Employer Secrets?

Is an employer required to tell an applicant about the financial condition of the company?  What if the employer knew the company had just lost a contract with a major client?  What if that client was the major source of business for the position that the applicant was applying for?  Is it fair to keep the lost contract a secret?  According to the Oklahoma Court of Civil Appeals, the failure to disclose relevant information about the company could expose the employer to liability.

In Stehm v. Nordam Group, 2007 OK CIV APP 94, the Court held that Oklahoma recognized a cause of action for fraudulent misrepresentation and/or concealment in hiring where an applicant could establish the following elements:   (1) the employer misrepresented or concealed a material fact during the hiring process, (2) the employer had knowledge of the falsity of the fact or lacked reasonable grounds for believing it to be true, (3) the employer intended to induce the employee’s reliance, (4) the employee justifiably relied upon the misrepresentation, and (5) damages resulted.

In sum, it is a violation of Oklahoma law for an employer to fraudulently withhold material information from a proposed applicant if the information withheld is relevant to the position, and the applicant relied on the information to their detriment.

What is not clear is whether this theory of liability extends to current employees, however, because the rationale adopted by the Stehm Court came from a decision involving a current employee, there is a plausible argument that Oklahoma would extend protection to employees as well.