Cocchiara v. Lithia Motors, Inc. ( 2013 )

282 March 7, 2013 No. 9
IN THE SUPREME COURT OF THE
STATE OF OREGON
Michael COCCHIARA,
Petitioner on Review,
v.
LITHIA MOTORS, INC.;
and Lithia Motors Support Services, Inc.,
Respondents on Review,
and
LITHIA DM, INC.,
dba Lithia Chrysler Jeep Dodge,
Defendant.
(CC 06-2731-L7; CA A146452; SC S060100)
En Banc
On review from the Court of Appeals.*
Argued and submitted November 8, 2012; resubmitted
January 7, 2013.
G. Jefferson Campbell, Jr., Medford, argued the cause
and filed the brief for petitioner on review.
Ryan J. Vanderhoof of Hornecker, Cowling, Hassen &
Heysell, LLP, Medford, argued the cause and filed the brief
for respondents on review. With him on the brief was Eric
B. Mitton.
Shenoa L. Payne of Haglund, Kelley, Jones & Wilder,
LLP, Portland, filed the brief for amicus curiae Oregon Trial
Lawyers Association.
BALMER, C. J.
The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
______________
*  Appeal from Jackson County Circuit Court, Ronald D. Grensky, Judge. 247
Or App 545, 270 P3d 350 (2011).
Cite as 353 Or 282 (2013) 283
Plaintiff ’s existing job did not meet his health needs, and plaintiff turned
down a job with a different employer in reliance on his manager’s promise that
plaintiff had been given a new job with defendants that would meet plaintiff ’s
health needs. When defendants did not in fact hire plaintiff for the new job, he
brought this action claiming promissory estoppel, fraudulent misrepresentation,
and unlawful employment practices. The trial court granted summary judgment
for defendants on the first two claims, and plaintiff voluntarily dismissed the
unlawful employment practices claim. The Court of Appeals affirmed. Held: The
Court of Appeals erred in determining that, as a matter of law, plaintiff could not
reasonably rely on defendant’s representations and could not recover future lost
wages associated with the new job solely because of the at-will nature of the new
job. The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case is remanded to the
circuit court for further proceedings.
284 Cocchiara v. Lithia Motors, Inc.
BALMER, C. J.
In this employment case we must determine
whether a prospective employee may bring a promissory
estoppel claim or a fraudulent misrepresentation claim
based on an employer’s representations regarding a job that
is terminable at will. Plaintiff worked as a salesperson for
defendant1 for nearly eight years before he had a heart attack
that required him to seek a less stressful job. In reliance on
his manager’s promise that plaintiff had been given a new
“corporate” job with defendant that would meet his health
needs, plaintiff turned down a job with a different employer.
Ultimately, defendant did not hire plaintiff for the corporate
job, and plaintiff subsequently had to take jobs that paid
less than the corporate job with defendant or less than the
position that he had turned down. Plaintiff brought this
action against defendant claiming promissory estoppel,
fraudulent misrepresentation, and unlawful employment
practices, including employment discrimination. The trial
court granted partial summary judgment for defendant—on
the promissory estoppel and fraudulent misrepresentation
claims—and plaintiff dismissed the unlawful employment
practices claim without prejudice. The Court of Appeals
affirmed, holding that, because the corporate job was
terminable at will, plaintiff could not reasonably rely on
the promise of employment or recover future lost wages.
Cocchiara v. Lithia Motors, Inc., 247 Or App 545, 270 P3d
350 (2011). For the reasons that follow, we reverse the
decision of the Court of Appeals.
FACTS
We state the facts in the light most favorable to
plaintiff because the trial court granted defendant’s motion
for partial summary judgment. Petock v. Asante, 351 Or 408,
411 n 1, 268 P3d 579 (2011) (stating standard). Plaintiff
worked as a salesperson at a Lithia Dodge dealership from
1997 to October 2005. Following a major heart attack in
1
Plaintiff named his former employer, Lithia Motors Support Services, Inc.,
and its parent company, Lithia Motors, Inc., as defendants. For convenience, we
refer to them collectively as defendant. Plaintiff noted in his amended complaint
that he did not become an employee of Lithia Motors Support Services, Inc. until
2000, but it appears that, prior to that time, plaintiff was employed by another
subsidiary of Lithia Motors, Inc.
