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Inside Counsel "Fraudulent Inducement and the 'At-Will' Employee" by Stephen M. Kr

New York is an “at will employment” state. That means, among other things, that under New York law employers are generally free to terminate employees as they see fit, absent an agreement to the contrary or some improper purpose (such as retaliation or discrimination). But a recent decision of the First Department has added a narrow, but potentially substantial, exception to that well-established rule. In Laduzinski v. Alvarez & Marsal Taxand LLC, 16 N.Y.S.3d 229 (1st Dept. 2015), the First Department reversed the lower court’s order granting defendant’s motion to dismiss, and allowed plaintiff to go forward on his claim of fraudulent inducement against an employer he claimed had lured him away from his old job and subsequently fired him when the new position didn’t work out.

In Laduzinski, plaintiff sought a job with defendant Alvarez and was told by an Alvarez managing director that they had “a lot of clients and were busy.” On that basis, plaintiff allegedly quit his job at J.P. Morgan and went to work at Alvarez, giving the company access to his contact list for business development. Nine months later, Alvarez fired the plaintiff because there was insufficient work for him. Plaintiff claimed that Alvarez had never really had a job for him—that that they simply wanted to lure him over so they could get access to his contacts. The lower court dismissed plaintiff’s claims arising from his termination because plaintiff was an “at will” employee. Plaintiff had asked for a two-year employment guarantee from Alvarez during his contract negotiations, but Alvarez had refused and in the end plaintiff agreed to “at-will” employment.

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