When an employer intentionally or recklessly misrepresents materials facts, which the employee reasonably relies upon, this can create a claim for fraud. Most employment cases involve “fraud in the inducement,” that is, fraudulent statements made in order to induce an employee to accept a job. An example would be when an employer represents that a position is permanent, when in fact the position is meant to simply cover the temporary leave of absence for another employee.

Fraud claims can also involve the concealment of material facts, or false promises which the employer does not intend to keep. In addition, Labor Code Section 970 also provides a specific remedy for misrepresentations intended to convince an employee or potential employee to move by misrepresenting a variety of factors including the kind, character or existence of work, length of time of the work, sanitation or housing, and existence or non-existence of a strike. This statute was originally passed to protect farm workers but the law has much broader application and has been used to protect employees performing all types of work in a variety of industries.

Employees who believe they have fraud claims should also look at whether they have claims for breach of contract or equitable claims, such as for promissory estoppel.

Siegel LeWitter Malkani has been protecting employees against fraud in the workplace including as follows:

  • In 1999 we represented Alisa Behne in Behne v. Microtouch (Northern District of California) which was at the time believed to be the largest employment fraud case reported. We obtained a $2,640,000 verdict against her former employer for fraudulently inducing her to take a job with the company. The case was reported in the press around the country and set off a discussion in the press and elsewhere about what the duties of an employer are in recruiting an employee, especially in the high tech marketplace. The trial court attempted to reduce the verdict, but in 2001 the entire verdict was upheld by the Ninth Circuit Court of Appeals.
  • We have represented a variety of other employees in fraud claims against their employers, especially in industries that are willing to “say anything” in order to get an employee on board, regardless of the truth or consequences of their misrepresentations.

If you believe you have been subjected to fraud or misrepresentation in the workplace, please contact Siegel LeWitter Malkani.

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