Legal Memorandum: Fraudulent Inducement of Employment

Issue: What are the advantages to using the claims of wrongful discharge, intentional infliction of emotional distress, tortious interference with an employment relationship, and breach of employment contract in a cause of action for fraudulent inducement?

See generally 30 Causes of Action 2d 1, supra, Cause of Action for Fraudulent Inducement of Employment § 2.  A wrongful discharge action may provide an alternative basis for establishing the employer’s liability where an employee who was fraudulently induced to accept employment is subsequently discharged by the employer.  30 Causes of Action 2d 1, supra, Cause of Action for Fraudulent Inducement of Employment § 2.  In such a case, the employee cannot maintain the claim merely by showing that her employment was fraudulently induced; rather, she will have to establish an independent basis for the wrongful discharge action, such as a violation of her contractual employment rights (if any), or violation of public policy.  Id.  

There may be advantages to claiming intentional infliction of emotional distress, instead of or even in addition to fraud, because a successful plaintiff in such a case may be entitled to recover damages for emotional suffering, which may or may not be recoverable in a fraud case, and generally are not recoverable in a promissory estoppel case.  See id. § 2. 

A false statement concerning employment may sometimes provide the basis for an action for breach of an employment contract as well as an action for fraud in inducing the contract.  Id. § 22.  A promise of employment on particular terms, even if of unspecified duration, if accepted by the employee may create a binding unilateral contract.  Hughlett v. Sperry Corp., 650 F. Supp. 312, 314 (D. Minn. […]