My name is Russell Deutsch and my wife and I own a small restaurant in Redwood City, California named the Old Port Lobster Shack (www.oplobster.com). We opened our restaurant in January of 2006 and have been steadily growing ever since and are successful in this location. I am blogging to start a dialog about a problem that I encountered that has almost put me out of business and caused my family to go into bankruptcy. Specifically, I am working on having legislation adopted in California to stop this problem from happening to other businesses in the future. The problem that I am referring to is résumé fraud.
In the summer of 2005 when I had found the location to build the first Lobster Shack, I lost a key member of my team, my chef from Maine. We advertised on the Internet for a chef, and after searching we were put in contact, through my dentist, with a young man that was a chef living at home. We spoke on the phone and I learned he was unemployed at the time and subsequently provided him with the job description. About 10 days to two weeks later he emailed us his “updated” résumé and it seemed to be a perfect fit. My wife and I were very excited to have him on our team.
After a couple of months of discussing our ideas with this alleged “chef”, we decided to make him a partner of our company with conditions. His father, an inactive attorney, gave us advice to become shareholders instead of partners and wrote the agreements for all of us. The result of those agreements gave him 25% of my company with an option to purchase up to 49% in five years. We were specifically informed by this inactive attorney that there was a six month period before the initial shares vested and that this was a “trial period” so that we could see how he performed as a chef.
Well, he almost put us out of business before we opened the doors with his egregious over spending, and that certain purchases must be made based on his experience. When we did open, he was incapable of cooking what was on the short menu let alone plan, organize, train employees, or execute the essential functions of a restaurant. We terminated his employment after three weeks of opening the doors for business.
He then proceeded to file a lawsuit against us with 26 causes of action. Included in this civil lawsuit were wrongful termination causes of all varieties - missing meal breaks, missing rest breaks, overtime pay, reimbursement of expenses to name a few, and discrimination due to his alleged Attention Deficit Disorder. This he filed with the state of California under the Fair Employment and Housing Act.
During the investigation process, we found that his résumé was a complete fabrication. Everything from dates of employment, job descriptions, educational achievements (which initially lured us), and his alleged unique abilities were all fraudulent.
This entanglement has cost my family over $700,000 in legal fees to defend ourselves against this lawsuit. That's right, over $700,000. We filed a counter-suit with allegations of fraud, and after a three year battle he dismissed his entire lawsuit, and we dismissed our counter-claims. We did successfully settle with the father for writing the agreements that became an issue in the suit, and he is suppose to pay us some money. However, this amount will not nearly cover our legal fee obligations, much less the emotional roller coaster we have had to go through with two young children. This is a classic case of malicious prosecution.
Résumé fraud is a crime now in at least 11 states. These states have enacted laws that make misrepresentation of employment qualifications a criminal offense. Five states—Kentucky, New Jersey, North Dakota, Oregon, and Washington—have classified this practice as a felony punishable by several years in prison. The remaining states consider résumé fraud to be a misdemeanor. This information is directly from The Bank of New York Mellon Corporation and St. John’s University article Lying On The Employment Résumé: Is It Illegal? by Sam H. DeKay, Della L. DeKay that I have linked here: http://www.businesscommunication.org/conventions/Proceedings/2008/13ABC2008.pdf
With the current downturn in the economy nationally, and in California specifically, businesses need the added protection of a law to help to curb résumé fraud, not to mention frivolous lawsuits as a result. Without this law in California many other businesses will fall prey to unscrupulous job seekers that doctor résumés to fit jobs or job descriptions, while lacking the skills required for these positions.
This unfortunate circumstance has cost me dearly, and may cost me my business and home. We have already borrowed from retirement accounts, family and high interest (73%) business loans to get to the point where the parties that were suing us just walked away and continue to misrepresent themselves on websites, TV, and in the print media.
I would like others to discuss this matter and see if there is anyway that we can get a bill written in California, and other states, that would make résumé fraud an actual crime. The business community and I would be very grateful to anyone that can help move this cause forward. We need laws enacted that put real penalties in place for lying on résumés, and protect businesses from the malicious prosecution that could result from the termination of these individuals that provide false résumés.
I hope that others that have had to endure what we have write and let us know. The more people whose lives have been negatively impacted by this problem will show lawmakers that there is a real need for this type of legislation. We have an epidemic in this country that is out of control and very costly for businesses . We need to stop this before before it ruins others lives in the way that it has done mine.
