## Facts

- I.G. Katz worked for Danny Dare, Inc. from 1950 until retiring on June 1, 1975; the company president, Harry Shopmaker, was Katz’s brother-in-law.
- In 1973 Katz suffered a head injury during a robbery-related incident at a store opening; after returning to work, he had impaired walking and memory and made costly mistakes, according to management.
- Shopmaker decided Katz should retire and pursued an “agreeable pension” to induce retirement; Katz initially wanted to keep working.
- After approximately 13 months of discussions, the board approved a plan reflecting Katz’s long service and poor health, promising Katz a $13,000 annual pension for life.
- Katz retired in reliance on that promise, giving up salary of about $23,000 per year; the company paid the pension until July 1978.
- After retirement, Katz worked part-time for another employer and later part-time for Danny Dare for about two and one-half years.
- Danny Dare reduced Katz’s pension payments and, after Katz rejected the reduced check, stopped paying entirely; the company asserted Katz’s improved health justified ending payments, while Katz claimed the cut followed his refusal to increase part-time hours.

## Issues

1. Whether the employer’s promise to pay Katz a $13,000-per-year pension for life was enforceable under promissory estoppel after Katz retired in reliance on the promise.
2. Whether Katz’s retirement and loss of salary constituted reasonable and detrimental reliance sufficient to require enforcement to avoid injustice.

## Decision

- The Missouri Court of Appeals reversed the trial court’s judgment for Danny Dare and remanded.
- The court held the pension promise was enforceable under promissory estoppel and could not be unilaterally reduced or terminated on the theory that Katz’s condition improved or he could work.

## Legal Principles

- Promissory estoppel requires: (1) a promise, (2) reasonable and detrimental reliance, and (3) injustice that can be avoided only by enforcing the promise.
- A formally approved employer pension promise can satisfy the “promise” element even without bargained-for consideration.
- Detriment for promissory estoppel may consist of a substantial change in position—such as retiring and relinquishing higher wages—rather than surrender of a strict legal right.
- The possibility that an employee could have been terminated at will does not, by itself, defeat reliance where the facts support that retirement occurred in reliance on the pension promise.

## Conclusion

The court enforced the lifetime pension promise because Katz retired based on the employer’s clear commitment, his retirement and lost earnings constituted reasonable detrimental reliance, and stopping payments after inducing retirement would produce injustice absent enforcement.


Katz v. Danny Dare, Inc., 610 S.W.2d 121 (Mo. Ct. App. 1980)