Cite as 353 Or 282 (2013) 285
2004, plaintiff ’s doctors recommended that he find a less
stressful job that would allow him to work shorter hours
and avoid working on the weekends. Plaintiff discussed
those needs with Summers, his General Sales Manager
at the dealership, but he also pursued other employment
because his sales job could not meet his health needs.
Plaintiff received an offer to be a sales representative
for the Medford Mail Tribune, a position that satisfied his
health requirements. Plaintiff went to Summers to tell him
that he planned to take the Medford Mail Tribune job, and
he told Summers that that job would be less stressful and
would provide compensation that was comparable to his
current position. Summers responded that plaintiff should
not accept the Medford Mail Tribune position because
he was “too valuable” to defendant. Summers then told
plaintiff that there was a new “corporate” job available with
defendant that would meet his health needs.
After placing a call to defendant’s corporate offices,
Summers advised plaintiff that he had been given the
corporate position and that he would be contacted the next
day to come in to finalize the paperwork. Plaintiff then
asked Summers to confirm that the offer was definite, given
plaintiff ’s outstanding offer from the Medford Mail Tribune.
Summers confirmed that plaintiff had been given the job
and that the meeting the next day was a “mere formality.”
Plaintiff acknowledges that there was no discussion as to
whether or not the corporate job would be terminable at
will. After his discussion with Summers, plaintiff told the
Medford Mail Tribune that he had decided not to accept its
offer because he had received another job with defendant.
When plaintiff met with one of defendant’s
representatives the next day, the representative told
plaintiff that he had not been hired for the corporate job.
Instead, the representative was meeting with plaintiff to
interview him as one possible candidate for the corporate
job. Ultimately, defendant did not hire plaintiff for that
job. When plaintiff then tried to accept the Medford Mail
Tribune’s prior job offer, that job had been filled. Plaintiff
later accepted a different sales representative job with
the Medford Mail Tribune, but the job paid less than the
286 Cocchiara v. Lithia Motors, Inc.
previously offered job at the Medford Mail Tribune. Plaintiff
subsequently accepted yet another job that paid less than
the promised corporate job with defendant.
As noted, plaintiff brought this action against
defendant on a theory of promissory estoppel, fraudulent
misrepresentation, and unlawful employment practices,
including employment discrimination under ORS 659A.112.2
As part of his claim for damages, plaintiff sought economic
damages for the income that he would have earned in the
corporate job with defendant. Defendant filed a motion
for partial summary judgment, arguing that, because
the corporate job was an at-will position that defendant
could have fired plaintiff from at any time, plaintiff had
no reasonable basis to rely on the corporate job offer, as
required for both the promissory estoppel and fraudulent
misrepresentation claims. Moreover, defendant argued, it
would be illogical to hold defendant liable for damages that
plaintiff would have been unable to recover had he been
terminated on his first day. The trial court granted summary
judgment on the promissory estoppel and fraudulent
misrepresentation claims, noting that, even if plaintiff had
relied on all the statements that Summers allegedly had
made, plaintiff would lose
“[b]ecause they didn’t tell him you got a job for the rest of
your life here. * * * He didn’t rely on having a job for more
tha[n] a day because  * * *  nobody said to him, and you’re
going to have this job for X amount of days, months, or
years. * * * [H]e couldn’t rely on something that was never
said to him.”
Plaintiff dismissed his unlawful employment practices claim
without prejudice and appealed, arguing that the trial court
erred in granting defendant’s motion for partial summary
judgment.
On appeal, the Court of Appeals affirmed, relying in
large part on its prior decision in Slate v. Saxon, Marquoit,
Bertoni & Todd, 166 Or App 1, 999 P2d 1152, rev den, 330
2
ORS 659A.112 was amended in 2007 and 2009. See Or Laws 2007, ch 70,
§ 291; Or Laws 2009, ch 508, § 6. However, because we do not address plaintiff ’s
claim under ORS 659A.112, we need not consider the impact of those amendments.
Therefore, all references to ORS 659A.112 are to the 2011 version of the statute.
Cite as 353 Or 282 (2013) 287
Or 375 (2000). The Court of Appeals began by summarizing
the Slate decision:
“The plaintiff in Slate had been a law clerk at the defendant
law firm, which offered him a position as an associate
attorney, conditioned on the plaintiff passing the Oregon
bar examination and on the defendants’ renewal of some
juvenile and indigent-defense contracts. Those conditions
later were met, yet the ‘defendants advised plaintiff
that they were terminating the planned employment
arrangement, although plaintiff had not yet begun working
for them.’ The plaintiff sued for breach of contract and
promissory estoppel, claiming damages associated with
having taken the bar examination in Oregon, instead of in
another jurisdiction, and with having not sought alternative
employment. The trial court granted summary judgment to
the defendants, and we affirmed.
