What to do if an employer reneged on an offer of employment after a contract was signed?

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What to do if an employer reneged on an offer of employment after a contract was signed?

I was offered a position at a Fortune 500 company through an employment agency/payroll service (preferred vendor for this company). I was given a start date of 11/1 per the contract, as well as an hourly rate. I resigned from my part-time job and now, 3 weeks later, I am still waiting for my start. I was brought into the agency to sign paperwork and provide check information for automatic check deposit. I have been unemployed (full-time) for 1 1/2 years and amin  financial crisis (mortgage being modified to keep my home, $35K medical bills, $77K college loans), so this has been more than stressful for me.

Asked on November 18, 2010 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You might not have a cause of action. If the contract for employment was the employment agency/payroll company, not you, it might be very difficult to enforce, since you are not a party to it. (Sometimes a 3rd-party beneficiary of a contract can enforce it for his her benefit, but that takes somewhat extraordinary circumstances.) Secondly, if the contract was simply for "an" employee, not you in particular, then you would not have a contractual basis to sue the Fortune 500 company.

If the employement agency had a contract with you to give you or place you with a job, then you could enforce that contract, but I suspect they did not actually have same with you.

IF the agency told you the job was guaranteeed--that you had an absolutely firm, no contingencies, caveats, doubts, etc. job offer--AND they also knew that you were planning to quit an existing job to take it, you might be able to establish a claim under the theory known as "promissory estoppel." However, that would take (legally) a completely firm promise, made in the expectation you would rely on it and also change your position to your detriment in said reliance (e.g. quit the other job). As a practical matter, you'd also need to be able to prove the promise or represenatation, which can be difficult if it was all oral, and also prove they knew or intended for you to take action to your detriment in reliance upon it.


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