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Beware defamation lawsuit after firing: Keep the reason confidential

by on
in Employment Law,Human Resources

If you need to fire an employee for unethical actions, how you handle the termination may mean the difference between winning and losing a defamation lawsuit.

Most important: Share information about the termination only with those who need to know about it.

Recent case: When Ruth Kennedy had a month to go before she was scheduled to be terminated in a reduction in force, she ordered software for a co-worker.

Kennedy had authority to order for the company, but not for employees’ personal use.

Kennedy was questioned about the $1,800 purchase and insisted it was legitimate. Her co-worker, however, admitted it was for his personal use. The company accused Kennedy of misappropriating company funds and fired her immediately.

She sued, alleging defamation be­­cause she had to recount the charges when applying for other jobs and unemployment.

The court dismissed her claim. It pointed out that the company kept the details confidential and never publicized the reason Kennedy lost her job before she was scheduled to lose it. (Kennedy v. Calkins, No. B228707, Court of Appeal of California, 2nd Appellate District, 2012)

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