What can happen when an employer makes and then rescinds a job offer? Ask the University of Minnesota and Gophers’ basketball coach Tubby Smith, who recently had a jury call a $1.25 million foul on them.
Upon being named head men’s basketball coach in 2007 for the University of Minnesota, Tubby Smith contacted Jimmy Williams, assistant coach at Oklahoma State University, and former Gophers assistant coach in the 1970’s and 80’s. After a personal interview and a follow-up telephone call with Smith, Williams quit at Oklahoma State, put his house on the market and got ready to return to Minnesota.
The next day, Athletic Director Joel Maturi told Smith not to hire Williams because of his involvement in 15 major NCAA rule violations as a Gophers coach. Smith informed Williams, who was then left without a job at either school. He eventually sued the University and Coach Smith for promissory estoppel, which addresses the following circumstances:
- Party One makes a promise which should reasonably be expected to induce reliance by Party Two;
- Party Two actually relies on the promise; and
- Injustice can be avoided only by enforcing the promise.
Coach Smith claimed he knew nothing about the violations and was disappointed that Williams had not disclosed them. In addition, both he and Maturi denied that an offer was made since Maturi had the final say. Williams countered that it was customary in the coaching industry for the head coach to have full authority to hire assistants. Thus, Williams reasonably relied on Coach Smith’s offer.
The jury decided that Smith did not fairly represent the extent of his hiring authority.
They found that it was reasonable for Williams to rely on Smith’s representations, and that such reliance caused harm requiring $1.25 million in damages. Not surprisingly, the University is considering an appeal.
Despite the big time college athletics setting, all Minnesota employers can learn these lessons:
- Be precise when communicating a job offer, disclosing any limitations or contingencies (e.g. background check, drug test);
- Send an offer letter or document the proposal in some other fashion to be sure that there is no misunderstanding about the terms.
- Finally, know the limits of your authority. Don’t promise more than you can deliver and anticipate that applicants will rely on what you say.