Avoid Wrongful Hiring

By Mark Swartz
Monster Contributing Writer

The candidate you’re interviewing is perfect.  
They’ve expressed some concerns about working conditions. Or have said they’re being considered by a competitor who you know will make a better offer.
Do you tell the truth and disappoint them – risking that they’ll walk away? Maybe you panic a bit and feed them a few white lies. Like you’re sure you can meet their compensation expectations. And that the working conditions are being improved as you speak.
Careful…you may have just crossed a line. Making promises or exaggerations that prove false could be misrepresentation. Protect yourself from “wrongful hiring” lawsuits by watching what you (or your recruiters say to prospects.)

Wrongful Hiring Is A Form OF Fraudulent Misrepresentation
Wrongful hiring is a legal term used in Canadian employment law. Just like when job seekers sometimes misrepresent themselves to be viewed as more desirable, employers can also be guilty of overpromising and underdelivering.
Little white lies an employer may tell are not legally actionable. If, however, it can be argued that the applicant would never have taken the job if they’d known the truth, they may be able to sue you successfully.  
There has to be “detrimental reliance” for a winning negligent misrepresentation action. The test for reliance is objective: namely, would a reasonable person in the plaintiff’s position have relied on the misrepresentation.
Damages Can Be Costly
According to employment lawyer Howard Levitt, damages for wrongful dismissal are not limited to a number of months severance pay. “Damages can be unlimited for all the employee incurred as result of leaving her last position to take the job. As well, unlike wrongful dismissal law, where mental distress damages are technically difficult to obtain, in wrongful hiring, such damages are awarded as long as the employee can prove she suffered them.”
The Employer’s Duty Of Care
An employer and its representatives have a legal “duty of care.” They must take reasonable care to ensure the accuracty of information they present to a candidate. Claiming that they believed what they were saying is true, when the actual situation turns out to be very different, may not be an adequate defense.
An Example Of A Successful Wrongful Hiring Case
In the case of Queen vs. Cognos Inc., the Supreme Court of Canada held that an interviewer had a duty to take reasonable care to avoid making misleading statements to potential employees.
In Cognos, the employer misrepresented the security and the nature of the position being offered. Queen accepted the offer of employment, only to be reassigned to quite different duties than those he was told he’d perform. Queen sued for negligent misrepresentation.
The employer was found liable for making false promises. Cognos Inc. was required to pay damages to Queen for lost income, the loss suffered on the purchase and sale of his new home, emotional stress and the costs and expenses incurred in finding a new job.
How To Avoid Wrongful Hiring
There are to practices that you and your recruiters should use when hiring. The first seems rather obvious: keep the interview legal .  Don’t lie or exaggerate to candidates. Any promises made will have to be kept. (Not writing down promises doesn’t exempt them from being contractually binding).
The other practice is to put the entire offer in writing for the candidate. This gives an employer time to ensure they’re only guaranteeing what’s deliverable. Anything beyond that should be stricken from the offer before it’s presented.

Staying On The Up And Up
Not every candidate is perfectly honest with interviewers. That can lead you to feel that your recruiters can get away with similar fact-fudging.
Except they can’t. The law is clear about this. Making false representations can land your company in court. Hence every so often you may need to let a perfect applicant go elsewhere. On the bright side, it won’t cost you tens of thousand in court penalties – and the loss of this disaffected employee – when reality comes home to roost.