Interviewer’s Loose Lips Can Lead to Employer Liability

interview_80608276Employers need to be very careful what their interviewers say to job applicants. Off the cuff statements like “we have the most competitive salaries” or “the best benefits” and “we assure growth” may be fodder in a suit for misrepresentation.

The rule of thumb when it comes to interviewing a job applicant is this: employers should make only factual representations that can be proved.

Here are a few specific dos and don’ts to help employers avoid potentially costly misrepresentations in job interviews:

  1. Don’t falsely induce employee relocation. It’s a misdemeanor for an employer to knowingly make false representations about a position (its duration or the kind and character of the work) to induce an applicant to move from one place to another to take the job. Lab C §§970-971. And there’s a big stick associated with this misrepresentation: whatever damages the plaintiff is awarded for being misled into relocating are doubled. Lab C §972.
  2. Don’t make job offer representations in bad faith. A covenant of good faith and fair dealing is implied in an employment offer. This means that a job applicant who can’t show that the employer made a knowing misrepresentation may still recover based on the employer’s bad faith and the applicant’s detrimental reliance.
  3. Do create and use a checklist of the terms of employment. To minimize the risk of misrepresentations during recruitment, employers should create a written checklist of matters on which a prospective employee for that position might rely in accepting employment, such as compensation, bonus, benefits, sales prospects, product features, anticipated company growth, and promotional opportunities. Having all interviewers use the checklist ensures that key employment terms are represented uniformly to applicants.
  4. Do include an integration clause in employment contracts. Employers can minimize liability exposure for misrepresentation by including an integration clause in the employment contract such as this one:

This Agreement sets forth all the terms and conditions of employment. Employee acknowledges that no other oral or written promises were made to him or her on which he or she is relying in accepting employment.

Check out all hiring guidelines, as well as the pitfalls involved in hiring, in CEB’s Advising California Employers and Employees, chapter 1. And more dos and don’ts for interviewing and hiring are covered in CEB’s program Essential Employment Law Issues: Hiring & Employment Agreements; Employee Handbooks & Policy Documents, available On Demand.

Other related CEB blog posts:

© The Regents of the University of California, 2013. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

3 Responses

  1. Does using an integration clause in the offer create problems when the interviewee accepts the offer, only to find an employment agreement with additional terms in the employee handbook on the first day of work?

    • You raise an excellent point. One way to avoid this problem is to include a provision like the following in the Acceptance of Offer of Employment:

      “I understand and agree that, during my employment with the Company, I will be bound by all of the Company’s then-current rules, regulations, policies, and procedures. I also understand that if I accept the Company’s employment offer, I will receive a copy of the Company’s Employee _ _[Manual/Handbook]_ _, and I will be required to acknowledge in writing that I have received, read, and understood the policies set forth in the Company’s Employee _ _[Manual/Handbook]_ _. I also understand that I am required to provide to the Company copies of any employment, confidentiality, inventions, or other agreements by which I presently am bound or to which I currently am subject.”

      For additional provisions to include in a job offer and acceptance, see CEB’s Drafting Employment Documents for California Employers, §1.16.

  2. […] Interviewer’s Loose Lips Can Lead to Employer Liability […]

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