- Maryland - Negligent Misrepresentation
- October 11, 2016
- Law Firm: Shawe Rosenthal LLP - Baltimore Office
- The federal district court for Maryland held that an individual could sustain a negligent misrepresentation claim even in the context of an at-will employment relationship. In Smith v. Integral Consulting Servs., Inc., an individual quit his position in Afghanistan and relocated to the U.S. in reliance on a signed offer letter for a position with a government contractor. The position required government approval, but the offer letter did not specify that. The government subsequently did not approve his hiring, and the offer was rescinded. The employee then asserted a claim for negligent misrepresentation, among other things, arguing that he reasonably relied on the company’s misrepresentation that he had a job, to his detriment.
The company argued that the individual could not have reasonably relied upon the offer of at-will employment, because employment could be terminated at any time, including after his first day of work. The court found, however, that the “essence” of a negligent misrepresentation claim in this at-will context “is not whether the parties formed an employment contract” but whether the company “failed to exercise reasonable care in communicating information to him that was material to his business decision whether to accept the offer.” The individual’s reliance on the offer resulted in injury to him - incurring relocation costs and leaving him without employment.
This case warns employers to be careful when communicating information about a prospective job. If an offer is contingent upon certain circumstances - such as third party approval - it is important to spell that out.