Commercial Division Blog

Posted: August 27, 2015 / Categories Commercial, Contracts, Fraud/Misrepresentation, Labor and Employment Law

Plaintiff States Claim for Fraudulent Inducement Despite Being At-Will Employee

On August 25, 2015, the First Department issued a decision in Laduzinski v. Alvarez & Marsal Taxand LLC, 2015 NY Slip Op. 06646, holding that an at-will employee can bring a claim for fraudulent inducement to enter into an employment contract.

In Laduzinski, the plaintiff brought an action against his former employer for fraudulently inducing the plaintiff to accept an offer of employment from the defendant. The trial court dismissed the claim because the plaintiff had been an at-will employee. The First Department reversed the trial court's decision, explaining:

An at-will employee, who has been terminated, cannot state a fraudulent inducement claim on the basis of having relied upon the employer's promise not to terminate the contract, or upon any representations of future intentions as to the duration or security of his employment. However, where an at-will employee alleges an injury separate and distinct from termination of the his employment, he may have a cause of action for fraudulent inducement. The at-will employee must allege not that his employer wrongly fired him, but that he would not have taken the job in the first place if the true facts had been revealed to him.

(Internal quotations and citations omitted) (emphasis added). Because the plaintiff claim was that the defendants "misrepresented the nature of the job that they were hiring him to do, that they were only hiring him to gain access to his contacts and that if they had told him this he would not have left his job at J.P. Morgan to work for them," he stated a claim for fraudulent inducement.