Disclaimers & Promissory Estoppel

Imagine that, rather than because of his speech, but for no reason at all, University of Illinois Chancellor Wise decided not to present Prof. Salaita’s appointment to the Board of Trustees. Also assume that the facts are as they’ve been publicly described – there is no documented backchannel communication assuring that the appointment was a “rubber stamp,” and the Board had no knowledge of the offer’s existence before the summer. Finally, assume that the Illinois Chancellor has not failed to forward on a hiring proposal to the Trustees since, say, 2010.

These assumptions strip away the political and constitutional questions,* and leave us with a clean problem: does an express reservation of authority in an offer of employment make it unreasonable to rely on it, where the current institutional practice is for such authority to be confirmed later? Dorf thinks “no.” I, and Steven Lubet, think “yes.”

In my first post, I cited a number of cases in which promissory estoppel claims by prospective faculty members under circumstances like these were denied, including some that rested on the conclusion that the ultimate authority lay with the Board of Trustees.  This post continues that research.  I have found no cases directly on point in Illinois. Nor have I found a single case outside of Haviland v. Simmons where a plaintiff successfully asserted a PE claim under these circumstances.  In addition to the cases I cited in the original post, see also Drake v. Medical College of Ohio, 120 Ohio App.3d 493 (1997) (representation by college president that a faculty member would be hired and trustees would be a “rubber stamp” didn’t give rise to PE Claim);  Broderick v. Catholic University, 365 F. Supp. 147 (D.D.C. 1973) (representation of prospective wage equality in president’s letter not reasonably reliable in light of several factors, including reservation of power to Trustees).  Of the dozen or so cases I have found in this vein, Oja v. Blue Mountain Community College, 2004 WL 1119886 (D. Ore. 1994) comes closest to the Salaita facts:


“Defendants argue that McCarrell, the interim president, stated in the June 18, 2002 letter to plaintiff that McCarrell would recommend that the Board agree to employ plaintiff. I agree with defendants that a close reading of the letter and the contract show that McCarrell did not agree to employ plaintiff but rather stated that he would recommend that the Board employ plaintiff. This is indicated by contract’s blank signature line for the Chair of the Board.
Plaintiff knew that Board approval was legally required, but argues that this as a mere formality. Plaintiff cites alleged statements by Shea to the effect that the job was secure, which Shea denies. Assuming Shea did make such statements, casual or unauthorized comments cannot create a binding employment agreement. See Butler v. Portland General Elec. Co., 748 F.Supp. 783, 792 (D.Or.1990)aff’d sub nom. Flynn v. Portland General Elec. Co.,958 F.2d 377 (9th Cir.1992) (table, text in Westlaw). The promissory estoppel claim fails because it was not reasonable for plaintiff to believe that he had a binding contract with Blue Mountain based on McCarrell’s statement that McCarrell would recommend plaintiff’s employment to the Board.”

Now this isn’t precisely on point. The letter to Salaita did offer employment, subject to the condition listed.  So it’s a better case for reliance than Oja. But the similarities are otherwise striking, including the alleged side representations of security. There is also a line of cases in which  general disclaimers of intent to contract in university policies defeat promissory estoppel claims.  See Ishibashi v. Gonzaga University, 101 Wash. App. 1078 (2000). That said, contract authorities (like Farnsworth and Perillo) state that some courts have given promissory estoppel relief notwithstanding disclaimers of intent to be bound, especially where the disclaimers are general (in an employment manual) and the promises specific. There’s a case like this in every casebook, and they tend to turn on how unjust the conduct ends up feeling.  See, e.g., Spooner v. Reserve Life Ins. Co., 47 Wash. 2d 454, 287 P.2d 735 (Wash. 1955) (denying relief).

Given this caselaw, and the general trend against promissory estoppel I earlier identified, the best thing that Salaita would have going for him – in the unlikely event that he were to litigated in federal or state court** – are the side representations and academic custom. The question of whether parol evidence is barred in PE cases is notoriously complex. In Illinois, PE can’t defeat the statute of frauds, and it would be a further complex issue to decide whether the writing – which is not signed by the ultimate authority to be charged – satisfies the statute, as Larry Cunningham has pointed out.  My own gestalt is that the side representations would not be admissible,though if they were in writing they might be more likely to color the court’s analysis.

As for custom and practice, I agree with everyone who has said it is relevant.  But, as a district court stated in dismissing evidence of custom of providing a six year tenure clock,

Custom is an area of contract law through which the courts must travel prudently. Only upon a clear showing of custom, nigh universally understood, should a court impose obligations based on custom . . . This Court will not enforce contractual obligations based on a custom which at best finds only tenuous support in the facts.” Marwill v. Baker, 499 F.Supp. 560 (D. Mich. 1980).

*As I originally wrote, I think that there are serious constitutional infirmities in the University’s position, as well as substantial academic freedom arguments. Rescinding the offer was a bad decision.

