Maybe Deferred or Laid Off Associates Do Have a Breach of Contract Claim
Despite the skepticism of Above the Law commenters, David Post, writing for the Volokh Conspiracy, decided to do some research into possible legal claims available to deferred or laid -off incoming associates.
A particularly litigious incoming first-year will be happy to see the fruits of Professor Post’s efforts:
[I]t turns out things are a little more complicated than one might have thought (or than the folks on ATL might have realized, had they not been so busy mocking ideas into silence). Turns out there have been a bunch of cases on this very question, and the outcomes, perhaps surprisingly or perhaps not, go in both directions. A good ALR annotation collects the cases together [1 ALR 5th 401 (“Employer’s state-law liability for withdrawing, or substantially altering, job offer for indefinite period before employee actually commences employment”)].
It would be nothing short of fascinating if — instead of unleashing rats on the Lipstick Building on May Day — an associate actually took on their former firm based on a theory of promissory estoppel.
Not that anybody should actually try, but the best available arguments after the jump.
After discussing all of the standard reasons why at-will employees can’t recover on a breach of employment contract claim, Post finds this excellent nugget:
[S]everal courts have held that an employee did have a cause of action for breach of employment contract, some finding that the promise to employ was separate from the employment contract itself, and some finding that steps taken in reliance on the contract took the contract outside of employment at will , while others found the employer liable because it failed to give reasonable notice of termination. In one jurisdiction, there appears to be a conflict over the right to sue for breach of contract under these circumstances.
If that’s not enough to send 3Ls scurrying to their computers during these last days of free Westlaw access, Post goes the extra mile and offers to represent an associate bold enough to challenge the firms and the courts:
I’d be happy to try to persuade a court of the proposition that if the defendant had performed its promise (to hire, even with the right to immediately fire) my client would be in a very different position than he/she is today (never hired), and those are damages recoverable for breach of contract.
What would the ultimate test case be? I think you’d need a 3L who actually had their offer revoked, instead of simply deferred. That would-be associate should have excellent credentials, and be able to document other offers that he or she had on the table (preferably a split-summer situation). The revoking firm should not be offering any kind of COBRA help, and the offer should have been revoked late enough during the season that it significantly limited the prospective plaintiff’s ability to find similar employment.
Is there an associate out there who wants to stop barking and start biting? Who doesn’t love watching a good train wreck?
More on “Deferred” Law Firm Employment and Breach of Contract [The Volokh Conspiracy]
Law Firms’ Breach of Contract? [The Volokh Conspiracy]
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Comments
Hello everyone: I’ll be in Levittown, Pa., tomorrow and I’m looking for a good place for lunch. I’m not doing doc review or client interviews or depositions or any of that good stuff, because I was recently laid off. I’m just traveling the country and hoping to get together with some like-minded folk, and maybe some fellow alums, to discuss our legal options going forward. Anyone interested? If so, just name the place!
–Laid Off Latham Associate Looking to Lunch in Levittown With UPenn Staters Who Ponder Promissory Estoppel
lol, the promissory estoppel shtick has met its end
hmmmmmm
I think that someone should go do it and then bring a promissory estoppel claim against David Post when they lose because they relied on his promise that he would win.
this should be fun.
A&O reviews outsourcing policy in cost-cutting drive
Author: Emma Sadowski
Published: 23/04/2009 05:51
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Allen & Overy (A&O) is weighing up options to contract out more back-office work, as part of a review of the City giant’s outsourcing arrangements.
The initiative sees the magic circle law firm consider plans to send more work, including due diligence and litigation discovery to an external provider.
"I'd be happy to try to persuade a court of the proposition that if the defendant had performed its promise (to hire, even with the right to immediately fire) my client would be in a very different position than he/she is today (never hired), and those are damages recoverable for breach of contract."
Good, let's see how your citations to the ALR go in practice instead of theory.
I want to go to the May 1st protest at Latham NY, but am afraid of Dave Gordon (Latham NY's OMP).
So, I am going to hire actors to protest for me. So don't be surprised, my former colleagues, if you see some unfamiliar faces in the crowd. Know though that I'll be there in spirit.
- another suicidal laid off Latham 1st year
4: Ur smrt! ;)
4- win
Once Cap and Trade is passed, there will be no more deferrals or layoffs.
