Employers Do Not Have Duty to Predict Future Economic Conditions of Company

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March 21, 2005

When is an employer guilty of misrepresentation when recruiting employees? In Bellon v. Ripon College, Christina Bellon sued her former employer, Ripon College, for misrepresentation to induce employment. At the District Court level, Ripon College prevailed. The Court of Appeals ruled in favor of Ripon College, and held that an employer is not required to disclose a prediction of future economic events when interviewing candidates for employment.
 
Bellon was a tenure track faculty professor who was in the process of applying for teaching positions at various universities. Bellon applied for a position at both Ripon College and the University of Nevada, Las Vegas. Ripon College’s Vice President and Dean of Faculty at the time represented to Bellon the value of the College’s endowment, and informed her that the College’s comprehensive plan was to raise faculty salaries to be more competitive with comparable institutions. Despite the fact that Bellon received an offer for a similar position at the UNLV, with a higher salary, Bellon accepted the position at Ripon College. After a year of employment at Ripon College, Ripon notified Bellon that the Ripon Board of Trustees were going to eliminate her position at the College due to budget circumstances. Bellon then filed suit against Ripon College based on misrepresentation.
 
Bellon argued that Ripon had a duty to disclose more information than the value of the school’s endowment, and should have disclosed the school’s future economic outlook. The Court disagreed, and held that “the general rule is that silence, a failure to disclose a fact, is not misrepresentation unless the disclosing party had a duty to disclose that fact.” The Court also held that Ripon College had no duty to predict future economic events when interviewing candidates for a position and ruled in favor of Ripon.
If you have questions regarding the above, please contact any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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