I. Job Misrepresentation

When hiring employees, particularly sales applicants, interviewers should be careful of "overselling" by making guaranteed earning claims. For example, when you tell an applicant, "If you come to work for us, I have no doubt you'll make $100,000 in commission this year based on what our other salespeople make," you may be making an illegal statement. The Federal Trade Commission considers such statements to be an unfair and deceptive trade practice if you promise an amount that exceeds the average net earnings of your other salespeople. In fact, the applicant has the right to ask you to show him/her the wage statements (i.e., W-2's or 1099's) of other sales- people within the company to prove your claims.

One of the oldest ways of luring an executive salesperson away from a current employer is to predict increased earnings if they come to work for you. Unless the recruiter talks specific numbers ("The last man in your job earned $50,000 last year. You'll do even better.") or presents records that falsify previous earnings, your company should avoid the likelihood of the misled executive winning damages in a lawsuit. Typically, many recruiters talk rosily about future earnings, but it is prudent to discuss potential earnings with applicants using words such as "it is possible," or "you may make," rather than making guaranteed earning claims, to avoid problems.

A company does not commit fraud merely by painting a job with glowing colors to a prospective employee and suggesting that a great future may await him or her. When a company representative predicts probable earnings, these predictions are mere opinions and not statements of fact actionable by law. However, a company should be careful about making special promises based on conditions that do not presently exist.