Employee Defamation - Breaking up is hard to do
By R. Scott Tobin, Esq.
In an increasingly mobile and labor-scarce woodworking and furniture industry, it is the rare employee who starts a career with a company the day school ends and is around to collect the proverbial gold watch 40 or 50 years later. Hiring, firing and employee free agency are endemic to the modern workplace.
Most employers are aware of the huge body of "thou shalt not discriminate" laws that govern the hiring and firing of workers, but few appear mindful of a growing body of law that protects workers not only from what you do while they work for you but from what you say, or even do not say, when they are gone.
At its most egregious, this body of law places the employer at greatest risk when he has done the right thing in terminating an employee for what the employer believes to be unacceptable workplace conduct. In such cases, the courts have found that because discharged employees must communicate the reasons for their discharge to prospective employers, discharging employers are liable for any false and defamatory information the former employees "must" communicate.
These so-called "compelled self-publication" cases create a dangerous exception to the usual rules of defamation law. In the usual defamation case, to be liable, you must publish defamatory material to one other than the plaintiff. Publication is a term of defamation law art - it need not involve the mass communication suggested by the word. Defamatory communications to even one person, other than the plaintiff, are usually sufficient to satisfy the publication requirement.
But because the law requires this publication to at least one other party (a third party), you are free to speak your (nondiscriminatory) mind in your private communications with your present or former employees. On top of this, in many jurisdictions the law affords a limited privilege to employer communications about employee job performance, even when made to third parties in a business context. Rather than test the limits of such privilege, today, many prudent employers confine their comments to prospective employers to the name, rank and serial number of their former employees.
The problem for employers with the "self-publication" cases is that it is the ex-employee who does the talking to prospective employers, and it is the former employer who is liable. For example, suppose you fire a male supervisor because of evidence that he has sexually harassed his female subordinate. Both as a matter of policy and practice you do not reveal the reasons for termination to his prospective employers. In fact, no one even calls to ask why you fired him. You do not even contest unemployment benefits by revealing the reason for termination. Yet when this former employee reveals the reasons for termination to his prospective employer, you are the one who is at risk for liability for defamation, and you may have your workplace decision put on trial.
As an employer trying to do the right thing, this of course leaves you where you too often find yourself where the law is concerned - between a rock and a very hard place. You could stop talking, even to your employees, about reasons for discipline and termination, as a dissenting judge in a self-publication case once opined, but in most cases this would be impractical, unproductive and legally risky.
As a practical matter, because you cannot control what a former employee says about his termination, your best protection is in carefully investigating and documenting your workplace decision. For instance, in the unfortunate sexual harassment case described above, make sure you get both sides of the story before taking action, that the action you take is consistent with your personnel policies (which should be in writing) and that you contemporaneously reduce all conversations you have and witness statements you take on the subject to a confidential (stick to the facts) writing. As with other defamation actions, truth remains a defense to the self-publication case, but to use it you must document it.
Scott Tobin practiced corporate law in Atlanta for 17 years before joining the management team of Industrial Computer Corporation, a longtime client and leader in manufacturing execution systems software. Following his negotiation of ICC’s sale in 1998, Scott is now a principal of the Atlanta- and High Point-based venture catalyst firm Synergy Ventures, LLC. He can be reached through Modern Woodworking at 770-399-5114 or 336-882-0120.
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