Talking About An Employee’s Termination Leads To Defamation Claim

Since you can’t take back the words after they’ve left a manager’s mouth — or take back the e-mail after the manager has hit the send button — you need to train managers to think about what’s appropriate and what’s not before they speak (or send). Post-termination communication is one area in which managers can get into trouble in terms of defamation or libel claims, but you can cut the risk if you set ground rules.

Faux pas often occur when emotions run high. While a termination is obviously an emotional time for the employee being let go, keep in mind that a manager may be just as emotional, perhaps angry about the employee’s behavior that warranted the termination. Some of the employee’s co-workers probably won’t be shy in asking why the employee was let go. Management must be discreet in responding. While the truth is generally the best defense against a defamation claim, it is not an absolute defense if malice is shown.

One company was sued for libel by an employee who was fired for allegedly falsifying his expense reports. The employee based his case on an e-mail sent by an executive vice president to over 1,500 employees. The e-mail read:

“It is with sincere regret that I must inform you of the termination of employment with . A thorough investigation determined that was not in compliance with our policies. As always, our policies are consistently applied to everyone and compliance is mandatory on everyone’s part. It is incumbent on all managers to understand policies and to consistently communicate, educate, and monitor compliance every single day. Compliance with company policies is not subject to personal discretion and is not optional. In addition to ensuring compliance, the approver’s responsibility to monitor and question is a critical factor in effective management of this and all policies.

“If you have any questions about policies or Code of Ethics, call the Ethics Hotline…or ask your Human Resources manager.”

The 1st Circuit Court of Appeals originally dismissed the employee’s libel claim because the e-mail was truthful and the employer had not acted with actual malice. On panel rehearing, the court reversed and held that the employer may have acted with actual malice. It sent the case to trial for a jury to decide whether the company showed ill will by:

• singling out the employee in an effort to humiliate him by referring to him by name in the e-mail (fired employees had not been named in mass communications before); and
  
  
• publishing the e-mail excessively by sending the e-mail to approximately 1,500 individuals (some of whom did not travel and, thus, had no reason to be advised of the policy). (Noonan v. Staples, Inc., 1st Cir., No. 07-2159, 2009)

The jury ultimately decided that the e-mail had not been sent with actual malice.  (Noonan v. Staples, Inc., D.C. MA, No. 06-10716, 2009)  While the decision was a victory for Staples, employers located in states in the 1st Circuit (Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island) are not off the hook.  The 1st Circuit ruling still stands; under a different set of circumstances, employers who communicate truthful information can be found guilty of libel or defamation.

The Less Said, The Better

Employers should follow these best practices when communicating about an employee’s departure in order to avoid charges of defamation or libel.

Communicate only the bare bones of the situation. It is not necessary to indicate whether the employee quit or was fired, or reveal why the employee is leaving. Just give the employee’s last day of work and who will take over critical duties, if applicable.

Example: “Joe Doe’s last day with the company will be August 1. We wish Joe well in his future endeavors. Joe’s duties will be handled by Jane Smith until a replacement has been found.”

Refuse to answer employees’ questions about an employee’s departure. Employees who ask about rumors they’ve heard regarding the reason an employee has left should not receive a confirmation or a denial.

Example: “Out of respect for Joe’s privacy, I will not discuss the details of his departure with you. I would respect your privacy just the same.”

Note: This is one situation in which the company grapevine could work to the benefit of the company. Any time an employee is let go, employees will talk. Rumors that the employee was fired for fudging expense reports, even if they are unconfirmed, could be enough to motivate staff members to be more careful and follow the appropriate process.

Send a separate and non-specific e-mail regarding a policy violation. It might sound like a good idea to use an employee’s termination to show remaining staff members that the company is serious about enforcing policies. Since that could lead to a courtroom battle such as this, instead, refresh employees’ memories with a separate communication.

Example: “To clear up any confusion surrounding the company’s expense reimbursement policy, please keep in mind that you may not submit expense reports prior to your trip based on estimates, and then amend the report after the trip. Expense reports must have corresponding receipts attached.

“As always, our policies are consistently applied to everyone and compliance is mandatory on everyone’s part. It is incumbent…”