Important Win for Employee in Fraud Case Against Employer
It’s not often that employees sue their employers for fraud, but that’s what Dan Rather did when he sued CBS in 2007. The news is that he had a significant victory this week in his case.
As some of you may recall, Rather filed a lawsuit claiming that his career was irreparably damaged because CBS intentionally mishandled a 2004 story about Bush’s National Guard service.
The story had to do with Bush’s allegedly going AWOL during his National Guard Service in 1972. The story was aired on CBS’s Sixty Minutes II during the 2004 election.
According to Rather’s lawsuit, the broadcast reported that:
- political influence was used to get Bush into the TexANG so he wouldn’t have to go to Vietnam
- after being trained as a fighter pilot in 1972, Bush failed to appear for a required physical examination
- high level political influence was again engaged to avoid military discharge from the military
[E]vidence (from the Boston Globe and others) strongly suggests that George W. Bush literally bailed on his Guard duty, got a transfer to Alabama, and then disappeared for at least the final 12 months of his military commitment, perhaps up to 17 months. Some have a lost weekend; he had a lost year.
After the story aired, according to the complaint, the broadcast was attacked by conservative political elements supportive of the Bush Administration.
In turn, CBS announced that it was going to conduct a thorough independent investigation into the story of the broadcast and its production.
Instead, according to Rather:
Its intention was to conduct a biased investigation with controlled timing and predetermined conclusions in order to prevent further information concerning Bush’s TexANG service from being uncovered.
The complaint further alleges that CBS:
1. planned to and did use Rather as a scapegoat to pacify the White House
2. coerced Rather into publicly apologizing and taking personal blame for errors which were a )never established and b) not Rather’s fault
3. breached its employment contract with Rather by terminating him as anchor on the CBS evening news and thereafter giving him few assignments, little staff, little air time, and basically nothing to do
The Fraud Case
Generally speaking, in cases of fraud, an individual must prove:
- a material representation of a presently existing or past fact,
- made with knowledge of its falsity and
- with the intention that the other party rely on it,
- resulting in reliance by that party
- to his or her detriment
While there is no set way in which fraud claims come up in the employment setting, they are often seen when an employer lures an employee away from a secure position to a new job based on representations which turn out to be false.
They also come up when an employer makes false representations to employees to get them to stay on the job after they announce an intention to leave.
The meat of these cases show that representations were made (either spoken or written) which were known to be false with the purpose of inducing the person to rely on them.
The second part of the proof involves a showing that the person did in fact rely on the false statement(s), and that he or she was damaged as a result.
In Rather’s case, it is claimed that CBS, as well as individually named defendants, made false representations, which they knew to be false at the time they were made, and which they had no intention of fulfilling, including the following:
- CBS intended to conduct a fair and impartial investigation of the broadcast
- CBS would at all times take all necessary steps to preserve Rather’s reputation
- CBS intended to fully utilize Rather’s experience
- If Rather refrained from retained a private investigator to investigate the story underlying the broadcast, CBS would retain one and make the findings available to Rather
- CBS was going to extend his contract
All of these representations were false, according to Rather, and made so that Rather would refrain from making public statements concerning the Bush broadcast in order to defend himself and preserve his reputation
As a result, according to his compliant, his career were irreparably damaged, he was ostracized, and he gave up significant employment opportunities.
(There appears to be an amended complaint which may have more detail but that’s the gist of what’s I could find)
What happened this week is that the fraud claim, which was previously dismissed, was reinstated by the Court of Appeals in New York — a big victory for Rather and his lawyers. It also, in theory, gives Rather the opportunity to get punitive damages awarded against the defendants.
Court Orders Documents Produced
The other victory for Rather this week was that he won access to documents needed to help him prove his case. According to the New York Times story on Wednesday:
Dan Rather won significant victories Tuesday in his suit against his former network, CBS. He won access to more than 3,000 documents that his lawyer said were expected to reveal evidence that CBS had tried to influence the outcome of a panel that investigated his much-debated “60 Minutes” report about former President George W. Bush’s military record.
The documents include e-mails between the panel members and a law firm it hired to do investigative work on the case.
The firm refused to turn over the documents to Rather claiming attorney client privilege. The Court ruled that the work done by the firm was not privileged and ordered that the documents be turned over to Rather within 10 days.
Since law firms are often hired by companies to do investigations of employment complaints, this ruling may have broader implications than the Rather case.
It appears, at least from this ruling, that firms retained to do investigations may have to produce their work without the benefit of attorney client protection in some instances, and that’s big news .
The Rather case is certainly interesting because of both its legal and political implications.There are some who think it will not end well for CBS. It’s a case we intend to watch.