Fraud and Misrepresentation

The employment attorneys at Minnis & Smallets represent victims of fraud and misrepresentation in the workplace.

California law protects workers from intentional fraud by employers. Fraud occurs when an employer makes a misrepresentation about the terms and conditions of employment. When an employee relies on the misrepresentation to accept or continue employment, the California employment lawyers at Minnis & Smallets can help the defrauded employee pursue justice.

When does an employer commit fraud?

Fraud in the employment context generally occurs before the employment relationship begins (pre-hiring) or during the employment relationship. An employer may be liable for fraud or misrepresentation when:

• the employer makes a misrepresentation as to a past or existing fact regarding the terms or conditions of the job, the compensation to be paid, the kind of work to be performed, or some other material fact
• the employer knows the representation is false or makes the representation recklessly, with the intent to deceive the employee
• the employee reasonably relies on the statement
• the employee is harmed by acting in the belief that the statement was true

In some cases, an employment fraud claim can be based on an employer’s decision to conceal important facts that only the employer knows, particularly when the employee expresses a desire to consider those facts when deciding whether to accept or continue employment.

In addition, fraud may include making a promise that the employer does not intend to keep.

What are typical employment fraud claims?

Most legal claims for employment fraud involve false statements that induce an employee to relocate to accept an offer of employment. Employees are harmed when they forego other employment and incur the expense of relocating, only to find that the employer’s statements or promises about the job are false.

Other employment fraud lawsuits are based on false promises that induce an employee to stay in a job. “We’ll give you a raise in three months” or “We’re firing the supervisor who harasses you” are examples of misrepresentations that an employee might rely upon to continue employment. Employees are harmed when they turn down better job offers because they have been told that the conditions in their current job will improve.

What are “terms and conditions of employment”?

Promises that an employer makes about compensation, the nature of the job, or working conditions concern “terms and conditions of employment.” Examples of fraudulent promises or statements about the terms and conditions of employment include:

• Promising a higher salary than the employer actually pays.
• Promising to pay a guaranteed bonus that the employee never receives.
• Promising to use a specified formula to calculate commissions while actually calculating them using a less favorable formula.
• Promising to provide benefits (such as paid vacation or use of a company car) that the employee never receives.
• Promising that the employer has sufficient work to keep the employee busy and fully engaged.
• Making false statements about job duties or the kind of work the employee will be performing.
• Making false statements about the employer’s customers or sales.
• Making false statements about the quality of the employer’s products or services.
• Making false assurances that the employee will work under conditions that are healthy and safe.
• Promising a promotion within a specified time if the employee meets performance expectations, and failing to promote the employee despite satisfaction of those expectations.
• Failing to disclose important facts or information that are known or only accessible to the employer. Telling the employee that the employer is financially secure when it is not.
• Misrepresenting facts that induce an employee to take early retirement.

Any other intentionally false statement or promise about the job will entitle the employee to seek a legal remedy for fraud if the employee relied on the statement or promise when deciding to accept or continue employment.

What compensation can employees who are subjected to employment fraud obtain?

Employees who did not receive what they were promised are entitled to compensation. The measure of compensation depends on the facts of the case. Typically, employees are entitled to damages resulting from their reliance on the employer’s misrepresentation. Examples include lost salary and relocation expenses. The employee may also be entitled to recover damages for emotional distress.

A California law authorizes an employee to recover double damages if the employee proves that he or she has been induced by the employer to relocate or change residences based on misrepresentations by the employer as to the nature of the employment or the compensation to be paid. Other kinds of compensation, including punitive damages, may also be available in some cases.

Where can I get legal help?

Fraud and misrepresentation in employment can have a serious financial impact on employees. The employment lawyers at Minnis & Smallets help defrauded employees achieve justice by recovering the compensation they deserve. If you believe you were subjected to fraud, either pre-hiring or during your employment, you can learn more by calling our office at 415-551-0885 or by submitting our online contact form.