“Our holding in Slate turned on the at-will nature of the
employment that the defendants had offered the plaintiff.
*  * We *  * held, for two reasons, that the trial court
*  *
correctly had granted the defendants’ motion for summary
judgment on the plaintiff ’s promissory-estoppel claim.
First, because the promised employment was at will, ‘there
could have been no reasonable basis for reliance on’ that
promise. In other words, the plaintiff could not reasonably
have understood that the promised employment would last
for any particular length of time. Second, any monetary
losses that the plaintiff experienced were not ‘attributable
to the promise [of employment] per se.’ That is, the plaintiff
would have experienced the same losses if the defendants
had hired him, but had ‘discharged [him] immediately after
he came to work rather than before.’ Because the plaintiff
could not have recovered damages for being terminated
from the at-will job, he also could not have recovered
damages from not having been hired into that position.”
Cocchiara, 247 Or App at 549-50 (bracketed alterations in
Cocchiara; emphasis in original; internal citations to Slate
omitted).
Noting that the corporate job in this case was also
an at-will job, the Court of Appeals applied the reasoning
from Slate that “ ‘[i]t is circular and not based on reality
to argue, as [the plaintiff] does, that either his reliance or
his change in position was attributable to the promise of
288 Cocchiara v. Lithia Motors, Inc.
at will employment rather than the at will employment
contract itself.’ ” Id. at 551 (alterations added; quoting
Slate, 166 Or App at 7). The court reasoned that plaintiff
“could not reasonably rely on defendant[’s] statements as
having promised anything other than at-will employment,”
from which he could have been fired at any time. Id. at 550-
51. In addition, the court noted that plaintiff had claimed
damages associated with not being hired for the corporate
job, but had not claimed damages associated with turning
down the original sales representative job with the Medford
Mail Tribune. Id. at 551. The court stated:
“Slate is based largely on the plaintiff ’s inability to prove
that he suffered any damages from the defendants’ breach
of a promise to give him at-will employment. Our holding
here similarly is based on our conclusion that plaintiff
has not alleged any claim for damages that fairly can be
said to spring from defendant[’s] failure to give him the
corporate job; as a matter of law, plaintiff could not prove
any entitlement to lost wages from that job, as defendant[ ]
could have fired him from it at any time.”
Id. at 554. Based on that reasoning, the Court of Appeals
agreed that plaintiff could not succeed on his promissory
estoppel claim. Id. at 551.
Furthermore, the Court of Appeals determined that
the rationale in Slate was not limited to promissory estoppel
claims, contrary to what plaintiff urged, because fraudulent
misrepresentations claims, like promissory estoppel claims,
require proof of reasonable reliance and damages. Id. at 551-
52. The court, therefore, determined that plaintiff could not
recover on his claim for fraudulent misrepresentation “[f]or
the same reason that defendant[’s] promise to hire plaintiff
into the corporate job cannot subject them to liability on a
promissory-estoppel theory under Slate[.]”3 Id. at 552.
3
The Court of Appeals also rejected plaintiff ’s alternative argument that the
corporate job was offered to accommodate plaintiff ’s health condition, pursuant to
ORS 659A.112, and therefore was no longer terminable at will. Cocchiara, 247 Or
App at 554-56. Plaintiff renews essentially that same argument on review, but,
as explained more fully below, we hold that plaintiff is not barred from bringing
a promissory estoppel or fraudulent misrepresentation claim solely because the
corporate job was terminable at will. For that reason, we do not reach plaintiff ’s
alternative argument regarding ORS 659A.112 and its effect on the at-will nature
of the corporate job.
Cite as 353 Or 282 (2013) 289
On review, plaintiff renews his argument that a
prospective employee can bring both promissory estoppel and
fraudulent misrepresentation claims in the context of at-will
employment. Plaintiff asserts that Slate was incorrectly
decided because it ignored the reality that prospective
employees often rely on offers of at-will employment and
that employers expect prospective employees to rely on those
offers. Plaintiff argues that barring promissory estoppel
claims entirely in the context of at-will employment is poor
public policy and that the issue of reasonable reliance should
instead be determined by a jury. Moreover, plaintiff argues,
Slate is distinguishable on its facts.
