Our law firm has received calls from both employees and employers describing the following scenario:
- Employee alleges a promise was made by the employer (or prospective employer);
- Employee claims to have acted in reliance on that promise; and
- After doing so, employer claims the promise was never actually made.
The question becomes: is the employer now at fault as a result of their alleged promise? Does the employee have any recourse? As with nearly all employment situations, the answer is: it depends.
Employers often take the position that since Maryland is an employment “at will” state and employees can be terminated for nearly any reason, the employee has no claim. Employees, on the other hand, argue that because they detrimentally relied upon assurances which the employer made in bad faith, the employer cannot hide behind the shield of “at will” employment.
People are often surprised to learn that the seminal Maryland case on this topic—issued by Maryland’s highest court—found in favor of the employee despite his “at will” status, finding that there was a viable claim against the employer for negligent misrepresentation. The case is Griesi v. Atlantic General Hospital Corp., 360 Md. 1 (2000) and it involved a physical therapist who relied upon a CEO’s promise of a job offer. As a result, the physical therapist turned down other opportunities for work. As you would imagine, a dispute arose when the employer later reneged on the offer.
Every case is individual and the analysis in this area is very fact specific. Not all scenarios result in a win for the employees. The Court in Griesi set forth the following five factor test to consider when assessing a negligent misrepresentation claim:
(1) the employer, owing a duty of care to the employee, negligently asserts a false statement;
(2) the employer intends that his/her statement will be acted upon by the employee;
(3) the employer has knowledge that the employee will probably rely on the statement, which, if erroneous, will cause loss or injury;
(4) the employee, justifiably, takes action in reliance on the statement; and
(5) the employee suffers damage proximately caused by the employer’s negligence.
Maryland employers or employees who have additional questions about employment related promises or any other issues arising in the workplace are welcome to contact attorney Judd G. Millman. Mr. Millman is licensed to practice law in both Maryland and Texas, and he focuses exclusively on the area of employment law. He regularly counsels both employees and employers on the myriad of legal issues which arise in the workplace. He can be reached directly at (410) 522-1020 or at judd@luchanskylaw.com.