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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 Are Arbitration Clauses And How Do They Affect Employees?

 

Tom from Mill Valley asks:  I heard something on the news about a recent US Supreme Court case upholding arbitration clauses in employment cases. What are arbitration clauses and how do they affect employees?

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Employee Protections Against Wrongful Termination Explained

Today’s question comes from Kate, who asks “I have a friend recently terminated by a multi-billion-dollar company for not showing up to work. He had been 5150’d and was under psychiatric hold as required by his doctor. His then girlfriend called to let the employer know that he was in the hospital and would call as soon as he was able. He was fired anyway. Doesn’t the ADA require that he be given reasonable accommodation?”

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Whats The Law On Wage Discrimination In The Workplace ?

This week’s question comes from Tina S. in Noe Valley who asks: “I think that I am being paid less than the 2 men who are doing my same job. I work in Menlo Park and there is a lot of talk about gender equality but I don’t think it is being put into practice at my current job. We all have MBA’s and started at the same time. One of the men is my same class but the other worked in finance before getting his MBA. What is the status of the law and what can I do to find out if I am being discriminated against.”

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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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Wrongful Termination For Whistleblowing On Medicare Fraud

whistleblower and employment law

A reader who wishes to remain anonymous writes, “Chris, I worked in the accounting department of a health care provider.  Last year, my company discovered it had been using the wrong billing code for a key service when submitting Medicare reimbursement requests.  This resulted in the government paying substantially more for the service than it should have.  My supervisor directed me to compile a list of the overcharges for senior management.  The company remedied the error for new reimbursement requests but never informed the government of the overpayments.

Two weeks ago, I sent an email to my supervisor asking why the company had not reported the billing error.  I was told the matter had been resolved and not to raise the issue again.  I would know if the company reimbursed Medicare for the overcharges.  No payment was made.  Last week, I was laid off without notice.  I believe it was because I complained about the Medicare overcharges.  I did not have a contract and they refused to give me any severance pay.  What can I do?”

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How Much Time Can I Take Off Of Work For Pregnancy? 2017 California Law Update

Pregnant Business Woman

Cristy from Albany writes, “Chris, my wife and I are excited to have our first child in the Spring. The pregnancy has been challenging, however. I may need extended time off from work both before and after my baby is born. I am confused as to the amount of leave I am entitled to. Could you please clarify the law for me?

Thank you for your message Cristy and congratulations to you and your wife on your great news.

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Need Time Off To Vote? California Voter Law Explained

California Time Off To Vote Law

 

Today, I will address a few questions that I have received by email or have been posted on the Dolan Law Firm’s Facebook page, and tell you about a scholarship program we have launched.

With the Presidential and statewide election set for next Tuesday, I have been asked how does California’s Time Off To Vote Law work.

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New Law Ensures Fair Lawsuit Awards To Injured Persons Regardless Of Immigration Status

 

This week’s question comes from Martin G. from the Mission who asks: “I got hurt in a car accident.  It was not my fault I was a passenger. My friend did nothing wrong.  His insurance company has paid my medical bills, I was told by a lawyer that I could not collect my lost pay because I did not have papers.  I was told that I could only get what they would pay me in Mexico and not what I was actually paid here in California.”

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Bus And Truck Driver Fatigue A Significant Safety Threat

Greyhound Bus crash

Today’s question comes from Marisol S. in South San Francisco who asks “my friend was on the Greyhound bus that crashed on Monday. They say that the driver may have been too tired and fell asleep. Isn’t the bus company supposed to make sure that the drivers aren’t drunk or falling asleep? How can they let someone who is falling asleep drive a bus? What laws apply? What are her rights?”

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