In July 2001, Steven Peters joined Gilead Sciences, a California-based pharmaceutical company, as a therapeutic specialist. He worked from his home in Indianapolis. In December 2002, Peters took leave under the
On April 25, the company sent a letter to Peters, saying that because he held a “key” position the company could not keep open, he had been replaced. When Peters refused an alternative position, Gilead fired him.
Peters sued for violations of the FMLA. In district court, Gilead claimed that Peters was ineligible for FMLA because Gilead does not employ 50 or more workers within 75 miles of the work site. The company won summary judgment.
Peters appealed, arguing that Gilead’s handbook granted to all employees who worked 1,250 hours in the prior 12 months. The company had further confirmed this to Peters in writing each time he took leave.
The 7th Circuit Court of Appeals agreed, finding that while Indiana has not ruled definitively on whether an employee handbook is an enforceable contract, the company’s promises to Peters, both in the handbook and its letters, were enforceable under promissory estoppel—a common-law doctrine invoked when someone relies on the truthfulness of a promise that turns out to have been falsely made.
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