Plaintiff further asserts that Slate should not apply
to claims for fraudulent misrepresentation, and he cites two
Ninth Circuit decisions interpreting Oregon law regarding
fraudulent misrepresentation in support of his position. In
both of those cases, the federal court allowed plaintiffs who
had been offered at-will employment to bring claims for
fraudulent misrepresentation based on statements made
by their prospective employers during the hiring process.
Arboireau v. Adidas-Salomon AG, 347 F3d 1158 (9th Cir
2003) (employee terminated seven months into at-will job
due to relocation of job overseas could survive summary
judgment on fraudulent misrepresentation claim due to
employer’s failure during hiring to disclose likelihood that
job might be relocated); Meade v. Cedarapids, Inc., 164 F3d
1218 (9th Cir 1999) (employer’s false statements during
hiring regarding employer growth provided basis for at-will
employees to survive summary judgment on fraudulent
misrepresentation claim after employer’s plant closed).
Defendant responds that allowing promissory
estoppel and fraudulent misrepresentation claims in the
context of at-will employment, as plaintiff proposes, would
create “drastic exceptions” to the at-will employment
doctrine that would render it meaningless. Defendant argues
that this court should instead adopt the holding from Slate
and other jurisdictions that a prospective employee cannot
reasonably rely on an offer of at-will employment. A contrary
holding, defendant argues, would create an unworkable rule
regarding how long an employer would have to employ new
290 Cocchiara v. Lithia Motors, Inc.
hires. Moreover, defendant suggests, employees can avoid
the result faced by plaintiff in this case by entering into
employment contracts that remove the at-will presumption.
Alternatively, defendant argues that, even if plaintiff could
reasonably rely on the offer of employment in this case, he
still loses because (1) he did not plead damages associated
with turning down the job with the Medford Mail Tribune,
and (2) he is not entitled to damages resulting from not
being hired for the corporate job because defendant could
have fired him at any time.
AT-WILL EMPLOYMENT DOCTRINE
Both parties agree that, in Oregon, “the general
rule is that an employer may discharge an employee at any
time and for any reason, absent a contractual, statutory, or
constitutional requirement to the contrary.” Washburn v.
Columbia Forest Products, Inc., 340 Or 469, 475, 134 P3d
161 (2006). The focus of the at-will employment doctrine is
on termination: Both the employer and the employee have
a right to terminate the employment relationship for any
reason or for no reason without liability. Samuel Williston
& Richard A. Lord, 1 A Treatise on the Law of Contracts
§ 4:23, 722 (4th ed 2007) (noting that the at-will employment
doctrine “eventually was adopted by the majority of
American courts which accepted the notion that it provided
each party to the employment at-will relationship with a
right of termination”). As a result, when employment is at
will, typically, neither party can expect the employment to
continue for any specified period of time. See Sheets v. Knight,
308 Or 220, 234 n 13, 779 P2d 1000 (1989), abrogated on
other grounds by McGanty v. Staudenraus, 321 Or 532, 901
P2d 841 (1995) (“Because at-will employees may be fired
at any time and for any reason, they have no reasonable
expectation of continued employment.” (Emphasis added.)).
Perhaps because the at-will employment doctrine
focuses on termination, courts have disagreed regarding
the significance of the at-will nature of employment before
employment begins. In particular, courts have disagreed
whether it is reasonable to rely on an offer of at-will
employment, which in turn affects whether an employer’s
termination of an at-will employment agreement before the
Cite as 353 Or 282 (2013) 291
employee begins working is actionable under a theory of
promissory estoppel or fraudulent misrepresentation. See
Slate, 166 Or App at 5 (so noting as to promissory estoppel);
P.G. Guthrie, Annotation, Employer’s Misrepresentation
as to Prospect, or Duration, of Employment as Actionable
Fraud, 24 A.L.R. 3d 1412 (1969) (last updated 2009) (compiling
fraud cases). Compare Grouse v. Group Health Plan, Inc.,
306 NW2d 114, 115-16 (Minn 1981) (allowing claim for
promissory estoppel where employer revoked offer of at-will
employment after plaintiff resigned other employment
and turned down other job offer in reliance on employer’s
offer), with White v. Roche Biomedical Laboratories, Inc.,
807 F Supp 1212, 1219-20 (DSC 1992), aff’d, 998 F2d 1011
(4th Cir 1993) (“[R]eliance on a promise consisting solely of
at-will employment is unreasonable as a matter of law since
such a promise creates no enforceable rights in favor of the
employee other than the right to collect wages accrued for
work performed.”). We turn now to those claims for relief
under Oregon law.
