Employers\u27 Duties of Honesty and Accuracy

This short essay is a contribution to the Labor Law Group\u27s chapter-by-chapter critique and analysis of the American Law Institute\u27s effort to restate the common law of employment through its 2015 Restatement of Employment Law. This essay focuses specifically on sections 6.05 and 6.06 of the Restatement, which address employers’ duties of honesty and accuracy in their communications to workers themselves as articulated by the torts of fraudulent and negligent misrepresentation. Employers speak to workers about a wide range of job-related topics that include the terms and conditions of employment, business projections, and applicable workplace legal protections. Employers’ communications on these subjects can, and often do, valuably inform workers’ decisions about jobs and other weighty issues. But employers’ speech - in particular their lies and misrepresentations - about these matters can also inflict substantial harm by distorting workers’ decisions of great life importance. That employers enjoy advantages of information and power further enhances their ability to manipulate or coerce workers’ choices through lies and misrepresentations. Efforts to articulate employers’ legal duties of honesty and accuracy should thus be informed by a functional, rather than formalist, understanding of the information and power dynamics within this relationship. The essay starts by explaining how and why law imposes duties of honesty and accuracy on speakers (including but not limited to employers) who experience information or power advantages over their listeners. It then draws upon this background to evaluate the Restatement’s attention to these information and power asymmetries in its discussion of employers’ fraudulent and negligent misrepresentations to workers. It concludes that the Restatement and its commentary do not consistently attend to these dynamics – in particular, by failing to recognize the breadth of situations in which employers enjoy structurally unequal and thus special access to key information, and by discounting the ways in which these asymmetries can lead workers to rely to their detriment on employers\u27 misrepresentations. Despite the Restatement’s limitations in this regard, judges can and should keep these dynamics in mind when considering claims of fraudulent or negligent misrepresentation in the employment context – as should legislators and other policymakers considering workplace policy to inform and empower workers