In California, fraudulent inducement of employment is when an employer makes false promises so that you move in order to take a job or to keep the one you have. If you are fraudulently induced into moving to take or keep a job, you have legal recourse.
Fraud is an exception to at-will employment. You may have been wrongfully terminated.
What is fraudulent inducement of employment?
Fraudulent inducement of employment is when an employer tricks you into moving in order to work for it. This can happen in 2 different situations:
- tricking you into moving in order to take a new job, or
- getting you to move in order to keep your current job.
Fraudulent inducement of employment is prohibited by California employment law.[1] It involves the following elements:
- the employer made a representation about an important fact concerning the job,
- that representation was not true,
- the employer knew that it was not true when it was made,
- the employer intended that you would rely on that false statement,
- you reasonably relied on that false representation and moved for the purpose of working for the employer,
- you were harmed, and
- your reliance on the misrepresentation was a substantial factor in causing your harm.[2]
It is up to you to prove these elements by a preponderance of the evidence.
Importantly, the law covers both permanent and temporary moves.
For example: The employer’s agent told prospective workers that there was one or two weeks of full-time work. The 44 people who took the job were all let go within 3 days because there was nothing left to do. The employer also falsely represented that it would cover the workers’ return trip of nearly 400 miles.[3]
However, note that fraudulent inducement must be knowingly or intentionally done. Negligent misrepresentation does not suffice.
The law was designed to protect migrant workers from exploitation.[4] They often rely solely on their prospective employer’s promise of work. They are also less likely than others to establish an attorney-client relationship and file a legal claim if they have a legal issue related to the employment agreement.
The employment lawyers at our law firm have helped numerous prospective employees pursue legal actions against the hiring managers that included a fraudulent misrepresentation in their job offer.
What do the false promises have to be about?
For it to be fraudulent inducement, the false promises must be about important facts concerning the job. These include statements concerning:
- the kind, character, or existence of the job, including the working conditions or workers’ compensation coverage,
- how long the work will last, such as promises regarding job security,
- the compensation for the work to be performed,
- the sanitary or housing conditions relating to or surrounding the work, and/or
- whether there is a strike or other labor dispute among current employees concerning the job that you would perform.[5]
For example: A recruiting agent for a farm tells Manny that the pay will be $16 per hour. When Manny gets his first paycheck, though, he sees that he is only being paid $12 per hour in his current position.
These false pretenses can be made:
- verbally or orally,
- in writing, including in the employment contract, or
- in the job advertisement.[6]
With the legal advice of our employment attorneys, numerous victims have brought fraud claims against their new employer in California.
What if I am an at-will employee?
Fraudulent inducement of an employee is an exception to at-will employment.
At-will employment is an employment relationship that can be terminated at any time, for any lawful reason. It can be terminated by either the employer or the employee.
However, there are several exceptions to at-will employment. If one of these exceptions applies, terminating an at-will employee can be a wrongful termination.
One of those exceptions is when the employee was fraudulently induced into moving in order to take the job.
If you were fraudulently induced into moving in order to work for your employer, then you have legal recourse.
What recourse do I have against my employer?
In California, you can file a labor claim against your employer for fraudulent inducement of employment.
If you can prove the elements of fraudulent inducement, you could recover double damages from your employer. This is twice what you would have earned, had your employer not misrepresented the job to you.[7]
In addition, you can file a police report. Fraudulently inducing an employee into moving to take or to keep a job is a crime in California.[8] However, this is unnecessary for filing a civil lawsuit for compensation for your lost wages.[9]
Is fraudulent inducement of a worker a crime?
Yes. Individuals who violate California Labor Code § 970 LAB by fraudulently inducing an employee can face criminal charges. These offenses are misdemeanors. Convictions carry:
- up to 6 months in jail, and/or
- between $50 and $1,000 in fines.[10]
This is in addition to civil liability for the fraudulent inducement claim.
Additional Reading
For more in-depth information, refer to these scholarly articles:
- Deceitful Employers: Common Law Fraud as a Mechanism to Remedy Intentional Employer Misrepresentation in Hiring – Willamette Law Review.
- Fraudulent, Negligent, and Innocent Misrepresentation in the Employment Context: The Deceitful, Careless, and Thoughtless Employer – Campbell Law Review.
- Enticement of Employees – Business Law.
- Fraudulent Inducement and Employer Liability: “A Chink in the At-Will Employment Doctrine Armor?” – Journal of Individual Employment Rights.
- Employer beware: truth-in-hiring may be the new standard in recruiting – Business Forum.
Legal References:
[1] California Labor Code 970.
[2] California Civil Jury Instructions (CACI) No. 2710.
[3] Facts from Collins v. Rocha, 7 Cal.3d 232 (1972).
[4] Tyco Industries, Inc. v. Superior Court, 164 Cal.App.3d 148 (1985).
[5] California Labor Code 970.
[6] Same.
[7] California Labor Code 972.
[8] California Labor Code 971.