Years ago, the California Supreme Court opened the door for workers to bring high-stakes lawsuits claiming employers induced them to take jobs based on false promises about the position or the company’s health. Since then, employees have filed a steady stream of claims alleging employer fraud in the hiring process—and many have won multimillion-dollar verdicts. A California appeal court has just green-lighted yet another such suit.
Employee Lured with Promise of Long-Term Job
Robert Blitz had worked for Raytheon in New Jersey for 12 years when Fluor Enterprises Inc., headquartered in Aliso Viejo, Calif., contacted him about a job opportunity on a California project. Fluor manager Doug Cheppo told Blitz the project would last two to three years and would then require ongoing maintenance.
Blitz was reluctant to relocate and leave his stable job, so he told Fluor he was interested only in permanent, not project-based, employment. After Blitz interviewed with Fluor management in California, Cheppo told him long-term employment was approved and Fluor would have a suitable position for Blitz following the project assignment.
Employee Balks at At-Will Agreement
Under pressure from Cheppo to start quickly, Blitz orally accepted the job and immediately resigned from Raytheon. It was only then that Fluor presented Blitz with a written employment agreement specifying that his employment was to be “at will.” Blitz protested, asking Fluor to modify the agreement to reflect the long-term employment promise. The company refused, although Cheppo assured him the at-will provision wouldn’t be enforced. Having already resigned from Raytheon, Blitz felt he had no choice but to sign the agreement, so he signed it, relocated, and began work at Fluor.
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About two years later, work on the project began to wind down and Blitz was terminated.
Employer Charged with Fraud
Blitz sued Fluor for fraud. He also alleged Fluor violated a California Labor Code provision that makes it a crime to misrepresent the length of employment, type of work, compensation, housing, or other aspects of a job to induce an applicant to relocate. Penalties include doubling the employee’s damages such as lost wages, plus a fine of up to $1,000 and six months in jail.
Fluor admitted Blitz was told he would have long-term employment with Fluor. However, the company argued, because Blitz signed an at-will agreement, he couldn’t introduce evidence of a prior unwritten promise, such as the promise of long-term employment, that contradicted the written terms.
Case Moves Forward
A California appeal court has now ruled Blitz can take his claims to a jury. The court explained that, generally, once a written agreement is in place, a party to a lawsuit can’t try to contradict the terms of that agreement by introducing evidence of previous oral promises. However, the court found this rule didn’t apply here because Blitz had relied to his detriment (i.e., by quitting his prior job) on Fluor’s oral representations of long-term employment before he even knew he would be required to sign an at-will agreement.
Self-Defense Tips
Inflated promises intended to snare a good job candidate can come back to haunt you if the employment relationship doesn’t work out. You can take several preventive measures:
- Don’t exaggerate. When communicating with applicants, be straightforward about what the job entails. Review all written materials you provide—such as job application forms, handbooks, and offer letters—to make sure there are no inaccuracies about job security, career prospects, or the company’s condition.
- Train managers. Everyone in your company who participates in the hiring process should know that what they say to candidates could be used against the company later on. Stress that promises of long-term employment should not be made if there’s no intent to follow through.
- Document communications. Although Fluor admitted promising long-term employment, the typical case usually involves a dispute over what was actually said. To avoid this situation, take detailed notes of all interviews and conversations with prospective employees. Put all job offers in writing, completely describing the duties, salary, and benefits, and have the employee sign the offer. Be sure to include an at-will statement and mention that no other agreements or promises have been made.