Reprinted from the October 1, 2005 issue of MANAGER’S LEGAL BULLETIN, a widely read employment law newsletter that communicates legal guidelines to managers through real-life dialogue and concrete examples. Click here to view a sample issue, get more information or sign up for a risk-free subscription.

Defamation Dangers: Mind Your Memos And Other Internal Docs

What’s said in the office stays in the office, right? Not necessarily. Communications between you and other managers or HR may be meant for internal eyes and ears only. But some courts might consider them “published” for purposes of an employee’s defamation claim.

NEWS THAT’S FIT TO PRINT

“Albert lashed out at me during his performance review,” supervisor Seth Blaum told his manager, Vera Jung.

“What did he say?” Jung asked.

“He said he never received a negative review before, and ‘this is bull****’,” Blaum told her. “Not only did he get angry and curse at me, but he also questioned my supervisory skills and accused me of trying to sabotage his chances of landing a promotion.”

Surprised, Jung then asked, “Was he ever like that towards you before?”

“Not really, but he’s made derogatory comments to several co-workers,” Blaum responded. “He should be fired.”

“His conduct is unacceptable,” Jung added. “Write down what Albert said to you during the review. I will draft a memo to HR recommending his termination.”

Jung sent a memo about employee Albert Crandle to HR. It stated, in part, that Crandle’s behavior “reached a breaking point” in the review. HR agreed with her recommendation.

“Seth brought it to my attention that you were belligerent towards him during your review,” Jung said in a meeting with Crandle. “He also told me you used profanity and challenged his authority.”

“What? I never swore at him or acted like that!” Crandle claimed.

Jung handed him the memo recommending his termination. “That’s completely false. I never cursed at him or said those things,” the employee continued. “You didn’t even ask for my side of the story! I can’t believe this!”

Crandle sued the company for defamation.

MEMO THAT’S FIT FOR COURT

Defamation claims involve false statements published to a third party that harm the individual about whom they are made. The company’s main defense was that the comments were not “published” to a third party, since they were made only to HR as part of an internal disciplinary proceeding. In essence, it was simply a corporation talking to itself.

A state appeals court disagreed. In this state (Illinois), communication within a corporate environment may constitute publication for defamation purposes. Court: Publication takes place when a communication is made to “any third party.” Here, Jung’s memo to HR satisfied the third-party publication requirement. Upshot: A jury’s $300,000 award to Crandle stands.

TRUTH PREVAILS

Truth is the best defense against a defamation claim. Jung assumed that Blaum’s account of what happened was the truth. That’s not an extraordinary assumption for her to make. After all, if managers can’t depend on their supervisors, then why bother delegating supervisory duties to others?

This case may make you think that you must dissect all of your supervisors’ statements and decisions. You don’t. But at the very least, you should check major decisions, such as terminations, to ensure that they make sense.

Check: Crandle’s side of the performance review story. One of the biggest problems in this case, according to the employee’s lawyer, was that Jung failed to verify the accuracy of Blaum’s statements or give Crandle an opportunity to tell his tale.

Check: With the co-workers who, according to Blaum, were at the receiving end of Crandle’s derogatory comments. Although you can fire an at-will employee for any reason or no reason, it’s always best to have a solid reason for doing so. A false reason can be used as evidence of a discriminatory or retaliatory motive, and, as this case shows, as the basis of a defamation claim.

Check: Crandle’s personnel file. A termination decision is safest when there is a paper trail of previous infractions. If there isn’t one, Jung should ask Blaum why not. Because if the alleged derogatory comments weren’t important enough to document and reprimand the employee for before, then why are they important enough to pave the way for his termination now?

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