July 23rd, 2025
Wrongful Termination of A…

Maryland, like most states, follows the at-will employment doctrine, generally meaning that an employer can terminate your employment at any time, for any reason or for no reason at all, and with or without notice. Likewise, as an at-will employee, you are free to resign at any time, with or without notice, and for no reason at all. Of course, there are obvious exceptions (such as an employment contract, statutory protections, public policy reasons, etc.), but Maryland also recognizes an exception where an implied contract – an oral or informal agreement – exists between you and your employer. And, instances of detrimental reliance or negligent misrepresentation by the employer are given recognition as supporting factors in a wrongful termination suit.

Detrimental reliance can arise in situations when your employer's actions, such as specific promises or consistent policies, create an implied contract, even if those policies or promises are not explicitly written. Negligent misrepresentation can occur in situations where your employer has failed to exercise reasonable care in making statements relating to significant aspects of your employment, such as the details of your compensation, benefits, special accommodations, or job duties.

DETRIMENTAL RELIANCE

To establish a claim for detrimental reliance, you must satisfy a four-part test:

  1. a clear and definite promise was made;
  2. the promisor reasonably expected that the promise would induce action or forbearance by the promisee;
  3. the promise actually induced reasonable action or forbearance by the promisee; and,
  4. a detriment resulted that can only be avoided by enforcing the promise.

This four-part test was established in Maryland case law through Pavel Enterprises, Inc. v. A.S. Johnson Co., 342 Md. 143, 169, 674 A.2d 521 (1996), which adopted the Restatement (Second) of Contracts § 90(1) to “resolve confusions… [and] clarify how Maryland courts are to apply the test….” Pavel at 166. The Pavel court observed, “[T]here are different ways to prove that a contractual relationship exists. . . . Traditional bilateral contract theory is one. Detrimental reliance can be another." Pavel at 169.

It is important to understand that a detrimental reliance claim will not be successful without the fourth element. The first three elements alone – though they might show that you relied to your detriment – are insufficient unless injustice will result if the promise is not enforced. This is particularly applicable when fundamental fairness requires that the promise be enforced, such as when an employee has acted to his detriment based on an employer's promise.

NEGLIGENT MISREPRESENTATION

Negligent misrepresentation arises when one party, who has a reasonable duty of care to communicate information to another, breaches that duty causing financial or personal injury to the other. One primary example recognized by Maryland courts is in the employer-employee relationship. See, Griesi v. Atlantic Gen. Hosp. Corp., 360 Md. 1, 11 (2000). The key to negligent misrepresentation is that there must exist a duty of care, and Maryland courts consistently find that such a duty exists in an employer-employee relationship. Id., at 13.

A claim for negligent misrepresentation is subjected to a 5-point test:

  1. the employer, owing a duty of care to the employee, negligently asserts a false statement;
  2. the employer intends that his statement will be acted upon by the employee;
  3. the employer knows that the employee likely will rely on the statement, which, if erroneous, will cause loss or injury;
  4. the employee justifiably takes action in reliance on the statement; and,
  5. the employee suffers harm caused by the employer’s negligence.

Your employer has a duty to provide accurate and reliable information throughout your employment. Negligent misrepresentation does not require that your employer intended to deceive you; rather, simply being careless or failing to exercise reasonable care in verifying the accuracy of the information provided to you can create liability if you have reasonably relied on your employer’s representations and suffered damages as a result. Such representations can be made in several ways, including spoken statements, emails, meetings, or other communications.

A promise made by your employer, even without a formal contract, might be enforceable if you made decisions based on the promise(s) and as a result, you face a loss of job security or financial loss.

CONCLUSION

Both detrimental reliance and negligent misrepresentation may not be causes of action on their own; however, they can be valid claims that support actions for wrongful termination or constructive dismissal. If you can demonstrate you relied to your detriment on a promise from your employer, and that your reliance either led to a termination that violated an implied contract or created an environment that forced you to resign, then your employer might be held liable. Similarly, if your employer carelessly made false statements about working conditions during the course of your employment, it might be liable for negligent misrepresentation, even under the at-will employment doctrine in Maryland. Employees who suffer losses due to such misrepresentations may have grounds for a legal claim.

If you have questions about this article, or about wrongful termination in general, please contact Denise Reverski (dreverski@setlifflaw.com) at (804) 377-1272 or Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261.