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Don’t oversell job openings; you’ll risk a fraud lawsuit

by on
in Employment Law,Hiring,Human Resources

Issue: Misrepresenting a job offer by failing to disclose key facts or overselling the position.

Risk: Hiring managers who don't tell the full story about a job could expose the organization to a fraud lawsuit.

Action: Give the straight story about job openings. Avoid the temptation to lure star applicants by painting an overly rosy picture.

In the rush to encourage promising applicants to accept a job, many hiring managers make misleading statements that imply permanence, job security or long-term commitment. Don't let that happen to you.

By making just one faulty promise to an applicant, you could unintentionally create an employment contract with that person. Or, fact-fudging could put you on the wrong end of a fraud lawsuit.

If a prospective employee surrenders something of value to accept a job, as in the following case, courts will act stricter in enforcing the implied promises.

Recent case: Pierre Arboireau accepted a job at Adidas, relocating his family from France to Oregon. Six months later, Adidas moved the position overseas, terminating Arboireau's job in Oregon.

He sued, alleging breach of contract and fraud, claiming Adidas promised him the position would last for at least two years. Arboireau included the notation, "Minimum duration: 24 months" in his e-mail job acceptance.

While a lower court dismissed his fraud claims because the company's offer letter included an at-will provision, a federal appeals court sent the case to trial. It said a jury could find that Adidas intentionally misrepresented the position by failing to reveal that the job could relocate and failed to refute Arboireau's 24-month notation.

Note: While the 9th Circuit decided the case under Oregon law, other states also prohibit organizations from misrepresenting jobs to coax applicants. (Arboireau v. Adidas- Salomon AG, No. 02-35398, 9th Cir., 2003)

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