## Facts

- John Grouse worked as a retail pharmacist for Richter Drug in Minneapolis and sought higher-paying clinical employment.
- Group Health Plan, Inc. interviewed Grouse for a pharmacist position at its St. Louis Park Clinic, including discussions of policies, salary, and benefits.
- On December 4, 1975, Group Health’s chief pharmacist offered Grouse the position by phone; Grouse accepted and stated he would give two weeks’ notice to his employer.
- That afternoon, Grouse received another pharmacist job offer (Veterans Administration Hospital) but declined it because he had accepted Group Health’s offer.
- Group Health later confirmed that Grouse had resigned from Richter Drug.
- After the offer, Group Health determined it lacked a favorable written reference and that other internal hiring prerequisites had not been satisfied; it hired someone else.
- When Grouse later reported ready to begin work, Group Health told him the position was no longer available.
- Grouse had difficulty obtaining full-time work and claimed financial loss, suing for damages.

## Issues

1. Whether acceptance of an offer for at-will employment creates enforceable contractual rights when the employer revokes the offer before the employee starts work.
2. Whether promissory estoppel permits recovery when an employer should reasonably expect a job offer to induce resignation or other forbearance, and the offeree detrimentally relies on the offer.

## Decision

- The Minnesota Supreme Court reversed the dismissal for failure to state a claim and remanded for a new trial limited to damages.
- The court held that the contemplated relationship was at-will and did not support a traditional contract claim for expectancy relief.
- The court held that promissory estoppel could bind the employer’s promise because the offer foreseeably induced, and did induce, detrimental reliance.
- The court limited potential recovery to reliance damages, not wages that would have been earned from the prospective at-will job.

## Legal Principles

- At-will employment generally allows either party to terminate at any time; this characteristic may defeat a traditional contract claim for expectation damages based solely on a revoked offer.
- Under promissory estoppel, a promise is enforceable when the promisor should reasonably expect it to induce action or forbearance, it does so induce, and enforcement is necessary to avoid injustice.
- In the hiring context, an employer may be liable in promissory estoppel for revoking an accepted offer after the offeree reasonably relies by quitting existing employment or declining another offer.
- The remedy for promissory estoppel in this setting is protection of the reliance interest: compensation for losses caused by the reliance, not the benefit of the unperformed at-will employment.

## Conclusion

The court allowed an applicant to pursue reliance damages under promissory estoppel after an accepted at-will job offer was withdrawn before the start date, where the withdrawal followed foreseeable and actual detrimental reliance, while rejecting recovery based on the expected continuation of the at-will employment.


Grouse v. Group Health Plan, Inc., 306 N.W.2d 114 (Minn. 1981)