" the offer recession should have occurred late "
What an awesome Freudian slip. You meant rescindment of course.
Suing the law firm that offered to employ you sounds like a great way to break back into BigLaw!
2, the shtick lives on, see #4.
EVERYONE, that is a photo of the lipstick building. That is where we'll be protesting. Bring a rat, and something to defend yourself with.
"I think you'd need a 3L who actually had their offer revoked, instead of simply deferred."
Gender-neutral pronoun violation. This blog has been perpetuating the use of "their." This may be okay for a Tylenol commercial, but is not okay for lawyers. Never will be.
I read Mr. Post's article, and I thought it was good, but I was struck by his failure to discuss Restatement 90. That's the smoking gun here.
Hooray! Livin' the dream, baby!
No offense, but i'm guessing the firms kept the associates capable of winning a lawsuit against them. That may have been the first criteria when choosing who to axe.
I told you people I had some good ideas! But you would not listen. Now, I am going to bring these claims.
Wolf Block Summer '08.
I told you people I had some good ideas! But you would not listen. Now, I am going to bring these claims.
Wolf Block Summer '08.
I told you people I had some good ideas! But you would not listen. Now, I am going to bring these claims.
Wolf Block Summer '08.
I told you people I had some good ideas! But you would not listen. Now, I am going to bring these claims.
Wolf Block Summer '08.
7, more importantly lets try and find a high quality employment law attorney willing to take this case on contingency.
16 is a Strunk & White fetishist? Next time pick a battle that doesn't have 500 years of 'proper' usage on the other side.
15, why rats? and why do you need something to defend yourself? who are you defending yourself against? are you encouraging violence?
19 ended the thread. Everything after, including this comment, is a waste.
"You meant rescindment of course."
That's right 12, sounds much better than rescission.
2, its "schtick" not "shtick." I object to your cavalier assimilationalism. Just like schmiel, schmaltz, schatz, and other great Yiddish imports. You can anglicize them, but its not really the same.
26 - i for one would savor the opportunity to beat the everloving s*#t out of you. you a still employed lathamite?
26 -- I assumed he meant bring something to defend yourself against the rats. If I saw a bunch of rats running around I'd be booking the other way.
OMG I JUST CAME INTO MY MOUTH!
bingham start dates out.
OMG I JUST CAME INTO MY MOUTH!
19's comment is asinine - even if the laid off incoming associate is an idiot, they aren't representing themselves. 27 is worse for prematurely declaring game over.
That said, this whole idea of suing law firms is dumb. Mr. Post should have added that another criteria for a 3L plaintiff would be someone who never wants to work in BigLaw (or any law firm) again.
OMG I JUST CAME INTO MY MOUTH!
26, i fear the current associates will attack us under threat of being laid-off if they don't go outside and bust some protestor skull.
OMG I JUST CAME INTO MY MOUTH!
16,
25 beat me to it.
bingham start dates out - wth $$ ? I'm pleasanty surprised.
You'd have an even better case if you moved to NYC (or wherever) in anticipation of starting on your deferred start date only to be deferred again (or have your offer rescinded entirely).
If incoming associates are deferred further you may see them lining up at courthouses across the country...
ha ha take cover lathamites, we're coming with pitchforks
26, i am afraid that the current associates will attack us under threat of being laid-off if they don't go outside and bust some protestor skull.
35, who says lawyers are humorless?? I guarantee you there won't be a funnier comment throughout. But please, go ahead and seriously evaluate the merits of a lawsuit that will never happen and pat yourself on the back.
-- 19.
Not a good idea, but this will sharpen someone's legal skills more than reading ATL or enrolling in UCLA LLM Ripoff
Guys, mock all you want, but there are genuine concerns there, particularly when one takes into account allegations which might be advanced in some situations concerning related oral communications with firm representatives. Get to a jury and interesting things could happen.
i have nothing against the associates who didn't get laid-off. it's latham management that i hate.
Who laid off the most first years percentage-wise, Proskauer or Latham? And will any 2L who has a prayer of working elsewhere ever look at either of those firms ever again? I heard there is already backlash at certain law schools discouraging students against both firms.
On May 1st, we are all laid-off Latham first years.
And FYI, Latham NY laid-off more than half the first year class.
