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Singer v. Beach Trading Co. Inc.

379 N.J. Super. 63, 876 A.2d 885 (App. Div. 2005)

EMPLOYER-EMPLOYEE; NEGLIGENT MISREPRESENTATION — An employer may be held liable for negligent misrepresentation if it unreasonably provides false or inaccurate information about its former employee, the person providing the false information is acting within the scope of his/her employment, the new employer relies on its accuracy, and the ex-employee suffers damages proximately caused by the misrepresentation.

A woman worked in the customer service department of a trading company. She never had a specific title. Most of her duties were those of a customer service representative, but she was also given certain management responsibilities from time to time. After working for about a year, the woman began looking for new employment. She took a new job as a customer service manager based on the job experience in her resume. She was not performing well as a manager at the new company, so her employer decided to call her former employer at the trading company to inquire about the woman. The new employer called the trading company several times, but he did not identify himself or ask to speak to the woman’s former supervisor. Instead, he concealed his identity and asked general questions about the woman to whoever answered the phone. Through these conversations, he was told that the woman had worked at the trading company as a customer service representative, and not as a manager as she had represented on her resume. As a direct result of this information, the new employer fired the woman. She then sued her former employer and former supervisor for defamation, tortuous interference, and negligent misrepresentation. In response, the former employer filed a motion for summary judgment on all of the claims, which the lower court granted. However, in reaching its decision, the lower court failed to address the woman’s action for negligent misrepresentation and the woman appealed the lower court’s ruling.

The Appellate Division reversed the lower court’s ruling with respect to the woman’s claim for negligent misrepresentation. It discussed the standard for establishing a cause of action for negligent misrepresentation causing economic loss. It held that a negligent misrepresentation claim can be based on a negligently made, incorrect statement, that is justifiable relied on. The party bringing the action may recover damages for the negligent misrepresentation if he or she suffered an economic loss as a result of the statement. The Court found that in order for the woman to succeed on the negligent misrepresentation claim, she had to show that her former employer owed her a duty to exercise reasonable care in communicating facts about her to her new employer, and that her former employer breached this duty. The Court held that these were all factual issues for a jury to determine and therefore, the lower court should not have granted summary judgment with respect to the woman’s negligent misrepresentation claim.

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