## Facts

- Edward J. Hayes worked for Plantations Steel Company from 1947 until retiring in 1972 at age 65, ending his employment as general manager.
- In January 1972, Hayes announced he would retire the following July after 25 years of continuous service.
- About one week before retirement, Hayes had a single conversation with an officer-stockholder, Hugo R. Mainelli, Jr., in which Mainelli said the company would “take care” of Hayes; no amount, duration, or other terms were stated.
- Plantations had no formal pension plan covering Hayes and no pension policy for nonunion employees; the record did not establish corporate authorization for Mainelli to bind the company to a pension.
- From January 1973 through January 1976, Plantations paid Hayes $5,000 per year after his retirement.
- After a change in corporate control and financial difficulties, Plantations stopped making the payments.
- Hayes sued for unpaid installments, asserting (1) an implied-in-fact contract to pay a $5,000 annual pension and (2) promissory estoppel based on retirement and forgoing other employment.
- After a bench trial, the Superior Court entered judgment for Hayes on both theories and denied Hayes’s ERISA-based request for attorney’s fees; Plantations appealed, and Hayes cross-appealed on fees.

## Issues

1. Whether Hayes’s retirement decision or prior service supplied consideration sufficient to create an implied-in-fact contract obligating Plantations to pay a $5,000 annual pension.
2. Whether the statement that the company would “take care” of Hayes induced action or forbearance sufficient to impose liability under promissory estoppel.
3. Whether the court should reach ERISA-based attorney’s fees after resolving the contract and estoppel claims.

## Decision

- The Rhode Island Supreme Court reversed the judgment for Hayes.
- The court held there was no implied-in-fact contract obligating Plantations to continue pension payments.
- The court held promissory estoppel did not apply because the asserted promise did not induce Hayes’s retirement and the claimed reliance was insufficient.
- Because no enforceable obligation existed, the court did not decide the ERISA/attorney’s-fees cross-appeal.

## Legal Principles

- A promise made after the promisee has already decided to act cannot be supported by that action as consideration because it is not bargained for and not induced by the promise.
- Past services generally do not constitute consideration for a later promise to pay additional compensation absent a bargained-for exchange.
- An indefinite assurance (e.g., “we will take care of you”) without definite terms and without demonstrated corporate authorization may be treated as gratuitous rather than contractual.
- Promissory estoppel requires a promise that the promisor should reasonably expect to induce action or forbearance and that actually induces detrimental reliance; reliance on a preexisting decision is insufficient.

## Conclusion

The court rejected enforcement of a post-retirement “take care of you” assurance as either an implied contract or promissory estoppel, concluding the promise lacked consideration and did not induce substantial, cognizable detrimental reliance; the pension payments were not legally required, and the attorney’s-fees issue was moot.


Hayes v. Plantations Steel Co., 438 A.2d 1091 (R.I. 1982)