Colorado Law on Employer Fraud in Hiring Process

by | Jan 16, 2020 | Colorado Employment Law Blog

A little known Colorado law, C.R.S. § 8-2-104, entitled “Obtaining Workman by Misrepresentation Unlawful,” prohibits any Colorado employer from inducing workers to change from one place of employment to another or to bring workers to Colorado by means of false or deceptive representations. Pittman v. Larson Distrib. Co., 724 P.2d 1379, 1386 (Colo. App. 1986). Specifically, “[i]t is unlawful for any person, company, [or] corporation . . . doing business in this state, by itself or its agents or attorneys, to induce, influence, persuade, or engage workmen to change from one place of employment to another in this state, or to bring [workers] . . . into this state to work . . . 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 . . . .” See C.R.S. § 8-2-104. 
Section 8-2-105 makes a violation of Section 8-1-204 a misdemeanor punishable by fine and imprisonment, and Section 8-2-107 gives employees a private right of action for a violation of Section 8-2-104.

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), the most 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).