Be Careful Selling Your Next Job

An employer may be liable for statements made to a prospective employee during recruitment on which the employee relies. (See, e.g., Lazar v. Superior Court (1996) 12 Cal.4th 631; Helmer v. Bingham Toyota Isuzu (2005) 129 Cal.App.4th 1121; Toscano v. Greene Music (2004) 124 Cal.App.4th 685).  It is actually a misdemeanor for an employer to knowingly make false representations about a position (its duration or the kind and character of the work) to induce an applicant to move from one place to another to take the job. (Labor Code sections 970 et seq.)  And it can lead to civil liability in the form of double compensatory damages for the aggrieved party.

Furthermore, the covenant of good faith and fair dealing is implicated and applies within an employment offer. Thus, an applicant who cannot establish that the employer committed fraud or made a knowing misrepresentation may still recover on the basis of the employer’s bad faith and the applicant’s detrimental reliance. (See Sheppard v Morgan Keegan & Co. (1990) 218 Cal.App.3d 61 (plaintiff accepted employer’s employment offer, which required relocating; before plaintiff began work, employer terminated plaintiff’s employment). See also Comeaux v Brown & Williamson Tobacco Co. (9th Cir; 1990) 915 F.2d 1264 (after applicant relocated for job, employer informed him that his credit history precluded employment; court reasoned that, even though employment was terminable at will as provided in employment application, parties’ negotiations leading up to job offer determined terms of relationship before “at will” provision was to take effect; employer liable for reliance damages).
Thus, to minimize potential liability during the recruitment and offer stage, employers should ensure that person conducting recruitment and interviews are cautious in how and what they communicate.  The best way is to create and use a script regarding what can be communicated about the employment position regarding compensation, bonuses, benefits, anticipated company growth, and promotional opportunities. Having all involved in the recruitment and hiring process use the same script ensures that key employment terms are represented uniformly to applicants, interviews, and offer recipients, alike.