Legal Memorandum: Fraudulent Inducement of Employment in CA

Issue: Does California law recognize a claim for fraud in the inducement in the context of an employment action?

          See Rochlis v. Walt Disney Co. (1993) 19 Cal. App. 4th 201.  It is a wrongful termination case.  Thus the plaintiff in Rochlis sued for damages arising out of his employment by the defendants, and the subsequent termination of that employment in 1989.  He asserted various causes of action, many of them based on his claims that according to the terms of his contract, (1) he would receive a salary of $225,000 per year through December 31, 1988 and reasonable salary increases appropriate to his responsibilities and performance;  (2) he would receive reasonable annual bonuses appropriate to his responsibilities and performance; (3) he would participate in all meetings that the president of the defendant had with two other high ranking officers; (4) he would actively and meaningfully participate in all of the defendant’s creative activities;  (5) he would be in charge of all administrative matters concerning his employer, WDI, and all of its officers and employees would report to him administratively;  (6) he would report directly to two employees of another of the defendant companies; and (7) his employer, WDI, would be subject to direction only by two of another defendant’s officers.  Rochlis, 19 Cal. App. 4th at 214.

These "commitments," said the court were "too vague and indefinite to be enforceable," noting that "appropriate" bonuses and salary increases, and statements that Rochlis would have an "active and meaningful" participation in certain decisions cannot be enforced in a court of law. Id. at 213-14.  As a result, […]