James Doe interviewed for a position with the Chicago Transit Authority (CTA). He interviewed at their offices and during a break in the interview process, he was introduced to and briefly talked with the person who, if he was hired, would be his supervisor, Jane Smith. The HR Manager overseeing the hiring process brought Doe to her office in the building and then left the room to check on the person who would be conducting the next formal interview. Before they left, Smith was introduced to Doe by the HR Manager who stated that it would be a good idea to meet during this break since Doe would be working for Smith, if he was hired.
As they talked, Smith indicated that she thought Doe would be a good fit in her department and offered Doe a salary of $79,500 to take the job. Smith told him that it was a good salary and he should take it without negotiating because her feelings would be hurt and she might take any negotiating into account when determining his yearly raises in the future. She said in a joking tone, but Doe believed that she meant what she said. When the HR Manager came back to get Doe, Jane told the manager in front of Doe that it would be a good fit and to get Doe hired as soon as possible because they already talked about the job. The HR Manager nodded her head in a noncommittal manner and takes James to the next part of the interview.
James was offered a position at the end of the interview process and immediately accepted the offer. Because of his earlier talk with Smith and the HR Manager's response to Jane's statement to her, Doe did not discuss the salary when the offer was made and he accepted it. Doe was merely told to return the following day to fill out the paperwork by the HR Manager as he left.
Under CTA's policies and procedures, only the Placement Department could actually give final salary offers. When Placement's figure for James’s salary was computed, it was lower ($60,000), and this was the amount James was actually offered when he returned the next day to fill out the paperwork.
James sued to receive the higher salary offered by Smith. CTA claims that Smith had no authority to offer a particular salary and that it is not bound by her offer.
a. Discuss the legal issues under these facts from both CTA's and Doe's perspectives. (In doing so, please be sure to address what authority is and why it matters in this situation. What do you think each party will say about Smith’s actions?)
b. Who is likely to prevail if the case goes to trial? Why? (Is there any support for your position found in the cases referenced in the text? If so, be sure to discuss it)
c. Is there a way for CTA to honor Smith's offer after it found out about it? What is this called and how would it work?
d. Do you think the law, as you explained it, is fair? Please be sure to explain why or why not?
Full Answer Section
Doe, on the other hand, will likely argue that Smith did have the authority to make the offer because she was acting within the scope of her employment. Doe will also likely argue that Smith's offer was binding because Doe reasonably relied on it.
The court will likely consider the following factors in determining whether Smith had the authority to make the offer:
- Smith's job title and position within CTA
- Smith's past practice of making salary offers
- The circumstances surrounding the offer, including the fact that Smith was Doe's prospective supervisor
- Doe's reasonable reliance on the offer
If the court finds that Smith did have the authority to make the offer, then CTA will be obligated to pay Doe the $79,500 salary.
b. Who is likely to prevail if the case goes to trial? Why? (Is there any support for your position found in the cases referenced in the text? If so, be sure to discuss it)
I believe that Doe is likely to prevail if the case goes to trial. The court will likely find that Smith had the authority to make the offer because she was acting within the scope of her employment. Doe also reasonably relied on the offer, and he would suffer harm if he is not paid the $79,500 salary.
The cases referenced in the text support Doe's position. In Rubin v. Irvington Hospital, the court held that a hospital was bound by an offer of employment made by a nurse manager, even though the nurse manager did not have the formal authority to make such an offer. The court reasoned that the nurse manager was acting within the scope of her employment when she made the offer, and that the employee reasonably relied on the offer.
In Harris v. Atlantic Coast Airlines, the court held that an airline was bound by an offer of employment made by a recruiter, even though the recruiter did not have the formal authority to make such an offer. The court reasoned that the recruiter was acting within the scope of her employment when she made the offer, and that the employee reasonably relied on the offer.
I believe that the court in this case will reach a similar conclusion and hold that CTA is bound by the offer made by Jane Smith.
Sample Answer
The legal issue in this case is whether Jane Smith had the authority to offer James Doe a salary of $79,500. CTA claims that Smith did not have the authority to make this offer, and that it is not bound by her offer. Doe, on the other hand, claims that Smith did have the authority to make the offer, and that CTA is therefore obligated to pay him the $79,500 salary.
Authority is the power to make decisions and take actions on behalf of another person or organization. In this case, the question is whether Smith had the authority to make a binding offer of employment to Doe on behalf of CTA.
CTA will likely argue that Smith did not have the authority to make the offer because she is not a hiring manager. Only the Placement Department has the authority to make final salary offers. CTA will also likely argue that Smith's offer was not binding because it was made in jest.