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Legal Clinic

Verbal Miscues in Recruiting

Is a company liable for a benefit that was verbally offered a successful job candidate by a mistaken recruiter? And does providing such a benefit to one employee but not others create any kind of precedent?

Monday, May 21, 2007
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Employers are continually seeking to identify appropriate benefits and job perks that will serve as inducements for recruiting, improve employee morale and enhance retention rates. But what happens when a recruiter offers a benefit that goes beyond the company's current policies? This month's column addresses that question in the context of tuition reimbursement, as well as the benefits and challenges of offering sabbatical leave to employees.

Question: A manager verbally offered tuition reimbursement to a candidate. This candidate has been hired and is now asking for this benefit. We do not have it in writing in this employee's offer letter, nor do we have a tuition-reimbursement policy at our company. Are we liable for paying for his tuition? What kind of precedent are we setting if we pay for his tuition? Also, if we create a tuition-reimbursement policy, can we stipulate that the classes must be job-related?

Answer: Whether an employer is bound to an employment term verbally offered by one of its managers, e.g., tuition reimbursement, will depend on the facts of the case, and will also vary by jurisdiction. The mere fact that the employee does not have a written employment agreement containing the term would not automatically foreclose the employee from asserting a claim against your company. 

For example, the employee might have a claim for fraudulent inducement if the employee can show he/she chose to work for your company over another position in reliance on the tuition-reimbursement benefit, and particularly if your manager had offered the tuition reimbursement specifically to entice the employee to work for your company instead of another employer. However, at least one court has held that an employer's promise of future action could not support a claim for fraud. In Parks v. City of Evanston, 139 Ill. App. 3d 649, 487 N.E.2d 1091 (1985), the court dismissed the employee's claim for fraudulent inducement with regard to tuition reimbursement, even though the employer had promised the benefit in a newspaper advertisement and the superintendent made a similar promise during the employee's interview.

Separate from your legal obligations, you may want to honor the tuition-reimbursement benefit, at least for one semester, as an employee-retention tool. Providing this benefit to one employee in these circumstances is an exception, and need not set a precedent. There are, however, a fair number of employers who offer tuition reimbursement to their employees. These policies generally require at least some tangential relationship to the employee's position or his/her future career development. So long as you administer the tuition-reimbursement program in a non-discriminatory manner, you should generally feel free to decide the parameters of the reimbursement benefit.

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Question: We are considering a paid sabbatical leave policy. What are some of the benefits, challenges and pitfalls? 

Answer: Employers may wish to offer sabbatical leave to employees for several reasons. As with any other benefit, sabbatical leave may help the employer attract and retain quality employees. Moreover, employees may use sabbaticals to enrich themselves in ways that will, in turn, enrich the employers for whom they work. 

Sabbatical policies should be carefully drafted to address such issues as eligibility for leave, duration of leave, reinstatement rights and whether employees are entitled to collect and/or accrue other benefits while on sabbatical. Careful drafting will reduce the likelihood of disputes over these issues and can address whether and to what extent an employee accrues a vested right to a sabbatical-leave benefit. 

Finally, in administering a sabbatical-leave policy, as with other discretionary benefits, the employer should ensure the leave is being offered to employees on a non-discriminatory basis.

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