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SEPTEMBER 2005
JOB OFFERS CAN LEAD TO LIABILITY IF WITHDRAWN
The California Court of Appeals has recently held in two separate cases that employers can be
liable for lost future income to potential new employees who left secure jobs to accept new positions.
In one case, an applicant relying on a job offer quit his job. Then the job offer was withdrawn
and the applicant was unable to find comparable work matching his former income. The applicant sued
and the jury awarded a half-million dollar in damages, which included the future lost income as the
amount he would have earned had he continued working at his former job through retirement, reduced
by earnings received and expected from the employment he had been able to find.
In another case, the supervisor conducting interviews represented that an applicant would earn
substantially more as his employee than at the job the applicant currently held. The applicant accepted
the job offer, quit his former position and began work. However, after several months of complaining that
his earnings were lower than what was represented during the interview, he was fired. The employee was
unable to return to his former job or and was also unable to find other work at a comparable salary. The
employee sued and the jury awarded over a million dollars that included future lost income plus punitive
damages. The appellate court affirmed the decision finding that the damages awarded are recoverable
by an employee pursuing a claim of fraud against an employer who induces him to leave secure
employment by knowingly making false promises regarding the terms of his future employment.
What Should You Do?
Offer employment only after you have completed all steps in the hiring process.
Train all interviewing supervisors as to their authority to offer employment.
Inform applicants that employment offers can only be made in writing by an authorized
company representative.
Reduce all offers to writing.
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Job Offer Liability - Sept 2005 |
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This information is intended to provide guidance in the area of employment law and is provided as a service of the Firm. While every effort
has been made to ensure the accuracy of the information contained in this bulletin, it is not intended to serve as "legal advice". If additional
information or assistance is needed on any of the topics contained in this informational package or any other matter, please feel free to
contact Cynthia Elkins for further information. All rights reserved. ©2005.
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