Fresenius Medical Care Sued for Allegedly Defamatory Statements of Employee

As a business owner, you can’t control everything your employees will do or say. What if one of them defames the character of another employee while on the job? Can the business be held responsible? If the employee uttered the defamatory words while performing the employer’s business and acting within the scope of his or her employment, then yes, the employer can be held liable for defamation. How does one determine whether an employee’s statements were made with the “scope of employment”? In Virginia, an act will be considered within the scope of employment if it was (1) expressly or impliedly directed by the employer, or is naturally incident to the business, and (2) performed with the intent to further the employer’s interest, or from some impulse or emotion that was the natural consequence of an attempt to do the employer’s business, and did not arise wholly from some external, independent, and personal motive on the part of the employee to do the act upon his own account. (See Kensington Assocs. v. West, 234 Va. 430, 432 (1987)). If a plaintiff alleges the existence of an employment relationship, it becomes the employer’s burden to prove that the statement was not made within the scope of employment. Absent such proof, the employer is on the hook.

Last week, a defamation case against Bio-Medical Applications of Virginia, Inc. (doing business as Fresenius Medical Care Dominion) was allowed to go forward. The Amended Complaint filed in the case alleges that a Fresenius employee emailed to coworkers various false statements suggesting that the plaintiff (a registered nurse) had a complete disregard for patient welfare. For example, the alleged emails attributed to the plaintiff statements such as “[the patient] just needs a little bleach in his lines” and, in reference to another patient, “all she needs is a good shot of air. That’ll take care of her.” Another email accused the plaintiff of saying, “Well isn’t it about time?” after another patient had died. Fresenius Medical Care filed a motion to dismiss the case, arguing that the complaint failed to plead sufficient facts to hold the employer liable for the statements of its employees, and that the elements of defamation had not been satisfied. The court disagreed on both counts and denied the motion.

The court began its analysis by pointing out that Virginia recognizes a single cause of action for defamation; a plaintiff cannot allege separate counts for defamation per se and defamation per quod, which are merely types of defamation. All defamation can be categorized as either defamation per se or per quod; they are not separate causes of action.

The first element of defamation is known as “publication” and requires a communication to a third party. Some states provide for “intra-corporate immunity” against defamation claims with the “third party” is another employee, syringe.jpgapplying the rationale that such statements are the equivalent of a corporation speaking to itself (since a corporation can only act through its employees). In Virginia, however, the publication element can be met by an intra-corporate email, and the court in this case found that the Amended Complaint properly alleged publication.

For a statement to be “actionable,” it must be an expression of fact (as opposed to opinion), it must be false, and it must be defamatory in nature. The court found in this case that the alleged statements qualified. The plaintiff claimed she never made the statements attributed to her, and the statements would indicate to a reasonable reader that the plaintiff had a complete disregard for patient care and that she was unfit to perform the duties of a registered nurse. Therefore, the court reasoned, the statements were not only actionable but were actionable as defamation per se, negating the need to prove damages at trial. (The court noted that defamation per se is “actionable without any damages,” which I don’t believe is technically correct. The significance of defamation per se is that it relieves the burden of having to prove damages and allows the fact-finder to presume their existence; it doesn’t mean that damages don’t exist.) The court cited the recent Virginia Supreme Court decision in Tharpe v. Saunders, in which the court held that fabricated quotations can be actionable if harmful to reputation.

The court also declined Fresenius’ request to dismiss the case on privilege grounds. Recognizing that a qualified privilege applies to statements made in good faith to and by persons who have corresponding duties or interests in the subject of the communication, and finding that such a privilege would apply to at least some of the statements at issue, the court noted that the plaintiff could potentially defeat the privilege by a showing of malice. At the motion to dismiss stage, a court may only dismiss a case on the basis of an affirmative defense if all facts necessary to the affirmative defense clearly appear on the face of the complaint. Otherwise, the presentation of evidence is necessary. Because the plaintiff had alleged facts showing a pattern of animus towards her, the court found sufficient allegations of malice to make it untenable to dispose of the case on a motion to dismiss. These allegations were also deemed sufficient to satisfy the “intent” prong of the defamation test, so the court denied the motion and permitted the case to go forward.

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