National Medical Health Card Systems Inc. v. Fallarino

This action was commenced by Plaintiff, National Medical Health Card, Inc. (NMHC), against its former employee, Defendant, Joseph Fallarino. Fallarino then counterclaimed seeking money damages for breach of contract by wrongful termination.


When Fallarino applied to the job at NMHC, he falsified information on his resume. In the process of the interview process, no one at NMHC ever did a thorough enough background check to discover the inaccuracies in Fallarino’s resume. He was hired in June of 2004. Early 2005, two women that worked under Fallarino accused him of sexual harassment. In March, NMHC fired Fallarino due to allegations of sexual harassment. Upon his termination, the company offered Fallarino an ultimatum, he could receive one-half of the severance previously agreed upon or he would be fired for cause and lose his benefits, get a bad reference, and receive no unemployment.


Following his termination, NMHC discovered the omissions and misstatements in Fallarino’s resume. They then brought about this action against Fallarino claiming fraud and therefore a breach of contract which meant they would not owe him any severance pay. The Court felt that NMHC could have discovered the false information on Defendant’s resume prior to hiring him since they were, in fact, able to confirm the inaccuracies after his termination. Also the company did not suffer any damages due to Fallarino’s alleged fraud.


In regards to Fallarino’s counterclaim, his termination was wrongful because the two reasons given for his termination were inadequate. The first reason, the misstatements in his resume, could not serve as a basis for his termination because NMHC had adequate opportunity to investigate Fallarino’s background but chose not to and did not do this research until after firing him. Also, the alleged sexual harassment charges could not serve as a basis for his termination because the instances were isolated and uncorroborated and did not legally rise to the level of actionable sexual harassment warranting the rapidity of the firing. The evidence did not demonstrate a concrete basis under the contract to fire Fallarino.


Accordingly, 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.