What to do if an employer disclosed more info than they said they would to a prospective lender?

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What to do if an employer disclosed more info than they said they would to a prospective lender?

Bank called employer for employment and pay verification for mortgage refinance. I had a severance contract that ended the same month. HR director said they would only confirm current contract is in existence and the amount. When the bank called a payroll employee disclosed terms of my contract including that it ended at the end of the month. Bank cancelled refinance based on this info. Is there any case against the employer?

Asked on January 8, 2012 under Employment Labor Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If the severance contract included some nondisclosure or confidentiality clause, then the employer may be liable if they violated  it. However, without a specific, contractual obligation to keep this information confidential, there is no duty to do so--that is, without a confidentiality obligation, the employer may disclose when the contract ends. Indeed, arguably, if they did not disclose that fact, they could have been liable to the bank if you received the refinancing, then failed to make payments, since they would have implicitly led the bank to believe that the contract, and whatever payments you were getting under it, were continuing when they were not.


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