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Fraud and Misrepresentation in the Workplace

Fraud and Misrepresentation in the Workplace

By Christopher Dolan and Mari Bandoma Callado

This week’s question comes from Arthur B.

Dear Chris,

I was contacted via Linkedin by the Chief Financial Officer of a San Francisco-based start-up.  He offered me an opportunity to join the start-up as a program director with an annual salary of $120,000 plus a $30,000 raise by the end of the year.  I was flattered by the offer but was concerned about job security and the start-up’s financial stability. The CFO assured me that the position is permanent and long-term and that the start-up is in the midst of receiving a capital injection from an investor.  Based on the CFO’s statements, I uprooted my family and moved from Portland to San Francisco last August.  

At the end of the year,  I did not receive the raise I was promised and instead learned that I was being terminated because my position was being eliminated due to a “restructuring due to an impending acquisition”.  I protested that the CFO assured me that my position was long-term and permanent. The CFO responded that my position was in fact “at-will”. I have been unsuccessful obtaining comparable employment.  Do I have a claim for wrongful termination?

Thank you for your question, Arthur.  It can be difficult to establish a cause of action for wrongful termination for employees who were not terminated on the basis of discrimination or retaliation.  However, employees who were enticed to relocate their residence based on representations made about the job that later turned out to be false may have a claim pursuant to California Labor Code section 970, as well as other tort claims such as negligent misrepresentation.

California Labor Code section 970 was enacted in 1937 to protect migrant farm workers.  Experienced farm workers were often offered higher wages to entice them to relocate. However, once they get there, they learn that the wages would be much lower than what was promised or the hours they would work would be considerably less.  The law therefore recognizes that after spending considerable resources to move and/or turning down other job offers, these workers would have no choice but to accept terms that were different from what they were promised.

Often, experienced farm workers were offered higher wages and/or clean housing to induce them to relocate. Many times these employees would turn down other job offers and spend a lot of money to relocate. However, once they would get there, the job would not be anything like what was promised. For example, their wages would be much lower than what was promised and/or the duration of their job would be much shorter. Many times, because these employees had already spent considerable amounts of time and money, they would have no choice but to accept these less favorable terms.

Today, the statute applies to all classes and types of employment. California Labor Code section 970 prohibits employers from enticing employees to relocate to, from, or within California by falsely representing the:

  • Kind, character, or existence of work;
  • Length of time work would last;
  • Compensation for work;
  • Sanitary or housing conditions relating to work;
  • Existence or nonexistence of any pending strike, lockout or other labor dispute affecting work.

California Labor Code section 970 is supplemented by sections 971 and 972.  Section 971 provides criminal penalties (fine up to $1,000 and/or 6 months of jail time) against employers who violate section 970, while section 972 provides a for a “private right of action” allowing the employee to bring a civil action as well as an entitlement to recover double damages.  These damages may include but are not limited to moving expenses, rejecting other job offers, loss of income due to inabilities to find another job, sale/purchase of a home, a lease, transportation, buying furniture, etc.

A claim for fraud under the labor code must be filed within one year from the date of the misrepresentation so we recommend that you contact a trial attorney and/or the Department of Labor Standards Enforcement immediately.

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What The Law States Regarding Human Trafficking

Joe from San Francisco writes: My wife and I learned of a great opportunity to work in a restaurant in San Francisco. We were promised “good wages” and we were excited to move to from the Philippines and start a new life in America. When we arrived in San Francisco two years ago, we were required to and continue to work over twelve hours a day and not allowed to take breaks. We also work 6 days a week. Our employer told us that we owed a debt and he began deducting various items from our wages such as transportation, interest or fines, and charges for bad behavior. We ended up with almost no salary for the hours we worked. We were also threatened with our visas having expired and being in the United States “illegally.” My employer even took our passports away. We were threatened that if we tried to leave our employer and go back to the Philippines, something bad would happen to our family there. We confided in a friend who told us that she believed that we are victims of human trafficking. What can we do? We feel trapped and do not know if we have rights.

