILLAC.

1. See May v. Harris Mgmt. Corp., 928 So. 2d 140, 148 (La. Ct. App. 1st

2005) (“We hold that it is unreasonable as a matter of law to rely on an offer of

at-will employment, just as it is patently unreasonable to rely on the permanency

of at-will employment once it begins.”); RICK J. NORMAN, LOUISIA NA PRACTICE:

EMPLOYMENT LAW § 3:9, at 36 (Supp. 2013–2014 ed., 2013) (citing the May

holding as the rule); Tracy A. Bateman, Employer’s State-law Liability for

Withdrawing, or Substantially Altering, Job Offer for Indefinite Period Before

Employee Actually Commences Employment, 1 A.L.R.5th 401 (West, Westlaw

through 2015) (using May as the Louisiana Rule); Bains v. Young Men’s

Christian Ass’n of Greater New Orleans, 969 So. 2d 646, 652 (La. Ct. App. 4th

2007) (Armstrong, J., dissenting) (“Present Louisiana case law finds that it is

inherently unreasonable to rely on an offer of at-will employment.”); infra Part

II.A (discussing at-will employment in Louisiana).

2. This result is due to the fact that Louisiana jurisprudence requires a

plaintiff in detrimental reliance cases to prove three elements by a preponderance

of the evidence, and an absence of one of the elements can lead to the dismissal

of the plaintiff’s claims at the summary judgment stage. To recover under the

theory of detrimental reliance the plaintiff must prove: (1) the promisor made a

representation by conduct or word; (2) the promisee’s justifiable/reasonable

reliance on the promisor’s representation; and (3) a change in the promisee’s

position to his or her detriment because of that reliance. May, 928 So. 2d at 145;

see also Murphy Cormier Gen. Contractor, Inc. v. Dep’t of Health & Hosps., 114

So. 3d 567, 596 (La. Ct. App. 2013); Amitech U.S.A., Ltd. v. Nottingham Constr.

Co., 57 So. 3d 1043, 1052 (La. Ct. App. 2010). This Comment focuses on the

second element.

3. The article in pertinent part states:

A party may be obligated by a promise when he knew or should have

known that the promise would induce the other party to rely on it to his

detriment and the other party was reasonable in so relying. Recovery

may be limited to the expenses incurred or the damages suffered as a

result of the promisee’s reliance on the promise.

LA. CIV. CODE art. 1967 (2015). The facts in this hypothetical share many

similarities with the facts of Bains, 969 So. 2d 646. See infra Part I.C.2 (discussing

the Bains decision).