Employment Agreements and Fraudulent Misrepresentation?

Quite often Employees and Employers engage in oral discussions relating to their employment terms. Often oral statements are made relating to qualifications, experience, relocation expenses, length of employment, compensation and a variety of similar matters.  Employers have been routinely allowed to use any false statements about an Employee’s qualifications and/or experience to justfy a subsequent discharge. 

Now, Illinois Courts are recognizing that an Employee has a basis to assert fraudulent inducement based on oral misrepresentations.  Illinois courts are finding a scheme to defraud based on oral statements (saying no demotion) and actions that indicate the opposite intent by an Employer (having the demotion papers being processed at the same time).  See. Kamboj v. Eli Lilly and Co., 2007 WL 178434 (N.D. Ill. 2007) (promise of a certain job title and a certain range of salary/benefits prevented a summary judgment on the employee’s claim) and Quake Construction Inc. v. American Airlines Inc., 141 Ill. 2d 281, 565 N.E.2d 990 (1990). 

Thus, Employers should be more cautious about what they may say to Employees during the hiring process.  A misstatement may tie up the Employer in litigation that could have been avoided.  On the other hand, Employees now, have a means of recourse for oral misstatements by Employers.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s