Defamation at Work

 

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Defamation Disclaimer: The following is a fictional account of a workplace defamation case.   The facts are deliberately balanced for and against each party to give an idea of the complexity of the case, and the reality that the employee must surmount serious defenses. The story is not based on actual persons or employers. Any similarity to a real life employment or personality is completely coincidental. Any names that also happen to be the names of real persons are random and not based on any actual events.

Defamation – Darla’s Disgrace

Darla works at Elixir Medical Device Company. She’s an outside sales person who sells advanced designed crutches for all ages. She’s worked for the company for 10 years. She’s one of five such sales people, and she’s consistently been at the top one, two, or three of the sales force. In the last year she was number one in sales, and she’s on track to be number one again this year. Her boss, Maria, started four years ago with the company, and also was in sales. The relationship between Maria and Darla was never good. They were very competitive. A few times Maria made number one over Darla. When the management position came up about 6 months ago, Maria was made manager because of her management experience at another company.

Shortly after her promotion, Maria overheard Darla say to co-workers, that Maria’s six-year-old daughter could never win a beauty contest. “How could she? She looks just like her mother.” The group was looking at pictures of the contestants that Maria had brought to work that day. Maria can still hear her coworkers laughing at Darla’s comment.

Although unusual, Maria decided to give all her employees interim six-month evaluations. With the exception of Darla, Maria gave most of her employees “meets expectations.” This low rating was unusual in the department. Maria explained that ratings had been too generous in the past, and that excellence meant more than just meeting the requirements of the job.

However, Maria gave Darla the lowest rating of the group. She noted Darla’s attitude was often “unenthusiastic” and sometimes blatantly “negative.” Maria also wrote in the evaluation: “You have been so unfocused and erratic in your work performance that frankly I suspect that you are under the influence of controlled substances. For that reason, I am referring you for a drug testing as a condition of your further employment. You will be on suspension until we receive the drug-testing results.”

Darla had been taking some pain relief medication prescribed by her family doctor, as well as an anti-depressant to help her cope with stresses at work.   Fortunately, she read the pre-testing instructions, and so she knew to disclose these prescribed drugs before the test. Darla knew the medications made her drossy, but she didn’t want to disclose to Maria that she was depressed. She knew Maria would use that against her.

The drug tests proved negative. On the day Darla returned to work, she went to Human Resources manager, Sylvia, to complain the testing and the evaluation were not just unfair, but hostile.

“She’s a tough manager. Everyone got lower evaluations,” Sylvia said.

“But she’s tougher on me. She’s out to get me.”

“Why?”

Darla couldn’t answer. “I don’t know. She just hates me.”

“I want the evaluation removed.” Darla said firmly.

“I can’t do that,” Sylvia said. “Everyone wants a good evaluation. I’d be removing everyone’s rating before long.”

“But she said I was on drugs!”

“She said she suspected it. Besides, she’s entitled to her opinion,” Sylvia said.

“Thanks a lot,” Darla said, just short of slamming the door behind her.

Over a coffee break, Sylvia in H.R. mentioned to Maria that Darla had complained that that Maria was “out to get her.”

“Nonsense,” Maria said. She’s just jealous. She thinks she knows more than anyone, and resents being managed.”

But Maria was secretly furious that Darla had gone to H.R. She couldn’t sleep at night wondering if Darla was planning some new charges against her. She wasn’t going to let Darla get her fired. Maria’s husband had just lost his job, and their daughter’s rise in the beauty contest world was costing more and more in entry fees, dance lessons, costumes, and travel and hotel expenses. Maria decided to strike first.

One week later, Maria called Darla into her office. Sylvia was there also.

“We’d like to ask you a few questions.”

“About what?”

“Did you see Dr. Weinstock last month?”

“I may have. It’s been several weeks. I can’t remember.”

“Did you see Dr. Alice Gerry in January?”

“Wait a minute, what’s this about?”

“Your calendar shows you made visits to these doctors,” Maria said. She looked through some reports on her computer while talking to Darla. “You also reported these visits on your activity logs.”

“Then yes, I saw them.”

Maria looked up from the computer, and stared. “Are you sure?”

“Are you saying I lied?”

Now Sylvia spoke. “We talked with the doctor’s offices. No one remembers you being there.”

“They should have my appointment with them on their calendars.”

“Oh, they do, but you cancelled those appointments,” Sylvia said.

“If I did, then I’d show the appointment cancelled on my calendar too. Everyone sees my calendar.”

“The appointments were not cancelled,” Maria said. “Here, look for yourself.” She swung the monitor around.

“Look, I get busy.   I may have overlooked entering the cancellation.”

“Then why did you repeat the error when you sent in the activity report?”

“I just wanted to get the report in on time. I must have forgotten to make the change.”

“This is serious,” Maria said. “I can’t let this go unaddressed.”

Darla looked at Sylvia, but saw no support.

“What are you going to do?”

“You’re on an unpaid leave of absence. We’ll let you know when our investigation is complete.”

One week later, Sylvia called Maria.   “I’m sorry, but we have to let you go.”

“Are you saying I lied?”

“We really don’t want to discuss it.   You’ve been dishonest. You’ve created false business records. I’m sorry. We have no choice.”

Defamation: Did it Happen to Darla?  

The Factors Used to Test the Case

 

What was said or written?   [Important because the details matter, and must be pled with specificity in a formal court complaint.]

