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  1. #1
    Join Date
    Dec 2007

    Default Promissory Estoppel, Detrimental Reliance

    Currently living in Italy
    Employer is based in Virginia
    I am a resident of Oklahoma

    Long post, thank you in advance.

    The U.S. Government has contracted company “A” for a project. Company “A” has contracted company “B” who in turn contracted my company to provide a security service as Security Advisors for an overseas project which intern requires Top Secret security clearances. This is not a SOFA contract, which in terms does not fall under the JTR or US State Department.

    My Situation

    In March of 2007, I received an e-mail from my current employer offering me a position as a Security Advisor on a U.S. Government program in Cascina Costa, Italy. I was told that this position was for at least a 2 years minimum, and up to 5 years should I choose to extend my stay. The offer was for a salary of just over $45,000 a year + HOLA (housing allowance) + COLA (cost of living allowance). They sent me a job offer letter that had to be signed and returned by a certain date to accept the position.

    I accepted the job, and my wife and I started preparing to relocate overseas. I was contacted by the International Project Manager in Italy, who recommended that I arrive in Italy with a minimal amount of household goods and furniture. My wife and I gave notice to our current employers, gave away most of our furniture, found homes for our pets, and brought only cloths, bed, computer, and dishes. We flew to Reston, VA. for final preparations at my employers headquarters and were promised, multiple times, that we would be employed in Italy for at least 2 years, and they hoped I would stay on longer.

    While in Reston, I met another recently hired Security Advisor who was relocating with his wife and two children to Cascina Costa along with us. We were all present when promised by our employer that we would be in Cascina Costa, Italy for two years, but also that our employer would pay for my colleagues children’s school costs as well. As this was the most important issue to him, he asked many time and was given assurance by the company that his children’s school costs would be paid for.

    Upon our arrival to Italy, we were contacted by an Italian relocation service to assist us in finding housing and completing necessary paperwork to live in Italy. She informed us that the only English speaking school was located 25 minutes away in Varese, Italy. Since the friend we had made in Reston was coming one week later to set up his apartment and schooling prior to moving his family, we choose to look at apartments in Varese when he landed in country. We were both able to locate housing in Varese, find out the price of the school, and work out a car pool to allow our wives use of the other vehicle for shopping and taking children to and from school. Because the company only allotted one vehicle per house, hold.

    When our company learned the price of the school, they claimed they had not in fact promised to pay for it, but to pay only $7,000 toward the price of the school. The price of the school, for one year, was over $17,000. They informed my friend he would have to cover the difference himself, as they could not pay more than was posted on the Department of State website. We were told that our location was classified as “other” on the Department of State website, and all allowances, including school cost, were paid according to this site. Our company claimed they had no knowledge that the school at our location was that expensive.

    We were informed by other Security Advisors at the site, and by the Italian relocation representative that they had been informed before. In fact, the last Security Manager had quit because our company refused to pay for the cost of his children’s school. Rather than quitting immediately, my friend contacted the Department of State and was able to get them to increase the allowance standard for schooling under the “other” designation.

    Over the next few months, from June threw October, we asked to be reclassified under the “Milan” rate on the Department of State website due to the cost of living in the local area. In July, our company implemented “Tax Equalization”. Before this, we had been paying Italian taxes. With this implemented, our company was to pay us for taxes paid in excess of taxes we would have paid in the U.S. backdated to January 2007. They informed us the checks would be coming shortly.

    In October 2007, our company’s Vice president and the program manager for this contract flew in to meet with their employees and ask if there was anything they could do to make our lives easier here in Italy. We asked for many things, but foremost was the date they intended to pay us the back tax money they owed us, if “Milan” rate allowances would be possible, and if the rumors of staffing cuts were true. They promised that we would not be going anywhere, and even if it did happen, we would receive severance checks and that our company would “place us back were they found us, like they found us”. Upon their return to Reston, they informed us that the back tax money would be paid prior to 15 November 2007, and that “Milan rate” was approved as of 22 October 2007. An e-mail was sent to all of us stating the amount we would be paid for HOLA/COLA on 15 November.

    On 9 November 2007, I received a phone call stating that staffing cuts had occurred and that I would need to be out of the country by the end of January 2008. I ask what the severance package was and was told, “We don’t know”. On 15 November 2007, we received e-mails stating that the amount paid to us for “Milan rate” HOLA/COLA has not been approved after all, and that the pay in our accounts would be removed with in 24-48 hours. The official approval for “Milan rate” was to be approved in 30-60 days, the time period in which myself and the other Security Advisor’s were to depart. We would be receiving a payment under “other” again in 2-5 business days. A second e-mail was received stating that they had not finished the back tax figures and we would also not be getting those checks, but that they would be paid “hopefully soon”. On 17 November 2007 our company promised that the money owed to us for back taxes would be in our accounts on or before 30 November 2007. On 28 November 2007 an e-mail was sent stating our company was still working on our back taxes and that we would be paid on or before 14 December 2007.

    On 30 November 2007 a conference call was set up to finally tell those of us affected by the RIF(reduction in force) what benefits we would get from our company. They have offered us the following only:
    1. Employee & immediate family airfare to return the US.
    2. Per diem for employee only at the "Italy, Other" rate up to three business days within Italy. Once the employee arrives CONUS their per diem allowance ceases.
    3. HHG transportation up to 18,000 lbs back to the US
    4. Temporary storage of HHG up to five business days
    5. Lease Penalty Expense (in accordance with lease agreement)
    The customer makes the determination on the number of personnel required on task. This company’s contract with the employee is outlined in the offer letter as "at-will". It is further clarified in the "Attachment 1" under Terms and Conditions, Sections #1 & #4.
    This company practices notification of termination in place of a severance package.

    I had to pay $4,000 USD as a security deposit on my apartment in Varese, Italy. As it stands now, my employer will pay to fly my wife and I back to Tulsa, Ok. They will pay to move my household goods (a bed and a computer) back to Tulsa, Ok. I will have to locate a new apartment, pay first and last month rent, pay security deposits, pay activation fees for utilities, furnish it, and pay my monthly bills. All of this while both of us looks for new employment. My employer has been very vague about even reimbursing me the security deposit I paid on my current apartment, as I have not been given enough time to give the six-month notice required to get it back.

    In short, because we chose to work for this company and believed the promises made verbally and in writing(all of which have been broken), I will be sent back to the U.S. with no apartment, no furniture, no job, and no money with which to support myself and my family.

    I believe that I have a case for: promissory estoppel, Detrimental Reliance, and/or breach of contract/breach of employment contract. I believe that they should reimburse my security deposit, pay me the back tax money they owe me, and one-year base salary. I am not even asking for base salary for the duration of the promised two years. Prior to pursuing a legal case, I will be attempting to get legal counsel to negotiate my severance package prior to my departure in January.

    I am posting this to ask if you believe I have a case. Thank you for taking the time to read it and any advice is greatly appreciated. There is more to this situation and this affects multiple employees. I have tried to hit the high points. I do have every e-mail sent to me along with other documentation and witnesses.

  2. #2
    Join Date
    Sep 2005
    Behind a Desk

    Default Re: Promissory Estoppel, Detrimental Reliance

    You have a long, complicated situation, coupled with various formal and informal promises made orally, in writing, and by reference to third party websites. There are also questions of jurisdiction, with this being an international job. I don't feel that I can offer you any useful analysis under these circumstances, and think you should consult a plaintiff-side employment lawyer.

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