Relocating to Houston for a new job, only to have that job offer withdrawn, is financially and emotionally disruptive. Texas law generally supports at-will employment, which permits employers to rescind job offers without penalty, provided the reason is lawful. However, in certain situations, individuals affected by withdrawn offers can seek financial relief under the legal principle of promissory estoppel, often referred to as detrimental reliance.
At-will employment and offer letters
Texas typically considers employment at-will unless clearly specified otherwise through a written employment contract. Employers typically can revoke an offer any time before employment begins without legal repercussions. Standard job offer letters usually confirm this at-will status unless they explicitly mention employment terms, such as duration or conditions required for termination.
Understanding promissory estoppel
Under certain circumstances, promissory estoppel can serve as a limited exception to Texas’ at-will employment doctrine. To succeed in a claim, you must prove several facts. First, you must show that the employer made a specific and definite promise. Then, you must show that they reasonably expected you to rely on that promise. In turn, you must also show that you relied upon the promise by taking significant actions, like moving or resigning from your previous position. Lastly, you must demonstrate that this reliance directly resulted in measurable financial losses.
What damages can you recover?
If successful under promissory estoppel, you can recover expenses directly related to reliance. Damages include the costs associated with relocation (moving services, transportation, etc.), including expenses from temporary housing arrangements. Damages can also include penalties incurred from breaking housing leases, and lost wages from leaving previous employment prematurely. However, Texas law does not permit recovery for anticipated earnings or future benefits from the withdrawn offer.
Situations where recovery is unlikely
Promissory estoppel is inapplicable in Texas under some conditions. If the offer letter contains no explicit promises or assurances of long-term employment, promissory estoppel likely does not apply. If the expenses related to your reliance are undocumented or speculative, the court may not find for you. Finally, if the employer withdrew offers due to legitimate reasons, like budgetary constraints or failing a background check, promissory estoppel may not be available. Without clear contractual guarantees or demonstrable reliance, Texas views such circumstances as inherent risks associated with at-will employment.
Steps to protect your potential claims
To strengthen any potential claim preserve all offer-related communications. Maintain detailed records of relocation and related expenses. And, document timelines clearly indicating how and when reliance occurred. While Texas’s at-will employment doctrine offers broad protections to employers, understanding promissory estoppel can help affected employees determine if they might qualify for limited compensation.