PROMISSORY ESTOPPEL
Oregon has adopted the Restatement formulation of
promissory estoppel:
“A promise which the promisor should reasonably expect
to induce action or forbearance on the part of the promisee
or a third person and which does induce such action or
forbearance is binding if injustice can be avoided only by
enforcement of the promise. The remedy granted for breach
may be limited as justice requires.”
Restatement (Second) of Contracts § 90(1) (1981); see Schafer
et al v. Fraser et ux, 206 Or 446, 468-69, 471-72, 290 P2d
190 (1955) (quoting with approval Restatement of the Law of
Contracts § 90 (1932)).4 The Restatement (Second) comments
4
In Schafer, this court adopted the formulation of promissory estoppel in
section 90 of Restatement of the Law of Contracts (1932). 206 Or at 468-69, 471-72.
We quote section 90 of the Restatement (Second) of Contracts here because “most
of the elements that must be established in order for a plaintiff to successfully
plead and prove an offensive action based on promissory estoppel * * * are similar
or even identical under both Restatements.” Samuel Williston & Richard A. Lord,
4 A Treatise on the Law of Contracts § 8:7, 138 (4th ed 2008). Moreover, although
there are differences between the two Restatements, id., this court has applied the
Restatement (Second) of Contracts in other cases. See, e.g., Caba v. Barker, 341 Or
534, 540, 145 P3d 174 (2006) (quoting Restatement (Second) of Contracts).
292 Cocchiara v. Lithia Motors, Inc.
clarify that the requirement that enforcement be necessary
to avoid injustice “may depend on the reasonableness of the
promisee’s reliance, [and] on its definite and substantial
character in relation to the remedy sought,” among other
things. Restatement (Second) § 90 comment b.
Nothing in our case law or the Restatement (Second)
suggests that a promisee’s reliance is per se unreasonable if
the underlying promise is for a contract that is terminable
at will. Even Slate, on which defendant relies, does not
foreclose a promissory estoppel claim in all cases of
at-will employment. See 166 Or App at 7 (“Assuming that
promissory estoppel ever could provide a basis for recovery
under circumstances of this general kind, it cannot here.”
(Internal citation omitted.)). Far from foreclosing such a
claim, the Restatement (Second) provides the following
illustration in the section on promissory estoppel:
“A applies to B, a distributor of radios manufactured
by C, for a ‘dealer franchise’ to sell C’s products. Such
franchises are revocable at will. B erroneously informs A
that C has accepted the application and will soon award
the franchise, that A can proceed to employ salesmen and
solicit orders, and that A will receive an initial delivery
of at least 30 radios. A expends $1,150 in preparing to do
business, but does not receive the franchise or any radios. B
is liable to A for the $1,150 but not for the lost profit on 30
radios.”
Restatement (Second) § 90 comment d, illustration 8.
Similarly to that illustration, in this case Summers
erroneously informed plaintiff that he had been given a job
(that was terminable at will) and told him that he should
turn down the position with the Medford Mail Tribune. The
Restatement (Second) illustration indicates that the at-will
nature of an underlying promise of employment does not
bar a claim based on promissory estoppel, even if it might
limit the nature of the damages available in some cases.
The Restatement (Second) approach is sound.
An employer’s legal right to fire an employee at any time
and for any reason absent contrary contractual, statutory,
or constitutional requirements does not carry with it a
conclusive presumption that the employer will exercise that
Cite as 353 Or 282 (2013) 293
right. See Tadsen v. Praegitzer Industries, Inc., 324 Or 465,
471, 928 P2d 980 (1996) (rejecting the premise in a wrongful
discharge case that “an employer should enjoy a conclusive
presumption that, had it not discharged the employee
illegally, it would have discharged him or her lawfully at
any time after it in fact did so unlawfully”). Absent that
presumption, it may be reasonable for an employee to rely
on a promise of employment, because the employee may
have reason to believe that the employer’s right to terminate
at will not be exercised before the employee begins work.
