False Promises of Employment – Fraud in the Inducement

This page is about fraudulent hiring. It details California’s employment laws on when employers tell prospective employees false promises in the hiring process – to induce them (trick them) into quitting their current job for a new one. These types of intentional misrepresentations (fraudulent inducement) are extremely common. But so are negligent misrepresentations – where an employer is reckless with the truth to the prospective employee’s detriment.

You are sitting around after work when you receive a phone call. It is the HR hiring manager for a business in San Francisco and they are looking for someone just like you. You love San Francisco and they are offering you 10% above your current salary, and you will be their new Vice-President of Operations. So you sell your LA home and move to SF. Upon arrival, you are handed a mop, a bucket and told you will be making minimum wage. Surely this cannot be legal? This is an extreme example, but it happens. People move for a job and it is not what they were sold on.

The below video and the rest of this article presents the legal basics of fraudulent inducement. Make sure you read the rest of this page after watching the video!

Fraudulent Inducement Attorney

First and foremost, there are two ways that fraudulent inducement can occur: intentionally and negligently. The difference between the two is as simple as the job offeror knowing that he or she is lying to you versus recklessly ignoring the truth of the information he or she is giving to you. If in the scenario above the HR manager knew that they were going to pay you minimum wage and have you mopping floors despite providing a description resembling a VP of Operations position, it is intentional. If the HR Manager honestly believed that you would be the VP of Operations, but should have known that was not going to be the case, then it may be negligently induced.

What do the Courts Look at in False Promise Cases

To figure out if you were induced into taking the job, the court is going to look at several things:

  1. Did the defendant tell you that an important fact was true (i.e. “You’ll be paid 10% above what you are currently make.”)?
  2. Was this information false?
  3. Did the defendant know it was false information and say it anyways, or did they honestly believe it was true despite having no reason to know?
  4. Did the defendant intend for you to rely on that information in making your decision?
  5. Did you rely on that information in making your decision and was it a big factor?

People have very different ideas of what is an “important fact,” and rightfully so, so California Labor Code § 970 has cleared this up for us. Important facts recognized include the kind, character, or existence of work; the length of employment, compensation, the sanitary or housing conditions surrounding the work, and any labor disputes that are represented (or not for that matter!).

Did you Move? CA Labor Code § 970 is Powerful

Fraud in the Inducement, False Promises of Employment, Employment Lawyer

It becomes especially egregious when an employee moves from one location to another to take a job based on false promises. LC § 970-972 directly address this problem. If an employer induces someone to move based on false promises, that employer may be liable for double damages and guilty of committing a misdemeanor.

Though fraudulent inducement is not as common as discrimination, harassment, or a variety of other claims, it is still a huge hassle for someone who comes across it. People have uprooted their entire lives, changed their kids’ school, and usually have left a job, because they trusted their new employer. If you feel as though you have been given misrepresentations about a job you recently changed locations for, you should to contact a good employment lawyer as soon as possible.

 

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