Attorney’s Fees Award Allowed In Promissory Estoppel Cases

Promissory estoppel, in its most elemental form, is a legal theory that employees can assert when they suffer financial losses because they reasonably relied to their detriment on promises made by their employer.

From 1969 to 2001, Robert Fraser worked for Edmonds Community College performing general maintenance work. He intended to work until 2011 when he would turn 65. In 2001, the college’s Senior Vice President and Chief Financial Officer moved him to a temporary exempt position as a Maintenance Services Manager. By moving to this position, he lost his retirement benefits under the State of Washington PERS I retirement system. Fraser learned, that through a change in state retirement laws, he could retire and be rehired by the college as a permanent manager and continue to accrue his retirement without losing the retirement he already earned.

Fraser was told by the college’s Senior Vice President that he could retire on April 30, 2002 and would be rehired on June 1, 2002 in the new position. Relying on this promise, Fraser retired on April 30, 2002. When he reapplied for employment, the college denied his application. Fraser sued the college alleging that he retired and reapplied for employment relying on the college’s promise that he would get the permanent management position. After he won at trial, Fraser asked the court to award him attorney’s fees under RCW 49.48.030. That statute allows an award of attorneys fees to an employee that sues for wages or salary. The trial court disagreed. The trial judge felt RCW 49.48.030 did not apply to cases brought under a promissory estoppel theory. Fraser appealed. The appellate court found in his favor holding that Fraser was entitled to an award of attorney’s fees, just as he would be if he had been denied sick pay, back pay, front pay, sick leave or commissions.

The Bottom Line

Employers need to understand that the failure to pay wages and commissions can and will result in the award of attorney’s fees in addition to the wage claim. In many cases, the attorney’s fee award can exceed the amount of the wages owed. Here, the court used RCW 49.48.030 to award attorney’s fees, however, other statutes also allow the award of attorney’s fees for the failure to pay wages and, in some instances, double the wage award.

Nothing in this blog should be considered legal advice. The information that is provided is general in nature. Nothing can substitute for a consultation with a legal professional who can address your particular legal concern.