Particularly where, as here, the employee has had a lengthy
employment relationship with his employer, and the
employer asserts the employee’s value to the company, it
may be reasonable for the employee to rely on the promise
of employment, even though the job is terminable at will.
We caution, however, that reasonableness is an issue for the
jury, considering all the relevant circumstances. See Schafer,
206 Or at 481 (noting that issue of reliance in promissory
estoppel claim “presented a question for the jury”).
The Court of Appeals stated that “ ‘[i]t is circular
and not based on reality to argue, as [the plaintiff] does, that
either his reliance or his change in position was attributable
to the promise of at will employment rather than the at will
employment contract itself.’ ” Cocchiara, 247 Or App at 551
(quoting Slate, 166 Or App at 7). In Slate, the court went on
to clarify that no injustice would be avoided by allowing a
party to recover for revocation of a promise of employment
when the same party would not be entitled to recover for
the “termination of the consummated contract.” Slate, 166
Or App at 8. That is similar to the argument that defendant
makes—and that we reject—in this case. Although an
employer has a right to fire an at-will employee—though not
for an unlawful reason—without liability, the fact that the
employer has that right does not mean that a prospective
employee can never reasonably rely on a promise of at-will
employment. And if a prospective employee does reasonably
rely on such a promise, a remedy may be necessary to avoid
injustice.
In addition to challenging the reasonableness of
plaintiff ’s reliance in the context of an at-will job, defendant
argues that plaintiff cannot survive summary judgment
294 Cocchiara v. Lithia Motors, Inc.
because plaintiff did not plead damages associated with the
job that he turned down at the Medford Mail Tribune, and
plaintiff is not entitled to recover damages associated with
the corporate job because he could have been fired from that
job at any time. In response, plaintiff asserts that a decision
in this case should not turn on the type of damages that were
or were not alleged because the motion for partial summary
judgment was not focused on damages, and that, at least
in the context of promissory estoppel, plaintiff would be
entitled to damages associated with the loss of the corporate
job if he proved the necessary elements of that claim. As
noted, the Court of Appeals agreed with defendant:
“Our holding here * * * is based on our conclusion that
plaintiff has not alleged any claim for damages that fairly
can be said to spring from defendant[’s] failure to give him
the corporate job; as a matter of law, plaintiff could not prove
any entitlement to lost wages from that job, as defendant[  ]
could have fired him from it at any time.”
Cocchiara, 247 Or App at 554 (emphasis added).
At the outset, we note that defendant does not
argue, nor did the Court of Appeals conclude, that, in
general, damages associated with the corporate job could
not be recovered in an action for promissory estoppel (or
fraudulent misrepresentation). Instead, both defendant and
the Court of Appeals relied on Slate for the proposition that
the at-will nature of the corporate job precluded plaintiff
from recovering lost wages for that job. However, this court
has rejected a similar proposition in a wrongful discharge
case. In Tadsen, 324 Or 465, a jury awarded front pay to
an at-will employee who had alleged unlawful employment
practices, including wrongful discharge, and this court
affirmed the trial court’s denial of a motion to strike the
claim for front pay.5 In that case, the employer had argued
that an at-will employee cannot recover front pay because
the employee has no “ ‘right’ to, or assurance of” future
employment. Tadsen, 324 Or at 470-71. This court rejected
that argument:
5
The court in Tadsen explained that “front pay” is “a short hand term
frequently used in federal courts and administrative agencies to refer to future
lost pay and benefits.” 324 Or at 467 n 5.
Cite as 353 Or 282 (2013) 295
“We decline to hold that an at-will employee never can
prove the requisite facts for an award of front pay. The
fact that at-will employment may be terminated for any
nondiscriminatory purpose does not necessarily mean that
the likely duration of that employment is incapable of proof
to the required degree of certainty. At-will employment
may be a factor that bears on whether the proof is sufficient
in a particular case, but the right to terminate someone’s
employment does not establish as a matter of law that an
employee cannot prove the existence of front pay damages.”
Id. at 471 (emphasis added).
