Oregon employers should immediately tailor their job offer and onboarding practices to reflect a new ruling by the Oregon Supreme Court, which carved out an exception to the employment at-will doctrine.
In Cocchiara v. Lithia Motors, Inc., +2013 Ore. LEXIS 150 (Or. 2013), the court determined that employers that make promises to employees or prospective employees regarding at-will employment may be liable if they withdraw the offer of employment and the employee or prospective employee has relied on that promise to his or her detriment. This ruling brings Oregon in line with the majority of state jurisdictions that allow for this exception.
In the Oregon case, the employer had promised a position to a current employee based on his request for a less stressful job after suffering a heart attack. The employer was so adamant about the promise that it induced the employee to turn down another offer of employment with a different employer which also suited his health requirements. After the employee had turned down the alternative, the employer withdrew its offer for the promised position. Following that, the employee learned the offer with the alternative employer was no longer available.
Even though the promised position with the original employer was at-will, the court held that were a jury to find the employee had reasonably relied on the employer's promise to his detriment, the employer should be liable for the difference in wages. This is the case particularly where the employee has a long tenure with the employer and is in good standing at the time the promise is made.
Action Items for Oregon Employers
Oregon employers should take special note of this decision and should tailor their job offers and onboarding practices accordingly. Some suggested guidelines are as follows:
Employers should not offer jobs to employees unless they are absolutely certain that the job is available and that they intend to hire the employee.
If employers put offers in writing, they should continue to protect their interests by communicating to employees or prospective employees that offers are conditional on economic considerations, background checks, reference checks and any other relevant factors.
Any written offers should also mention that the job in question is an at-will position, and that the employee can be terminated at any time, for any lawful reason, or no reason at all, with or without prior warning.
Employers should refrain from making any statements regarding job security or job tenure when making an offer to a prospective employee.
Employers should also consider placing time limits on job offers, indicating that the offer will be withdrawn or automatically voided if not accepted within a certain period of time.
Employers must also train their hiring managers to ensure they are clear that offers can either be made in writing or verbally by speaking to the candidate.
Importantly, Oregon employers should be very careful about offering a single position to more than one candidate. If they choose to do so, they should be clear in communicating to the candidates that there is another individual (or several individuals) still in the running.
Recruiting and Hiring > Employment At-Will: Oregon > Exceptions in Tort
Recruiting and Hiring > Employment Offer: Oregon
Recruiting and Hiring > Terms of Employment: Oregon > At-Will Employment
Make a Conditional Employment Offer
Withdraw an Employment Offer