From Paychecks to Pinkslips

Date: 2006
Author: Daniel A. Lublin
Publication: Metro
Picture this: you’re happily employed and not looking elsewhere. One day, a recruiter comes knocking with promises of greener pastures and more dollars. You take a chance and meet with the company representative. The picture he paints is rosy. He tells you they’ve just secured a new client and you are going to head up the new project. The job is supposed to be secure for years. You resign and sign the contract. But, four months down the road, the funding falls through and instead of a paycheck, you’re left with a pinkslip.
This scenario became reality for Douglas Queen. Queen wasn’t told the position he sought had no guaranteed funding and was subject to further budgetary approval. In order to accept the job, Queen left a well-paying and secure job in Calgary and moved himself and his family more than halfway across the country to Ottawa. Barely five months after his arrival, he was let go due to a lack of funding.
The situation Queen faced is familiar for many of my own clients. During the pre-employment recruiting period, employers may sometimes overstate or misrepresent aspects of a position in an overzealous attempt to snag the perfect employee. Leaving a secure position, the employee accepts the offer. Then when the honeymoon period ends and the truth is revealed, I’ll receive a call from the aggrieved employee.
During the recruiting process, promises or representations made that fail to materialize may lead to damages for “negligent misrepresentation”. Queen sued and received over $65,000. However, it is not every misstatement that can be characterized as a negligent misrepresentation. Many times, I’m left advising employees that unfortunately they appear simply, out of luck.
So, when is a statement made to you during an employment interview a misrepresentation or merely a misjudgement? For employees in a situation similar to Douglas Queen, I offer the following advice to discern the merits of your case:

• The statement must be untrue, inaccurate or misleading;
• The person making the statement must do so negligently. In other words, the person must not have acted as a reasonable person would in similar circumstances;
• The person relying on the statement must have done so reasonably.

Damages were suffered from relying on the statement. In an employment law case, it could mean the loss of another opportunity, resigning from a previously secure job or even the moving costs to accept the new opportunity.