Similarly, in this case, the fact that the corporate
job was terminable at will, standing alone, does not create a
conclusive presumption that plaintiff cannot prove damages
related to the loss of that job. Instead, as in Tadsen, plaintiff
may seek to prove what he would have earned in the
corporate job and how long he likely would have remained in
that job had he been hired as promised and allowed to start
work. Although it may be easier for a plaintiff to prove the
likely duration of employment in a wrongful discharge case,
where the employee has a history of employment with the
employer, a plaintiff is entitled to attempt to make such a
showing outside the wrongful discharge context. Of course,
if an employer lawfully fires an employee after the employee
has started work, which could include firing the employee
for no reason at all under the at-will employment doctrine,
the employee will not be able to show that the job would
have continued beyond that point. In this case, however,
plaintiff was not allowed to start the corporate job; indeed,
the employer told him that he had never actually been hired
for that job, making it difficult for the employer to argue
that plaintiff was lawfully fired. Thus, the general principle
from Tadsen applies in this case: The at-will nature of the
employment does not foreclose plaintiff from attempting to
prove the likely duration of employment had he been hired
as promised and allowed to start work, although “[a]t-will
employment may be a factor that bears on whether the proof
is sufficient in a particular case[.]” Id. Whether plaintiff is
ultimately entitled to recover damages associated with not
being hired for the corporate job, and in what amount, is not
before this court. Nonetheless, defendant is not entitled to
296 Cocchiara v. Lithia Motors, Inc.
judgment as a matter of law solely because the corporate job
was terminable at will.
We recognize that allowing a prospective employee
to bring a promissory estoppel claim raises practical concerns
that the Court of Appeals articulated in Slate: “It would
serve the interests of no one—least of all new professional
persons in search of work—to discourage putative employers
from discharging them earlier rather than later, under
circumstances where there is no possibility that an actual
employment relationship will ever exist.” 166 Or App at 5-6.
On the other hand, as the Eighth Circuit has recognized:
“[I]f damages sustained in reasonable reliance on an
employer promise were not available, the effect of such
a rule would be to allow the employer to take advantage
of whatever benefits might accrue to him by his inducing
a potential employee to leave behind home and/or steady
employment while at the same time being completely free
of any obligation to keep his word.”
Bower v. AT & T, Technologies, Inc., 852 F2d 361, 364 (8th
Cir 1988). Moreover, a rule barring a promissory estoppel
(or fraudulent misrepresentation) claim would allow
an employer to abuse its ability to induce the reliance of
prospective employees. For example, an employer could
promise an at-will job to multiple people to keep them
available while the employer continued to vet them or to
prevent them from accepting a position with a competitor.
Acknowledging the possibility of reasonable reliance
“encourages employers [and employees] to take [their]
promises seriously,” id., and, more importantly, is consistent
with the law of promissory estoppel.
FRAUDULENT MISREPRESENTATION
This court has previously articulated the elements
of a common law fraud claim, also known as an action in
deceit, in more than one way, which is not surprising because
“fraud” is “ ‘a term so vague that it requires definition
in nearly every case.’ ” Riley Hill General Contractor v.
Tandy Corp., 303 Or 390, 405, 737 P2d 595 (1987) (quoting
W. Page Keeton, et al., Prosser and Keeton on the Law of
Torts § 105, 727 (W. Page Keeton ed., 5th ed 1984)). For
purposes of this case, two elements that are consistently
Cite as 353 Or 282 (2013) 297
required for a fraud claim are relevant: justifiable reliance
and damages. See Riley Hill General Contractor, 303 Or
at 405 (listing five elements of action in deceit, includ-
ing “ ‘[j]ustifiable reliance upon the representation’ ” and
“ ‘[d]amage to the plaintiff, resulting from such reliance’ ”
(quoting Keeton, Prosser and Keeton on the Law of Torts
§ 105 at 728)); U.S. National Bank v. Fought, 291 Or 201, 220-
21, 630 P2d 337 (1981) (listing nine elements of an action
in deceit, including “ ‘reliance on [the misrepresentation’s]
truth,’ ” a “ ‘right to rely thereon,’ ” and “ ‘consequent and
proximate injury’ ” (quoting Conzelmann v. N. W. P. & D.
Prod. Co., 190 Or 332, 350, 225 P2d 757 (1950))).
As noted, the Court of Appeals rejected plaintiff ’s
fraud claim because the court determined that plaintiff could
not prove the elements of justifiable reliance and damages.
The court noted that the “alleged misrepresentations * * *
simply mirror the alleged promise”—that plaintiff had
been given the corporate job—and the court had already
held both that plaintiff could not reasonably rely on that
promise and that plaintiff was not entitled to any damages
associated with that promise. Cocchiara, 247 Or App at
550-52. Thus, the reasoning the court applied to the claim
for promissory estoppel similarly applied to the claim for
fraudulent misrepresentation.