**Mike Dorf’s assumption that federal courts will exercise supplemental jurisdiction over the promissory estoppel claim assumes that the University of Illinois isn’t immune under sovereign immunity.  Cf. Kaimowitz v. Board of Trustees of Univ. of Illinois, 951 F.2d 765 (7th Cir.1991) (holding that it is immune unless certain exceptions are met). I think this issue would turn on whether the PE recovery is seen as a “present claim” or not, but I’m not an expert.


You may also like...

6 Responses

  1. Just a quick question: did any of the cases you looked at, particularly those you think cut against Salaita’s claim, involve a situation in which the condition necessary for the offer of employment to be valid was scheduled to take place after the offeree was scheduled to begin work? Lubet claims that there is no evidence that the Board’s decision was merely pro forma, but he completely ignores that, by Chancellor Wise’s own admission, Salaita’s classes were scheduled to begin in August but the Board was not going to meet to approve his appointment until September.

    • Stash says:

      That fact is indeed troubling. At best, it forces offerees to act at their peril and seems to me a very stupid and unfair way to approve candidates.

      But at the end of the day, I don’t think this translates into an enforceable custom or expectation that trustee approval is pro forma. As they say, this proves too much, because then, engaging in this custom, as the trustees would have a right to do, would mean that anybody hired who is disapproved per statute has a claim, thereby eliminating the statutory authority of the trustees.They don’t have the authority to repeal their authority. It’s a statute and can’t just be swept off the books by custom. In other words, customarily deferring to the administration’s judgment can do nothing to eliminate the fact that the offer is conditional and cannot be relied upon, else the statute is a dead letter.

      However obscure the law, generally one is not allowed to reasonably rely on something contrary to it unless it is a lawyer giving advice, in which case you can sue the lawyer, or negate your intent to violate it. There are constitutional issues regarding selective enforcement, but it would a separate claim.

  2. Steven Lubet says:

    Dorf relies on Newton Tractor Sales v. Kubota Tractor Corp for the proposition that Illinois recognizes promissory estoppel as a cause of action, which is true enough. But the existence of a cause of action does not mean that plaintiffs always win. The Newton Tractor ruling itself did nothing more than reverse a summary judgment in favor of the defendant, while remanding the matter for trial. As every litigator knows, there is a lot of territory between avoiding summary judgment — in which the facts are viewed in the light most favorable to the non-moving party — and winning the case. The difference is that trials require actual proof, and not merely well pled allegations. Dorf says that Salaita’s case is “relatively easy,” but it would be much more accurate to say — as far as promissory estoppel is concerned — that it probably would not be dismissed at the pleading stage.

  3. dave hoffman says:

    On the question you asked: no, none of the cases are exactly like this one, though several of them state explicitly that assurances that later approval is a “rubber stamp” doesn’t mean reliance on an unauthorized promise is reasonable. I understand your argument, but it seems to me to cut both ways. Salaita *knew* that the meeting wasn’t scheduled till September. Doesn’t that suggest that the reasonable course (which apparently many people undertake at Big 10 schools) was to take a leave from W&M for a year, or even a semester? Most laterals I know don’t submit their resignation until trustee authority comes through for just this reason.

  4. Bloix says:

    You cite Haviland v. Simmons as a case in which a plaintiff asserted a PE claim even though “ultimate authority lay with the Board of Trustees.” But the key fact in Haviland was that the plaintiff’s promised deal did not include tenure, and therefore it did not require approval of the trustees. If tenure had been at issue, the court implies, the result would have been different. The import of the PE analysis in Haviland is at best ambiguous and arguably cuts against Salaita.

  5. Stash says:

    Something closer, or perhaps another issue is that in Illinois there is no “apparent authority” that can be attributed to government actors, and it is the responsibility of the would-be plaintiff to ascertain it before acting in reliance thereon. Patrick Engineering, Inc. v. City of Naperville , 2012 IL 113148. In this case, a city official told an engineering firm to go ahead with additional work with a six-figure price tag. The Illinois Supreme Court told the firm to at least go back and plead on information and belief that there was actual authority or the firm was SOL. I think this means that the statute is dispositive on the agency issue in this case, no matter what otherwise could have been reasonably believed. Note this was a pleading case, so unless it can be alleged at the pleading stage that there was reliance on an agent with actual authority to make the offer/representation, it would not get past a motion to dismiss or judgment on the pleadings.

    The case also states in dicta that even where estoppel is asserted on the basis of the word of an authorized agent, it will not be enforced except in “egregious cases.” What the rule is with respect to the state itself I do not know, nor do I know what is required for an “egregious case” or if there has ever been one.

    Plaintiff would probably also need to plead facts showing that this is an “egregious” case. The political angle might do, but my suspicion (that I have not confirmed through research) is that it is more likely about cases that approach intentional deception or oppression, and that a trip to the Illinois Supreme Court could be necessary to resolve this.