Accusations of Giving Preferential Treatment to Favored Vendors

When does ordinary workplace criticism become actionable defamation? While there’s no hard and fast rule, the answer usually lies in the extent to which the criticism involves provably false factual assertions. Expressions of pure opinion are not actionable, so a performance review that merely contains negative assessments of an employee’s performance won’t support a libel suit absent the inclusion of express or implied falsehoods. An accusation that an employee is slow to pay vendors? Not defamatory, because “slow” is relative and means different things to different people. An accusation that the employee is difficult to deal with? Also not defamatory, because calling someone “difficult” doesn’t convey any actual facts about the employee susceptible of being proven false. (How do you define “difficult”?) What about an accusation that the employee played favorites with vendors and paid preferred vendors before paying disfavored vendors? According to a federal judge sitting in Harrisonburg, Virginia, that statement crosses the line into defamatory territory as it can be proven false at trial.

The case of Christine A. Thompson v. Rockingham County presents the following facts. Christine Thompson worked in the Children’s Services Act (CSA) office for Harrisonburg and Rockingham County from 2005 to February 2020. Initially serving as the CSA coordinator and later promoted to CSA manager, her responsibilities included overseeing daily operations, facilitating invoice payments, and supervising employees. Thompson did not have the authority to approve payments to vendors, but she oversaw the generation of purchase orders for approved services and the submission of invoices by vendors. Once submitted, invoices were reviewed and signed by the Department of Social Services before being returned to the CSA office for payment processing. Payments were expected to be issued within 45 days of invoice submission, and adherence to procedural requirements was crucial for vendors to receive payment.

Thompson occasionally ran into issues with Family Educational Services, LLC (“FES”), a small business that provided in-home and community-based casework for families in need. On at least one occasion, FES billed for services that were not covered by the CSA. When Thompson discovered the CSA had paid for unauthorized services, she asked FES to repay the money. It took nine months for FES to do so. Later, at a meeting between FES’s owner, Debra Clatterbuck, and Rockingham County’s finance director, Clatterbuck complained that CSA check_writing-300x300had not paid FES for $40,000 worth of services. According to Thompson, Clatterbuck made the following statements about her:

FES was having issues regarding not getting paid in a timely manner for services performed for the CSA office; FES was owed more than $40,000 for November and December 2019 and [Clatterbuck] needed money to pay bills and that Clatterbuck had emailed CSA and received no response; [Clatterbuck] could not handle the stress of facing [Thompson] and there was a history with the CSA office that [Clatterbuck] did not want to deal with at the moment; in [Clatterbuck’s] experience, if [Thompson] likes a vendor, they get paid timely but if she doesn’t, they have to wait for their money; the time difference in which FAPT approves a service and CSA provides the invoice is detrimental to the kid’s well-being; “what [Thompson] says to [Clatterbuck] will not be the whole truth”; she has no confidence that what [Thompson] says to her is the whole truth; [Clatterbuck] is retiring due to the stress of dealing with the CSA office; and [Thompson] makes disrespectful and unprofessional comments about FES, including asking “why would you use them.”

Thompson was eventually terminated and sued FES and Clatterbuck for defamation (among other parties and claims). The defendants moved for summary judgment but were unsuccessful. The court found that many of the alleged statements were actionable as a reasonable jury could conclude that Clatterbuck was not being truthful in her discussion with Thompson’s boss. The court held as follows:


  • Clatterbuck’s statement that “FES was having issues regarding not getting paid in a timely manner for services performed for the CSA Office”

Even though “timely manner” is a relative statement, the court found that whether FES was “having issues” getting paid was capable of being proven true or false. This statement was deemed “of and concerning” Thompson (even though she wasn’t mentioned by name) because she was the manager of the CSA office and would have been responsible for any invoice-related issues.

  • Clatterbuck’s statements that “the CSA Office owes her more than $40,000 for November and December and [Clatterbuck] needs the money to pay bills,” and that “[Clatterbuck] has emailed CSA asking about the status of her invoices and did not receive a response”

These statements imply that Thompson was improperly withholding payments owed to FES, which could be proven false. The statements impugn her ability to perform her job and were therefore actionable per se.

  • Clatterbuck’s statement that, “in her experience, if [Thompson] likes the vendor they get paid timely, if she doesn’t like the vendor, they have to wait for their money”

The court held that a jury could find this to be a false statement, if evidence at trial showed that Thompson was not biased toward or against certain vendors and did not actually delay payment to vendors she didn’t care for.

Not Actionable:

  • When Davidson offered to have Thompson speak with them about these issues, Clatterbuck said “she could not handle the stress of facing [Thompson],” and further stated that “there is a history with the CSA Office that [Clatterbuck] did not want to deal with at the moment”
  • Clatterbuck’s statements that “oftentimes she hears from FAPT members that anytime FES is brought up in a FAPT meeting, [Thompson] has disrespectful and unprofessional comments to make about their services,” that “[Thompson] will say ‘Why would you use them?’ referring to FES,” and that Clatterbuck stated “many years ago she spoke to Ann Lewis (former assistant city manager for Harrisonburg) about the issues and nothing was resolved”
  • Clatterbuck’s statement that “the time difference in which FAPT approves a service and CSA provides the invoice is detrimental to the kid’s well-being”
  • Clatterbuck’s statements that “she does not have confidence that what [Thompson] says to her is the whole truth,” and that “[Clatterbuck] is retiring because of the stress of dealing with the CSA Office.

These are all statements of opinion, as they are relative in nature and depend largely on Clattterbuck’s perspective. They can’t be proven false. Therefore, they are not actionable.

FES argued that even if some of the alleged statements would otherwise be actionable, summary judgment should be granted in its favor due to qualified privilege, which attaches to communications between persons on a subject in which the persons have an interest or duty. The court rejected this argument, however, on the ground that “Clatterbuck was not an intraorganizational employee and her defamatory comments were not related to an employment matter.” The court noted that the overwhelming majority of qualified-privilege cases deal with intra-organizational immunity and it was not convinced the Virginia Supreme Court would extend qualified privilege to extra-organizational communications.

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