Houston Fraud Lawyer

Fraud can occur in the workplace, although this is rare. You should have strong evidence before you take such an offensive action against your employer.

Gardner Employment Law has litigated fraud claims and knows the intricacies of the law. If you have evidence that you have been defrauded, we can help you decide what to do.

Evidence of Intentional Wrongdoing

If you assert a fraud claim, you are claiming that another person intentionally misrepresented a material fact that caused your losses. How does one prove what another person “intended”? Having recognized this difficult burden of proof, courts have defined “intentional” as either an act or omission taken with the intent of a certain result or taking an action knowing with substantial certainty that a particular result will occur.

To prove fraud, you must show that a false statement was made, that the speaker knew at the time the statement was false or made the statement recklessly, that the speaker made the false statement with the intent that you would act on it, that you acted in reliance on the false statement and suffered losses or damages because of that reliance.

Negligent Misrepresentation

The law recognizes a lower level of a claim similar to fraud, negligent misrepresentation. In this instance, the other person made a false statement, either by act or omission, but the actions were not intentional. 

In this claim, you must show that another party made a representation to you in the course of a business transaction that was false, that the false information was supplied for your guidance, that the other party did not exercise reasonable care in obtaining or communicating the information, and that you justifiably relied on the false information causing damage or loss.

How Does Fraud Appear in the Workplace?

As with many bad deeds, fraud or misrepresentation many times arises out of greed or a desire for more money than is fairly deserved. Of the fraud cases that I have seen, most of them involved business deals in which one side knew, either outright or with substantial certainty, that there was overreaching involved but nevertheless proceeded in order to benefit themselves to the other’s detriment.

When the matter involves an employee and employer, this can arise when a company official intends to take financial advantage of an employee’s inexperience, undeserved trust, or some other form of weakness at the bargaining table. This is rare, but I litigated a case for 10 years which involved a fraud claim. We went to the Texas Supreme Court twice (I won both times) and finally the company settled.

 I represented a high-level executive with outstanding talent. A company official with the required authority offered my client a promotion to move to Houston based on false pretenses. The official never meant to promote my client when the official made the offer but wanted to “use” the executive to train up-and-coming younger employees, which I was was able to prove. In short, you need to prove that the company official knew at the time that he made the statement he knew it was not true. Also, there are other laws requiring particular evidence to hold the company responsible, rather than just the person who made the misrepresentation.

What If the Situation Changes After the Misrepresentation Is Made?

Based on “employment at will,” if the situation changes after the inaccurate statements are made or if the official was not aware of certain facts, fraud does not exist.  Even proving negligent misrepresentation is difficult. Even if an employee is promised great things at the time of the offer, sells his house, moves his family across the country, but then as soon as he arrives at the new location the promise of “great things” is retracted or he or she is terminated, that is legal in Texas — if the company’s decision to terminate is based on new information not known back when the promise was made. It becomes an “I’m so sorry” situation. There may be other legal claims, but not fraud.

What Should You Do?

To reiterate, fraud or even negligent misrepresentation is rare, but it does happen. The first step is to see an expert employment lawyer. Be armed with the facts because details matter.

If you need help in deciding what you should do, give us a call.  At Gardner Employment Law, we are here to help you.

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