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EMPLOYMENT LAW GUIDE: - page 38 / 134

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E. Fraud/Misrepresentation

An employee may have a claim for fraud or misrepresentation if her employer makes

a false statement for the purpose of inducing the employee to rely on that statement in order

to take a particular action, the statement turns out to be false, and the employee is harmed by

relying on the false representation. A typical claim involves misrepresentations in the hiring

process concerning length and terms of employment, such as a promise of a minimum term

of employment, job security or bonus compensation, in order to induce a job applicant to take

a job.

F.

Negligent Hiring/Retention

Employers must exercise reasonable care in the selection and retention of employees.

This is particularly true if their employees come into contact with members of the public as

part of their jobs. An employer breaches its duty if it knows, or should have known, of

problems that indicate unfitness and fails to investigate, discharge, or reassign the employee.

As a result, employers are well advised to conduct background checks of applicants,

particularly if the employee will deal with customers, cash or other sensitive matters. See

Part II, Section 2.1(B)(2) below.

1.6

Contracts

Employers and employees can modify the at-will employment relationship by

contract. The formation of a contract can be intentional or unintentional. Contractual

obligations can arise from written employment agreements and offer letters as well as pre-

hire oral statements or promises. In addition, implied contracts may be formed by promises

or statements made in handbooks, employment policies and practices and the employer’s

conduct. The most common contract claims will be discussed briefly below.

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