Cant wait til deferred associates line up in droves to sue their ex/never-to-be employers. The national media and American public (and a jury) will be much more sympathetic to unemployed students with mounting debt who were promised jobs two years ago that giant corporate law firms who work for wall st.
So when Congressman X withdrew an offer of employment (I had worked for him for five years prior to law school) for $60,000 two weeks before my start date, AFTER i had moved (detrimentally relied) across the country at my own expense...I have a cause of action for another four months before the SoL applies.
Hmmm, should I sue Congressman X? I should.
30 FTW
30, you will never get a shot at me. I will be staying inside the building I still work at, enjoying the office I still have, the paycheck I'm still getting, and a BJ from the secretary that still works for me.
-26
the promissory estoppel troll has beaten ATL and the legal blogging community as a whole.
29 - if you want to stick with the original Yiddish, it would actually be "shtik." "Schtick" is just as Anglicized as "shtick" (arguably even more so, as it bears less resemblance to the original spelling). ; )
I'll bite. What's with the rats? What are you going to do with them? And if you want to inundate the building with rats, why only bring one? Why not like a thousand?
you guys knew you were little dispensable monkeys when you started at BigLaw. For those who actually thought you were special or valuable, sorry for the rude awakening but you should have known better.
promissory estoppel? I mean, why not just sue Uncle Sam for breaching the promise of the American Dream that we relied on?
Which reminds me, where the hell did the bulk of my 401K go? hmm???
--Laid Off
www.laidoffdiary.wordpress.com
Any lifelong English speaker can recognize that the plurality of "they" is utterly inappropriate when paired with a singular antecedent such as "a 3L." Yes, Shakespeare and others played fast and loose with this rule centuries ago. That's what artists do. Lawyers, on the other hand, are supposed to apply logic to language and language to logic. Use of "they" as the gender-neutral pronoun is illogical and ugly in written language.
OF course if you win the suit you'd never be offered a job again in biglaw, but could you parlay it into a promising career on your own or with someone who generally sues law firms because it's all so novel and ballsy?
29 and 55, technically none of you are correct, or alternatively all of you are correct depending on how you view it. Yiddish words can only properly be written in Hebrew, meaning that there is no technically "correct" way to write it with a Roman alphabet. It is similar to how people write Chinese words in English, the best we can go is approximate how the word sounds becuase the written languages do not match up.
57: nobody cares about your "cool blog."
Are you people seriously going to the Lipstick Building on May 1 with rats? I too question what are you going to do with them? Seriously taking rats to Lipstick Building? What time?
Colorado has a luring statute (in addition to the child luring over the internet statute) that permits a claim for people who relocate within the state or from outside the state or simply pass on other opportunities to take a job, only to have it rescinded (actually or effectively) later.
Loving the Nine West ads running on ATL. Open-toe faux croc sandals, shiny buckles and free shipping! Not to mention the ad about how I can lose 25 pounds of tummy fat in a month.
I guess some market research showed that ATL readers are good targets for buying ugly shoes, eating diet pills and suing law firms. So if you're deferred or laid off, you can bare your lean midriff and wear super-cheesy open-toe shoes when you go to court to take on BigLaw. Good luck.
Seriously, how could Post overlook Restatement 90?
The Internet is a kind of hell!
thank you 29.
-2
62, YES, PROTEST MAY 1ST AT THE LIPSTICK BUILDING.
BRING A RAT.
53 - FTW
66, LOL, I LOVE IT
whether you sue or not, people laid off from big law will never work in biglaw again. believe it people - once you fall off the track you are seen as damaged goods. I'd be surprised if someone could tell a reasonably believable story that contradicted this little nugget of wisdom. While laid-off first and 2nd years may not be completely ruined for life (other career paths, etc), they sure as hell ain't getting back into big law.
41 - perfect suit for anyone who'd like to recover $30K, send 40% to his or her attorney, 40% of the balance to Uncle Sam, and then never work in big law again. Pretty good return on your $150K legal education.
Um, yeah, 50, because the American public totally loves lawyers, too ...
I wonder who will be lucky enough to have post (Restatement) 90 on this threat?
72 - You forgot spending $250K just to get the case near a jury
73, you know who they hate more? wall street fat cats who head major firms who fuck over law students just so they can buy that 5th benz. asshole.
Oh it's on now.
- Laid Off Latham Class Action Stud
For anyone who is confused by the "bring a rat" comments, labor protests in NYC commonly include a giant inflatable rat.
