No Intra-Corporate Immunity Against Defamation Claims

Workplace defamation actions face a number of obstacles. The one that probably comes up the most is the issue of qualified privilege. Employees often claim that a manager or supervisor defamed them in the course of a termination or negative performance evaluation. These statements are usually protected from defamation claims, as a limited privilege applies to communications made on any subject matter in which the person communicating has an interest, or with reference to which he has a duty, if made to another person having a corresponding interest or duty. In other words, in situations where it is necessary or expected that one employee will make statements concerning the performance of another (such as a performance evaluation), a qualified privilege will apply.

Another defense that is sometimes raised in the employment context is that of “intra-corporate immunity.” This is a defense borrowed from the law of conspiracy. Because a conspiracy, by definition, requires at least two legally distinct persons, and because two employees acting within the scope of their employment duties are both acting as agents of their employer, a conspiracy cannot be formed between those two employees due to the unity of interest and absence of a second entity. “A corporation cannot conspire with itself,” is the oft-used way of describing the reasoning behind the doctrine.

In defamation law, there is a “publication” requirement. Publication is generally defined as communication to a third party. Some defendants will argue, then, that one employee making a defamatory statement to another is akin to the situation involving two conspiring employees in that the requirement of a third party is lacking. “A corporation cannot make defamatory statements to itself,” the argument essentially goes.

As I pointed out two years ago in my blog post on workplace defamation, this argument has not really been successful since the Virginia Supreme Court decided Larimore v. Blaylock in 2000, in which it rejected the concept fairly explicitly. Nevertheless, the argument was raised again in Fairfax County Circuit Court recently. Unsurprisingly, Judge Maxfield rejected it.

In Jeannie Kuley v. Saly J. Fayez, Ms. Kuley–an employee of the Fairfax County Police Department–sued her supervisor at the time (Ms. Fayez) as well as the Commander of the Criminal Investigations Bureau, for statements they made in the course of internal disciplinary proceedings relating to an allegation that Ms. Kuley noimmunity.jpghad worked unapproved overtime. Kuley effectively conceded that publication of the statements was confined to those with a duty to handle disciplinary matters within the department.

The defendants argued that the statements at issue were not “published” within the meaning of defamation law because the statements were only made in an employment setting and communicated to people with a duty to handle such information. Judge Maxfield held that the correct way to analyze such statements is not to find them immune for lack of publication, but merely subject to a qualified privilege.

Qualified privilege, the court held, can be defeated with a showing of malice. (Note: while not discussed in Judge Maxfield’s opinion, there are other circumstances under which the privilege may be lost, such as upon a showing that the statements were made with knowledge that they were false or with reckless disregard for their truth, or a showing that the statements included strong or violent language disproportionate to the occasion). Judge Maxfield found that Ms. Kuley had adequately alleged common-law malice sufficient to overcome the privilege, so he overruled the demurrer with respect to the statements found to be defamatory.

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