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“At Will” Employee Stated a Cause of Action Alleging Defendants Fraudulently Induced Him to Take the “At Will” Job

The First Department, in a full-fledged opinion by Justice Acosta, determined plaintiff had stated a cause of action for fraud in the inducement in connection with plaintiff’s acceptance of “at will” employment with defendants. The complaint alleged that defendants induced plaintiff to leave his well-compensated position with J P Morgan by falsely indicating plaintiff was being hired because of defendants’ heavy work load. The complaint further alleged that defendants did not have much work and plaintiff was hired solely to provide defendants with his business contacts. After turning over his business contacts, plaintiff alleged, defendants terminated him, claiming there was not enough work to support his position. The First Department reasoned plaintiff was not seeking damages for wrongful termination, which is not available for an “at will” employee, but rather was seeking damages for defendants’ fraudulently inducing him to give up his lucrative employment with J P Morgan in order to take the “at will” employment. The court further noted that the “general” merger clause in the “at will” employment contract did not preclude the action and the action concerned statements of material existing fact, not (nonactionable) statements of future expectations:

An at-will employee, who has been terminated, can not 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]” … .

Plaintiff does not allege that defendants wrongfully terminated him. He claims that they 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. Indeed, plaintiff’s injury preceded his termination.

Nor are plaintiff’s damages speculative, since he alleged that they stem not from his loss of employment with defendants, but from his loss of employment with J.P. Morgan. These damages represent “the sum necessary for restoration to the position occupied before the commission of the fraud” … . Laduzinski v Alvarez & Marsal Taxand LLC, 2015 NY Slip Op 06646, 1st Dept 8-25-15

 

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