72, 73, and 75 are all partners
How do I know when it is OK to just be me?
50 - You mean, the media, general public, and a jury would be more sympathetic to overeducated 25-year-olds who are upset they didn't get their $160,000 salary and huge bonus than to big firms that work for Wall Street. Tough call - it's like picking your favorite Nazi.
90
7 here, some follow-up. This whole thread just shows me how out of touch legal academia is.
I'm not even a litigator, but I work with them all the time, and I see all kinds of issues here. Can they even establish that a job offer is a promise to provide employment? I would consider it a conditional offer which can be withdrawn by either party, or not acted upon, prior to performance. To determine it to be a promise subject to reliance damages is not consistent with the concept of at-will employment.
It's ONNNNN.
-suddenly less suicidal laid off latham first year
What are your damages? You're still an at-will employee. The firm could say you're hired effective April 23, fired effective April 24, pay you one days' salary, badabing, no claim.
28 -- Elie rewrote the line after seeing my earlier post correcting his error. But since I included the quote from the original even a Neanderthal should've caught that the Freudian slip was using "Recession".
However, the right word should have been the noun form of the verb rescind (rescindment). "Rescission" means the act of rescinding, e.g. the right of rescission.
Since you purport to be an attorney you should learn to use English and legal terms correctly. HTH
Well 81, maybe they could be persuaded to support the layoffees with 150k debt who are about to become public charges so the greedy large firm fatcats can keep themselve in hookers and coke.
if we don't pay off our federally guaranteed loans, that means YOU'RE going to.
Exactly how is suing these firms, which are already in deep financial trouble, going to do anything other than hurt the market for legal jobs? Get a grip on the economic reality of the situation.
-Rescinded 3L
Hey PE:
Why no douchebag commentary?
Oh, exams. Got it.
83 is right. If any of the idiots who've been muttering about this in the ATL comments section would talk to a real lawyer - you know, the kind that manages to stay employed - they'd hear the same thing.
90 -- your comment is ironic given your post number.
In CT there is a recent case called Ziotas which might lend someone an argument that their anticipated bonus was part of their wages and should be paid to them (at least in part) even if they were fired before bonus season. Just a thought.
what about the people of the USA's right to sue the federal government for its bullshit
I'm looking forward to the day that all the laid-off Lathamites' laptops get repossessed, increasing the intelligence of the ATL comments section by leaps and bounds.
94 - The intelligence of a comments section, as it is not an intelligent being, can not be increased. I think you meant "decrease the number of douche bags shooting their mouths off around here."
what is a lipstick building
Why are you protesting at the lipstick building? Bernie Madoff's office?
I've got something you can rely on
I definitely think a promissory estoppel claim could work, especially if you moved to a city and had other prospects. But would the employer have the defense of changed conditions w/ the economy?
60 -
You mean egg roll and lo mein are not right?
Damn.
I definitely think a promissory estoppel claim could work, especially if you moved to a city and had other prospects. But would the employer have the defense of changed conditions w/ the economy?
Honestly, if you can work through the FRCP 23(right?) class issues, a class action would be the way to go. Then the one associate who does this suit (and his/her atty) can get tons of $$ (while the rest of the laid off people can get $2 gift cards to Starbucks in the mail, once class plaintiff and the firms' counsel get done negotiating). THAT'S not a bad return on that associate's $150K investment.
96~
That's what your mom said last night and then I showed her. I think I still have some of her lipstick on my building.
1. Regarding the ATL internship, why did you prohibit comments in that thread?
2. Is the internship 420-friendly?
-MIke P.
Honestly, if you can work through the FRCP 23(right?) class issues, a class action would be the way to go. Then the one associate who does this suit (and his/her atty) can get tons of $$ (while the rest of the laid off people can get $2 gift cards to Starbucks in the mail, once class plaintiff and the firms' counsel get done negotiating). THAT'S not a bad return on that associate's $150K investment.
What ever happened to that asslobster guy?
Preventing comments in the internship thread likely means that they know what we would have said and don't need to be told.
81 - Is that even a question? Rommel wins running away.
I've won 2 class actions: I got about $6 for a ipod battery and $3 for some sort of credit card thing.
I bet the lawyers made bank though. This is why I went to law school: to be the lawyer, not the plaintiff.
