defamation in the workplaces

Defamation in the Workplace

Workplace defamation may occur more often than you think. Is it possible that your promotion or a bonus that you expected to receive has been jeopardized by a false statement? You may or may not have a legal claim.

At Gardner Employment Law, we have handled defamation cases. We know how important your reputation is. If you need help, give us a call.

What Is the Meaning of Defamation in the Workplace?

When anyone intentionally makes a false statement about an employee that tends to injure or blacken the employee’s reputation, that constitutes slander. In essence, someone lies about you. We explained the legal principles of defamation in Texas Defamation Lawyer. This can do not only immediate harm to the employee’s character. It also can prevent future employers from hiring an employee with a bad reputation.

There are two forms of defamation:

  1. Slander: a false statement made verbally. The act of harming a person’s reputation by telling one or more people something that is untrue and damaging about that person is called slander and constitutes defamation.
  2. Libel: a false statement that is written, published, or broadcast. Defamatory statements made in any writing and “published” or distributed to others are called libel.

Defamation of character requires a false statement of fact. It cannot be an opinion, such as “He is stupid.” Opinions are subjective and are not true or false. It is simply a person’s opinion about another person.  A statement of fact generally refers to an event, whether it happened or it didn’t happen. “She [or he] took money from the cash register.”

To be actionable, a defamatory statement must be “published” to others. Publication is the communication of a defamatory statement to a third party. The lie can be told to anyone in any form, slander or libel.

A few exceptions protect someone who publishes a false statement that defames another. In legal terms this is called a “qualified privilege”:  Here are the exceptions:

  1. A false statement is made to a select group of those who “need to know.” This exception often applies during an investigation where the employer is attempting to get to the bottom of the problem, such as a reported theft of company funds. The statement or accusation must be carefully contained and cannot be further disseminated outside of the “need to know” group.
  2. A false statement is made during a court proceeding or quasi-judicial context. Similar to #1, this situation involves a judicial or government official investigating a claim that may turn out to be untrue. This exception applies, for example, to statements filed by an employer with the Texas Workforce Commission when an employer opposes a departing employee’s application for unemployment compensation.

The United States Supreme Court has given newspapers and similar publishers some leeway in making a good faith effort to accurately report newsworthy events, even though they may make a false statement about someone in the process.  The Supreme Court held in New York Times v. Sullivan that newspapers and publishers cannot be held responsible for false statements unless at the time the statement was made, it was “made with knowledge of its falsity or with reckless disregard of whether it was true or false.”

Texas Anomaly: Termination Because of Supervisor’s False Statement

Texas law protects an employer from liability if the only “damage” that the employee can prove is that she or he was terminated because of a false statement made by the employer. That sounds strange, doesn’t it?  Here’s the case.

In Exxon Mobil v. Hines, the court held that an employee who is terminated based on a defamatory statement (Hines was falsely accused of fraud) has no claim for damages against the company.  Stated differently, a supervisor can make false statements to get an employee fired, and the employee has no recourse against the company.

Hines had worked for the Exxon Chemical Company for 23 years. He was 52 years old. Hines was accused of defrauding a company program which matched employees’ contributions to certain colleges and universities up to a certain amount. The accusation was not true. However, the decision makers would not relent. The matter went all the way up to the company president. Based on the fraud accusation, Hines was fired. Not only was his reputation damaged, he lost his job and his income, his pension, and his medical benefits. During and after his termination, Exxon Mobil issued several written statements about Hines, all false.  Even a letter was sent to current employees and retirees about the situation.

The jury heard all of the evidence and returned a verdict that ExxonMobil was liable for defaming Hines and awarded him compensation for his losses. On appeal, the Court of Appeals reversed. Hines got nothing.

The ruling was contrary to decades of law of slander, which holds that a manager (legally a “vice principal”) of a corporation binds the corporation to her/his wrongful acts, including slander, when she/he engages in the wrongful acts in the course and scope of her/his job duties. Notably, in the Exxon Mobil v. Hines opinion, the Court of Appeals did not mention any of those previous court decisions on defamation, even some written by the Texas Supreme Court.

So if your supervisor makes a false statement to get you fired, you have no recourse against the company. Yes, it’s a strange opinion.

Is It Worth Suing For Defamation?

It depends. As explained above, a person making a false statement may have a qualified “privilege” to make the statement. Employers have the right to make statements during an investigation or in a legal proceeding without worrying about the consequences. Employers are protected if the only adverse action was a termination.

As discussed in the William & Mary Law Review, “Employers enjoy a qualified privilege when discussing most matters related to employment with individuals having a corresponding interest or duty.The privilege has the potential for affording sweeping protection to employers.”

In an interesting defamation case that became widely publicized after the last election, Mike Lindell, CEO of MyPillow, sued Dominion Voting Systems for $1.6 billion. He claimed suppression of speech and attacks against his company. “MyPillow seeks to hold Dominion accountable for the extreme and destructive consequences of its bullying and wrongful tactics which have directly harmed MyPillow and its employees,” as Forbes noted. Then Dominion sued MyPillow for accusing Dominion of rigging the 2020 elections in favor of President Biden. Dominion claimed that Lindell’s accusations damaged Dominion’s reputation, jeopardized its contracts with state and local governments, and prompted death threats and harassment against its employees. Next, Lindell again took action and sued Dominion for defamation regarding an election fraud conspiracy theory involving the company’s voting machines. Those claims are winding their way through the courts.  Let’s see what happens next!

Contact an Employment Attorney

Defamation in the workplace is a serious matter that should not be swept under the rug. We can provide you with expert advice. If you believe you have been defamed and can collect evidence to prove your claim, get us involved right away.

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