As with our analysis above of the promissory
estoppel claim, we disagree with the Court of Appeals that,
for purposes of his fraud claim, plaintiff could not reasonably
rely on defendant’s statement that plaintiff had definitely
been given the corporate job. In a fraud claim,
“[t]he principal argument in support of some such
requirement as justifiability of reliance would seem
to be that of providing some objective corroboration to
plaintiff ’s claim that he did rely. * * * [T]he foolish nature
of the plaintiff ’s conduct if he did rely is relevant primarily
because of the likelihood that he did not rely.”
Keeton, Prosser and Keeton on the Law of Torts § 108 at 749-
50. In this case, a jury could find that plaintiff reasonably
relied on defendant’s promise, because a jury could find that
he was planning to accept the job with the Medford Mail
Tribune—as evidenced by plaintiff notifying Summers that
298 Cocchiara v. Lithia Motors, Inc.
he planned to take that job—until defendant offered him
the corporate job.
Moreover, the standard for reasonable or justifiable
reliance in the context of fraud is both subjective and
objective:
“If he is a person of normal intelligence, experience and
education, he may not put faith in representations which
any such normal person would recognize at once as
preposterous *  * or which are shown by facts within his
*
observation to be so patently and obviously false that he
must have closed his eyes to avoid discovery of the truth,
and still compel the defendant to be responsible for his loss.
“* * * * *
“[T]he matter seems to turn upon an individual standard
of the plaintiff ’s own capacity and the knowledge which he
has, or which may fairly be charged against him from the
facts within his observation in the light of his individual
case[.]”
Keeton, Prosser and Keeton on the Law of Torts § 108 at 750-
51 (footnote omitted). “Normal” people rely on offers of at-will
employment every day, or at least a jury would be entitled to
so find, based on the facts in a particular case. Here, a jury
could find that plaintiff ’s reliance was not “preposterous”
or based on plaintiff ignoring an obviously false statement,
particularly given Summers’ assertion about plaintiff ’s
value to the company and his recommendation that plaintiff
turn down the Medford Mail Tribune job.
In addition, allowing fraud claims in the context of
at-will employment serves the purpose behind allowing fraud
claims: “The type of interest protected by the law of deceit
is the interest in formulating business judgments without
being misled by others—in short, in not being cheated.”
Riley Hill General Contractor, 303 Or at 407. If employers
could make misleading statements to prospective at-will
employees without liability, business judgments regarding
employment would not be protected from deceit. Business
judgments regarding at-will employment inherently involve
some risk, and a prospective employee (or employer) should
be able to evaluate that risk without the interference of
fraud.
Cite as 353 Or 282 (2013) 299
Although a prospective employee can bring a
fraudulent misrepresentation claim in the context of at-will
employment, we emphasize that there are limitations on
those claims. Most notably, a plaintiff will have to prove
damages to bring a successful claim. See, e.g., Riley Hill
General Contractor, 303 Or at 405 (listing damage to the
plaintiff as an element of a fraud claim). Nonetheless,
plaintiff ’s decision to plead only damages associated
with the loss of the corporate job—rather than damages
associated with turning down the Medford Mail Tribune
job—does not defeat his fraud claim, as the Court of Appeals
suggested. See Cocchiara, 247 Or App at 552. As noted, the
at-will nature of employment does not create a conclusive
presumption barring a plaintiff from recovering future lost
pay where the employee has been unlawfully terminated
from the job, Tadsen, 324 Or at 470-71, or, as in this case,
where plaintiff was never hired as promised or allowed
to start work. Because this case was decided on a motion
for summary judgment, however, whether plaintiff can
sufficiently prove his damages associated with not being
hired for the corporate job is not now before this court.
For those reasons, the Court of Appeals erred in
determining that, as a matter of law, plaintiff could not
reasonably rely on defendant’s representations and could
not recover future lost wages solely because of the at-will
nature of the corporate job. We emphasize that our holding
goes no further, and we express no view as to whether
plaintiff ’s reliance was in fact reasonable, whether plaintiff
can satisfy the other elements of his promissory estoppel and
fraudulent misrepresentation claims, or whether plaintiff is
entitled to recover his claimed damages.
The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.