Candidate Lies, Recruiter Doesn't Check, Company pays Severance Ben...

National Medical Health Card in Port Washington, NY hired a recruiter to help recruit a new head of HR. This recruiter failed to uncover that the person eventually hired concealed two years of employment with two employers, although the recruiter did check the references - as requested by NMHC (I write this because this gets juicier).

Fallarino was hired in June 2004 the under an employment contract that specified the granting of severance benefits unless terminated for cause. Early 2005, Mr. Fallarino was accused by two HR employees that he had sexually harassed them; NMHC conducted a brief investigation and stated that with the company about to be sold, pending allegations would sour the sale.

They offered Fallarino a choice: Receive 50% of the severance or be fired for cause, lose all benefits, receive a bad reference, and receive no unemployment.

After the termination, the company learned of the "gaps" on his resume and claiming fraud, sought to have the employment contract and the severance provision rescinded. At trial, the court concluded that NMHC didn’t exercise due diligence in hiring him, wasn’t defrauded, and ordered NUMC it to pay Fallarino $191,000. NUMC appealed and lost.

In the decision, the court questioned whether resume fraud was sufficient basis for NMHC to rescind his contract. Testimony at trial showed that NMHC, its recruiter, and its interviewers failed to uncover Fallarino's true employment history. The recruiter - remember the recruiter? - testified that NMHC had not authorized him to check prior employers, only references.

"The Court ordered that Fallarino is entitled to the salary benefits, and car allowance, together with interest from the date of his termination as well as other benefits under his contract."