Fraudulent Misrepresentation: Employers’ Hidden Hiring Interview Flub

When recruiting a top-notch job candidate, hiring managers must not give into the temptation to embellish or conceal facts that are important to the candidate’s decision-making.  While accentuating the positive is certainly legal, providing false or misleading information could be considered fraud.



The truth is that an employee who relies on misinformation provided by an employer during the hiring and recruiting process can file a claim of fraud, fraudulent misrepresentation, or negligent misrepresentation.

Fraudulent answer #1: Before relocating to accept a sales manager position, a job candidate specifically asked a company official about the company’s financial situation.  Based on assurances that the company was in good financial health, the candidate accepted the job.  When he was fired a year later, he sued for breach of contract, fraud, and negligent misrepresentation.  He presented evidence that the company had not made a profit in more than six years at the time he interviewed for the job.  A court ruled that the company committed fraud by failing to disclose the company’s financial troubles and awarded him more than $44,000 in damages for his real estate and relocation expenses.  (Geyte v. The OFIS, D.C. TX, No. 200619083, 2007)

Fraudulent answer #2: When a job candidate asked a number of questions about the company’s financial stability and future, an executive explained that the company had a long-term contract with a customer that would generate substantial profit and make it financially secure.  After leaving his old job and accepting the new position, the employee found out that the customer had terminated its contract and the executive with whom he interviewed knew about it.  When the employee was fired eight months later, he sued for fraudulent misrepresentation.  A court allowed the case to proceed, ruling that employers have a duty to refrain from giving false or misleading information to a candidate during the hiring process.  (Stehm v. The Nordam Group, Inc., OK Ct. App., No. OK CIV APP 94, 2007)



Fear of fraud claims if the company doesn’t live up to its rosy outlook does not mean that an employer can’t be positive or optimistic when trying to convince a job candidate to leave his/her present company to work for yours.  It does mean that candidates’ questions must be answered truthfully and accurately.

Hiring for Attitude D

Training on hiring interviews should cover not only the types of questions that managers should and should not ask, but also the types of questions managers will likely be asked.  Managers should be prepared to answer questions on job security; advancement opportunities; and the company’s financial stability.  They should not try to wing it.  It could lead to making overblown statements or forgetting significant details.

If they are unsure of how to respond to a question, they should tell the candidate they will get back to them ASAP after the interview — and then do so.  Or, if the candidate is willing to wait, the manager can place a quick phone call to the appropriate person after the interview wraps, but before the candidate leaves.