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...theories that make this growing area of employment law include fraud, fraudulent inducement, misrepresentation, negligent hiring, and failure to disclose. As disgruntled employees learn of this potential redress against exaggerating employers, a trend in the law seems to be developing. This area of employment law will most certainly curtail employers who make grandiose representations concerning employment and then fail to live up to those promises. But, the trend is also disturbing to employers who normally describe job opportunities to potential and present employees. As a result, employers and employees alike are beginning to ask what can be promised or described in job or promotion interviews. And, just as employers carefully review prospective employee's resumes, the prospective employees may begin to scrutinize the employer's representations.
This paper will explore the origins of Truth-in-Hiring law, the recent cases holding an employer liable for not being truthful, and the possibility of this trend extending into other jurisdictions. In addition, the paper will examine what employers can do to protect themselves from a claim of fraud in hiring.
Case Development
In most of the cases that have supported claims for truth-in-hiring, employers made promises or statements they knew or should have known were false about a job. These false statements were then relied upon by potential employees who accepted positions and gave up opportunities elsewhere. In many of the lawsuits, however, the employers only exaggerated career opportunities or failed to disclose certain information in order to retain old employees or hire new ones.
Previously, these facts would not have mattered. Employers and employees were bound by the employment-at-will doctrine which allowed an employee to be fired at any time for any reason unless the termination violated public policy or was in breach of an implied contract. However, truth in-hiring lawsuits are not based on the termination of the employee. Such lawsuits would be precluded by the employment-at-will doctrine. Instead, the causes of action are based on the false promises, false claims, or misrepresentations made to the employees during the recruitment or promotion process. These claims also have the element of reliance by the employees. Because they accepted jobs in reliance on the statements made to them, the employees gave up present work or the opportunity to work in desirable jobs elsewhere.
For example, in Navaretta v. Group Health, Inc., the Appellate Division of the New York Supreme Court upheld a fraudulent inducement claim made by an employee of an insurance company, who was induced into leaving her former employer to take a position with Group Health, Inc. Deborah Navaretta had been employed with her previous employer for seven years before interviewing with Group Health for the...
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