What Does Hiring Under False Pretenses Mean?
/Prospective employees rely upon employers to provide accurate information as part of the hiring process. Colorado law prohibits employers from inducing employees to accept employment on the basis of materially false information. Hiring under misrepresentation refers to the act of inducing someone to leave other employment or accept employment based on materially false or misleading facts provided during the hiring process. It occurs when a hiring manager or representative intentionally misrepresents certain aspects of the job, such as the nature of the work, compensation, benefits, future prospects, or financial stability of the employer, in order to cause the candidate to accept employment. Such misrepresentations may be actionable and lead to significant potential liability to the employer and its managers for making materially false and/or misleading statements.
Is Hiring Under Misrepresentation Legal under Colorado statutes?
A little-known Colorado law, C.R.S. § 8-2-104, entitled “Obtaining Workman by Misrepresentation Unlawful,” makes it unlawful for an employer to induce an applicant to accept employment on the basis of false representations. The law provides: “It is unlawful for any [employer] … doing business in this state, … to induce, influence, persuade, or engage workmen to change from one place of employment to another in this state, or to bring workmen … into this state to work in any of the department of labor in this state, through or by means of false or deceptive representations, false advertising, or false pretenses concerning the kind and character of the work to be done, or amount and character of the compensation to be paid for such work, or the sanitary or other conditions of the employment, or as to the existence or nonexistence of a strike or lockout pending between employer and employees, or failure to state in any advertisement, proposal, or contract for the employment that there is a strike, lockout, or other labor trouble at the place of the proposed employment, when in fact such strike, lockout, or other labor trouble then actually exists at such place and it is deemed false advertisement and misrepresentation for the purposes of sections 8-2-104 to 8-2-107.
The elements a plaintiff must establish to sustain an action under Section 8-2-104 are the same as those for common law fraud. Both require that the employer (a) made a false pretense of fact, (b) that the representation was made to induce a person to act or with the intention that it be acted upon, and (c) that damage was sustained in reliance on, or in consequence of, the false or deceptive representation. False pretense has been defined as “a false and fraudulent representation made with knowledge of its falsity, with intent to deceive and defraud, and which is adapted to induce the person to whom it is made to part with something of value.” Clarke v. People, 53 Colo. 214, 215-16, 125 P. 113, 113 (1912). Further, the employee must have justifiably (or reasonably) relied upon the representation or the nondisclosure and that this reliance resulted in damages. Greene v. Thomas, 662 P.2d 491, 495 (Colo. App. 1982). A prevailing employee is entitled to recover “all actual damages” and reasonable attorneys’ fees and costs. C.R.S. § 8-2-107.
While an earlier decision suggested that the statute applies only to cases in which an employer brings workers into Colorado from another state, Vaske v. DuCharme, McMillen & Assoc., Inc., 757 F. Supp. 1158, 1164 (D. Colo. 1990), a more recent decision applied the statute to a change of employment within the state. Boeser v. Sharp, Civil Action No. 03-WM-0031 (D. Colo. 2004).
Baird Quinn LLC is a boutique employment, labor, and commercial law firm in Denver, Colorado, that represents employers and employees in employment law disputes, management on union issues, and business clients in commercial litigation matters. Contact Baird Quinn LLC to learn more about your rights under the ”Obtaining Workman by Misrepresentation Unlawful” law in Colorado.