There are three elements to be satisfied to invoke the doctrine of promissory estoppel. These are a promise; a detrimental reliance on such promise; and that injustice can be avoided only by enforcement of the promise.
Plaintiff, a former employee was injured on the job while he was still working for his former employer, the Defendant. The former employer's board of directors approved a resolution in which they promised to pay the former employee a pension. The Plaintiff finally agreed to retire with the pension amounting to $13,000 a year for life. He said that without it, he would not have retired. He was then employed on a part-time basis for another company, but at the same time, also for Defendant on a part-time basis. This arrangement continued for two and a half years.
However, it was at this time that Defendant decreased the amount of the pension check. The Plaintiff returned the check and demanded the full amount. As a result, Defendant stopped sending checks, justifying that the Plaintiff’s health had improved to the point where he could resume employment. Plaintiff then testified that the cut was made after the refusal to increase working hours. The trial court held that the former employee was entitled to the pension.
Was the Plaintiff entitled to the original pension of $13,000?
The court ruled in favor of the Plaintiff. The doctrine of promissory estoppel states that a promise can be enforced if the promissee detrimentally relied upon the promise to the extent that its enforcement is material in order to avoid injustice. The Plaintiff had retired with a reliance on the promise, and noted that the Defendant could have dismissed him, but chose not to.