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Friday, September 2, 2011

Fake Job Offers, Phony Jobs and Employer Fraud


This question from Ask A Manager really struck a nerve for me:

Hi. I recently accepted a job offer via e-mail, handed in my notice with my current employers, a new e-mail then arrived stating my contract was being drawn up, then a few days later I receive a phone call retracting their job offer, what are my rights??? Please help.

You’d be surprised how often this happens. The mistake I see is that you gave notice before you got a signed contract. You shouldn’t give up your job unless your new offer is 100% final. That means contract signed if there is one, background check passed, and any contingencies have occurred.
It’s not unusual that people are duped into giving notice at their job, only to have the offer pulled or find out the job is nonexistent. Or maybe you’ve been lured into a job with promises of higher pay, better title, specific hours or location, and it turns out that the representations made to lure you in weren’t true. When this happens, you might have a case for fraud.
In order to claim fraud, the statement(s) must been false, and the company had to know they were false or be recklessly indifferent as to their truth or falsity. You must have relied on the false statements and changed your position. The company will probably claim that the person who made the representations believed them to be true at the time. Cases like this can require massive discovery, time and expense.
Another theory you might have to pursue against these unscrupulous employers is tortious interference with your employment relationship. I haven’t seen any cases attempting this type of claim, but it might be viable in your state. Basically, the theory would be that the phony employer interfered with your employment, knowing that you would lose your job, and that they were reckless or negligent in their behavior.
I’d be interested in hearing from other lawyers who have brought or defended this type of case to see what happened.
The sad truth is that, with at-will employment, you could work one day and they could decide you were a “poor performer” or “didn’t fit in.” Mostly, switching jobs is a high-risk activity. Be careful out there. Do your due diligence on the new employer. See if they make a habit of this type of behavior. Try to find out what kind of turnover they have. Speak to current or former employees if you can.
In my view, doing this to someone should be a crime. In this anti-employee environment, I suspect it won’t happen. Still, anyone who convinces someone to leave their job in this economy with pie in the sky promises that turn out to be phony deserves to spend some time behind bars.

Donna’s tips:
a.       Get that job offer in writing. Make sure you have everything you think is essential in it. If the recruiter told you that you’d only work Monday to Thursday and you need Fridays off for a class, either make sure they put it in writing or write them a letter or email confirming the information.
b.      If the job offer is contingent, don’t give notice unless all the contingencies have been met. If you have to pass a background check, wait until they tell you that you’ve passed, then confirm that information in writing. Tell them you’re relying on that information and will be giving notice at your current job. If you get a conditional offer and you need to discuss disability accommodations, get the accommodations agreed to before you quit your job.
c.       Don’t move your house without getting some guarantees that the job will last for a minimum period of time. It’s best to have a contract saying you can only be fired for cause if you’re uprooting your family.

2 comments:

  1. Thanks for answering this, Donna! I think this question comes up for a lot of people who assume that a job offer is legally binding.

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  2. Thanks Alison! I'm glad to be able to answer your members' questions.

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