*looks around for shingle and maligned ex-employees with a sympathetic slam-dunk case to settle at 33% contingency*
99 is on to something - I was involved in a matter that settled before anything was filed. After assuring (in writing) that relocation was not necessary during the interview process, a company terminated someone for refusing to relocate a few months after starting work. But the claim of PE was only relevant because the terminated employee also had a competing offer to work for a different company that did not require relocation. If the 3Ls that don't get hired had a competing offer from another firm that did not defer start dates, then the PE claim is stronger. If not, there is no detrimental reliance.
83 - wrong. Ask any employment attorney if they want to defend a billion $ Biglaw firm in front of a jury against a poor starving 3L student saddled with huge loans waiving an offer letter giving a start date, salary, etc. that was accepted by the 3L.
102/105 - If you're not sure what Fed Rule governs class actions, I'm guessing you're not the one we should be looking to for an evaluation of class cert prospects.
By the way, can someone let me know when it is 4:20?
-Mike P.
48, Proskauer leads Latham in terms of % of first years laid off, but the competition isn't over yet.
59, wasn'r Charney hired by Clifford Chance after suing Sullivan & Cromwell?
111, I suppose the myriad suits on this fact pattern currently winding their way through our courts prove your point.
Although, if you ask any employment attorney if they want to defend a large law firm they are going to say yes.
I would think simply having turned down another offer isn't going to help much unless you can show the other firm didn't do the same thing to their associates. In this economy no guarantee. I think actually moving to an expensive city, etc. is probably stronger. Might get the thing settled and at least get your moving expenses covered. Filing suit might just be enough to get the firm to do the right thing.
85 -you probably haven't worked before, but healthcare costs a shit load and one day is enough to get a year's worth of COBRA, as I understand it.
115 - point taken. But consider that many of the top 2009 law grads from across the country, after passing the bar, will sit stewing with nothing to do because of their deferred/rescinded offers. Not a far fetched idea that all of that legal latent will create its own opportunity to gain experience by taking the firms to task.
Once again, the board is lacking in imagination. The question is not whether the promissory esoppel claim is correct (unless you went to Yale or were a wonky kid who loved "their" Fed Courts class), but whether the claim has any settlement value.
I believe it does.
You just need one plaintiff and then class the mofo up. Then settle and take your 33 1/3.
But what you really need is a clerk who was promised a bonus. Then, it is promise for performance, one could conceivably argue. States a claim, I declare. If they flinch, you start the depositions and strike suit this to a payday.
-Employed Penn Grad
119 here. Before I went to Penn, I worked for a famous class action plaintiffs attorney who told me, after I asked him if a legal theory would result in injustice: "If you want justice, go to the fucking seminary. In fact, you better not go to Penn. You better go to Yale, because you would never survive a fucking day at Temple." He, of course, went to Temple and whatever its ranking in the US News, he's worth hundreds of millions now, takes his helicopter to hearings, and has a bunch of houses all over the place. Think like a lawyer, not like a cynical Dartmouth grad who thought private equity was the department to be in.
-Employed Penn Grad
I hate you, 120. I hate your former boss, too. You are slimy. If I can't make a living in this profession defeating and detesting you, I'll find another profession.
61: yes, it is indeed a cool blog. thanks for caring!
www.laidoffdiary.wordpress.com <--- address to my uber cool blog.
speaking of class actions and 3Ls, what ever happened with that bar exam antitrust class action suit
Ha - A big FU to all the haters who told me to go back to contracts class when I suggested such a claim in the comments a month or two ago in response to someones PE suggestion. Further, I threw in the scenario that a judicial clerk expecting a bonus may even be entitled to even more damages. (Anyone recall which post this was? Couldn't find it).
Props to Professor Post for taking the initiative to do the research. I'm hoping all you haters don't shoot down your clients or colleagues creative suggestions as quickly as you shot the potential breach of K claim down.
85 - wrong. Can't fire you the next day: they'd need to give you 3 months notice under the WARN Act. I'm pretty sure that a firm would have a hard time qualifying a termination after 1-day of employment as merit-based and unrelated to mass layoffs. And if you are the only guy they fire under these conditions, you could probably find some kind of discrimination case in there.
102 - Class representatives don't generally get much, if anything, extra above the rest of the class.
-- Former Class Action Guy