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How Are My Legal Rights Affected By Having To Sign An Arbitration Agreement For A New Job?

employee employment arbitration agreement

JJ writes:  “Dear Mr. Dolan: I just started a new job and they made me sign an arbitration agreement. Is that okay- what does it mean?”

Dear J.J: As you have discovered, more and more often employers are requiring employees to sign arbitration agreements as part of an offer of employment. While the arbitration agreement is often mixed in with a stack of other new-hire paperwork, it is much more sinister than most of the other documents employees are asked to sign.

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What Is The Law In California To Take Time Off Work To Care For A Family Member?

Adam from Mission Bay writes, “Chris, my husband Jeff was hit by a car while crossing the street near our condo. Jeff was in the crosswalk and suffered a fractured leg and a concussion. I did not have any PTO at work. I took off a week anyways to care for Jeff after he was released from the hospital.

My manager was upset with me for not reporting to work. He said he couldn’t get coverage for my shifts and fired me the day I returned to the job. I had emailed my manager that I would not be coming into work to care for Jeff. It’s a big company of about 100 people throughout the Bay Area, with about 50 in my division in San Francisco.  I have worked for them for two years and never called in sick.  Didn’t I have the right to take time off?”

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Retaliation Against Nursing Home Employees For Reporting Violations Prohibited

Kate in San Francisco writes, “Chris, I worked as a licensed vocation nurse at an assisted living facility for patients with Alzheimer’s disease and other forms of advanced dementia and cognitive impairments.  I was a dedicated, experienced professional.  Last year, a new company bought the facility.  The new management team was focused on cutting costs.  Food menus were changed to reduce the quality and quantity of meals.  PTO and sick leave for staff were reduced across the board.  When anyone was ill, no one was called into to cover their shift.  We were regularly short staffed.

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Proposition 64 Offers No Protections For Employees Who Use Marijuana

Proposition 64 and the employment law

This week’s question comes from James Q., in Orinda who asks; “I voted for the legalization marijuana in the last election. I want to know about what the rules are? How much can I have?  How much can I grow?  Can I be fired for smoking pot off the job?  I can drink while I’m not on duty.  Can I smoke or can they still drug test me and fire me?”

James, Proposition 64, officially known as the Control, Regulate and Tax Adult Use of Marijuana Act, is a complicated set of new regulations.  Many people assumed it simply authorized the sale and use of marijuana.  While that is true, there is much more to the law only a bit of which I can cover here.

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Whistleblower Law: What To Do If Your Company Is Committing Fraud

reading word whistle blower screen magnifying glass 3d illustration

I received the following communication from an individual who wishes to keep his identity confidential:

“Chris, I’m a salesperson at a major corporation that puts tremendous pressure on us to meet monthly quotas.  While not explicitly stated, the clear message we receive from management is do whatever it takes to meet your quota or you will be fired. I’ve observed other sales representatives repeatedly lie to customers to close deals. Their supervisors do nothing when customers complain.  I want to quit my job but I also can’t stand what the company is doing to its customers.  I read about the verdict you obtained for a person in a similar situation.  What should I do?”

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California Family And Sick Leave Law Explained

California employment leave on family and sick leave explained, Portrait of young caring mother kissing sick daughter in head

Rebecca from Foster City writes,” My daughter is in need of a surgery and I would like to take time off to spend with her while she is in the hospital and while she recovers at home, but my boss said that I don’t have enough sick time in the books to take any more time off.  Am I entitled to take the time off?”

Rebecca, I am sorry to hear that your daughter is sick. My thoughts are with you and your family.  To start with, you should be aware that there are many types of leave laws in California, and sometimes they can be confusing.  At times, company human resource representatives are not fully aware of the employee’s rights to take leave and the requirements and obligations of the employer to allow it., so it is important for each employee to understand their rights.

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