In New York, fraudulent inducement of employment happens when an employer engages in intentional misrepresentation in connection with offering employment or advancement to an individual. The employer must have made a material misrepresentation or have omitted to state a fact that they knew to be false in order to persuade or induce a person to take a new job or assignment or stay in an existing position.
A person who has been the victim of fraudulent inducement of employment may have grounds to sue the employer. They would want to have a legal consultation in New York with a New York lawyer to gain a better understanding of fraudulent inducement of employment and whether they have a case.
The duty not to engage in fraud to obtain a contract is separate from the duty to perform a contract that has already been agreed to. Breach of contract happens when one party fails to provide the performance that they promised under the contract. Fraudulent inducement of employment relates to the accuracy and truthfulness of the parties’ negotiations prior to making a contract in connection with employment.
What Are Some Examples of Fraudulent Inducement of Employment?
Fraudulent inducement must involve an employer communicating false statements about important aspects of a job to an employee or prospective employee. For example, statements about the following might qualify:
- The existence of a real job opportunity, possibly with attractive benefits such as generous pay and appealing working conditions
- The nature of the work that the prospective employee would do
- The conditions under which an employee would work
- Whether the job would be covered by workers’ compensation
- The length of the employment, e.g., promises of job security
- The compensation for the work to be performed,
- The safety and cleanliness of housing offered as an employment benefit or of the worksite
- Whether a strike or other labor conflict is currently in progress in connection with the job.
- The employment benefits that would be provided, e.g., health insurance coverage.
For example, a recruiter for an agricultural enterprise tells a prospective employee that if the employee moves to another state, they will be paid $23.00 per hour. When the prospective employee accepts the job and moves to another state at their own expense, they receive their first paycheck and discover that they are being paid only $15.00 per hour. The employee was victimized by a fraudulent misrepresentation about their pay rate.
What Are the Elements of Proof?
Fraudulent inducement occurs when a party to a contract is persuaded to enter into an employment contract because of the intentional fraud of the other party. In order to succeed with a fraudulent inducement claim, the plaintiff must come forward with clear and convincing evidence of the following:
- The employer makes a material misrepresentation of fact.
- The employer knows the misrepresentation to be false.
- The misrepresentation is made with the intention of inducing an employee or prospective employee to rely on it.
- The prospective employee does rely on the misrepresentation.
- They suffer harm as a result of relying on the misrepresentation.
What Type of Evidence Might Help My Case?
The statement made by the perpetrator must be a statement of fact and not just an opinion. If the statement made by the perpetrator contradicts what is represented in a written contract that the parties have signed, then the claim for fraudulent inducement cannot succeed. It would be helpful if the victim has something in writing to prove the fraud.
Another element is the knowledge by the party who made the misrepresentation that it was false and that they intended for the victim to rely on it.
The law requires that the reliance on the part of the victim be justified. The victim must be prepared to show that they were justified in relying on the false statement or omission of material factual information. A court is going to consider all of the circumstances surrounding the situation in determining whether the plaintiff’s reliance was justified.
For example, if the perpetrator makes a claim of the type a reasonable person would not have believed or relied on, then a victim’s claim for fraudulent inducement would not be successful.
In addition, a victim should understand that if the misrepresentation was oral and was contradicted by a provision in a subsequent written agreement, this would undermine the victim’s claim that a false representation of material fact was made on which they relied. A victim is expected to read any contract they sign and would be responsible for knowing what their contract states.
When a victim brings a fraudulent inducement claim in court, they must provide enough evidence to prove the fraud. Therefore, the victim would be in the best position if the fraudulent misrepresentation can be proven with documents in writing. It might be proven by communications in a contract, a letter, an email, or a text message. Without written proof, it would be difficult for the victim to succeed with their claim, but not impossible.
If, in the end, fraudulent inducement cannot be proven, the victim might always sue for breach of contract, the failure of the employer to perform as promised in an employment agreement.
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How Much Can I Get if I Sue My Employer for False Promises in New York?
A party that succeeds in proving fraudulent inducement of a contract is entitled to various forms of relief depending on the circumstances of their particular case and the damage they choose to pursue. Possible remedies include rescission of the contract and out-of-pocket damages.
The measure of damages would be an amount that compensates the victim for their losses, and not what they might have gained if the misrepresentation had been true. Rather, damages are awarded in an amount that would put the victim back in the position they were in before they were victimized by the fraud of the defendant.
Are There Any Defenses to a Fraudulent Inducement of Employment Claim?
One defense would be to counter the evidence the victim offers to support the elements of a cause of action for fraudulent inducement. For example, a perpetrator might claim that any misrepresentation made was not material, i.e., it did not address a fact that was of importance to the deal. Rather, the fact was only of secondary or limited importance.
The perpetrator could attack the plaintiff’s claim that their reliance on the misrepresentation was reasonable. Or, they could deny ever having made a misrepresentation if the plaintiff’s only evidence is testimony to the effect that an oral statement was made.
Generally, it is not enough to point to the fact that the defendant failed to perform what they promised in a contract for the purposes of showing a false statement. That would simply be a breach of contract. When somebody says that they will perform an act in the future, it is only fraudulent if they made the statement with the undisclosed intent not to perform the promise.
Again, if a plaintiff is successful, the measure of damages is compensation for amounts actually lost because of the fraud. For example, a victim may only recover an amount that would compensate them for losses they suffered, e.g., if they moved to take a new job, their moving expenses would be a loss that could be compensated by damages.
Do I Need an Attorney for a Fraudulent Inducement of Employment Claim?
If you believe that you have been the victim of fraudulent inducement of employment, you want to consult a New York employment lawyer. LegalMatch.com can connect you to a lawyer who can review the facts of your situation and help you determine if you have the elements of a cause of action. With LegalMatch, you can get answers to your questions and move forward with confidence if you have grounds for a complaint.