• You performed below expectations.
• You produced false “call reports.”

Were the statements made as “fact” or “opinion?” [Why important: An “opinion” is not a false statement of fact. “Opinions are not defamatory.]

• “Below expectations” – likely opinion unless supported by specific “facts.”
• “False reports,” – stated as “fact.”

Was the statement “published,” i.e., communicated to a “third party”?

This question is important because there can be no loss of reputation if the statement is never communicated except to the party accused.

• Maria communicated the performance evaluation to Sylvia. Sylvia by law is a “third party” although also an agent/officer of the employer-Company. [Important: individuals within a company are not the Company. The company may be liable for the publication if it condones, approves, or fails to address the communication once aware of its internal publication.]

• Maria communicated the “false report” to Sylvia and the doctors’ staff. The doctors’ staffs are third parties.

• “Published” simply means communicated – and may be “spoken.” Further, a repetition by other parties is a “re-publication.” Each “publication” is a new “cause of action for damages,” when a foreseeable consequence of the first publication.

Was the communication privileged?

This question is important, because the “employer” or its agent has a license to make false, even defamatory statements based on negligence, but not if the statements are malicious.

A “privileged” statement is one concerning a “common business interest.” The “privilege” is “conditional” in the employment context – that is, the privilege is conditional on the statement being made without “malice.” “Malice is liberally defined as a “reckless disregard for the truth, which itself means there was “no reasonable basis” for believing the statement to be true.

• The two statements: one an evaluation rating, and the second, a statement of falsifying sales call reports, both concerned Darla’s work performance, and were conditionally privileged.

• The first statement, the evaluation rating, was an likely an “opinion, but if it rose to the level of “fact” it was not likely malicious, unless there was evidence Maria knew Darla was on prescribed medication. The medication did cause drowsiness, and a manager in modern society may have reasonable concern about drug use on the job.

• The second statement that Darla misrepresented her call reports may be conditionally privileged if there was a good faith inquiry of the doctor’s staffs, and some confirmation that Darla was not there when she reported she was. [Truth is a defense to defamation.] On the other hand, if the evidence is that Darla was there as reported, and there was no effort to contact the doctor’s office to confirm a mere “suspicion,” then the accusation is without reasonable basis, and is the kind of “reckless disregard” for truth that would remove the privilege.

• When we add the element of Maria’s motive to lie or confabulate, malice looks even more likely. But note motive is not required – just useful, to the proof. Added to the “motive” in Darla’s case is Maria’s anger at learning that Darla reported her to H.R. There is also Maria’s resentment at Darla’s disparagement of Maria’s daughter as a beauty contestant.

Did the communication concern Darla’s occupational competence, and did it cause her humiliation, embarrassment, or loss of good reputation?

This question is important both subjectively (i.e., the actual feelings of the employee) and objectively (that is, the reasonableness of the emotional response given the circumstances and content of the communication). A defamatory statement about work competency is presumed to cause at least emotional damages, and can proceed without proof of economic (wage) loss.

• The statements concerned Darla’s work performance, and are “defamatory per se” if false. Defamatory “per se” means there is a presumption Darla is injured and has sustained “damage” to reputation.

• Subjectively, Darla is hurt, angry, and humiliated at being ranked so low after working at top level so many years to build status and reputation in the company. Objectively, her response to being ranked at the bottom of her peers when previously at the top, and also being accused of lying about her call reports, is reasonable under the circumstances.

• Beyond Darla’s own testimony, the co-workers who heard or know of the statements may testify that they saw her in a less favorable light because of the statement(s).

Did the defamatory statement “cause” Darla’s loss of employment and/or her emotional injury?

• This will be the central battle at trial. The employer will argue that ultimately, there were other causes of Darla’s loss, and will focus on her poor performance, and trying to prove that Maria’s actions in firing Darla were based on a good faith reasonable belief that she had falsified her call reports.

How much should Darla receive as compensation?

• This question goes to her legal “damages.” Many employer-defendants fail to see that even without economic damages, the emotional injury associated with defamation can produce large damage awards, especially if Darla has a sterling work and personal reputation before the defamation. “Good reputation” is relevant in a defamation case, and witnesses can testify to Darla’s prior reputation in the work community.

Defamation Defenses and Counterattacks

Defamation cases will often be attacked at an early stage in the litigation as restricting the employer’s constitutional right of free speech. This attack is called an “anti-SLAPP” motion. Its power is in its timing and in the burden shifting. The employee will have to gather her evidence quickly in the first weeks of litigation to defeat the motion, which will require her to prove by a preponderance of evidence that she will, more likely than not, prevail at trial.

Defamation Insurance

A second consideration is insurance coverage. Defamation is a specific covered liability in standard business insurance policies. This coverage is unlike the more limited and less reliable coverage found in “Employment Practices Liability” policies. The presence of insurance coverage improves the likelihood that funds will be available to pay a verdict, or conclude a settlement.

Defamation: The Last Word

This article has presented a completely fictional account of how defamation can occur in the workplace, but it also illustrates fairly common circumstances. As we all want to know the outcome, and because I have complete creative liberty to determine the verdict, here’s the news: Darla won on a 9-3 jury vote, and was found to have suffered $1.2 million dollars in emotional damages, with little or no wage loss. But then again, I am a plaintiff’s attorney . . . and this didn’t really happen.