Articles Posted in Workplace Defamation

As a general rule, both the United States and the Commonwealth of Virginia enjoy sovereign immunity, which shields the government entities and their agencies from defamation lawsuits as well as most other types of litigation. The law becomes trickier when applied to the employees of those governments. Federal employees are immune from defamation claims based on things they said while acting within the scope of their employment. Those who work for the Commonwealth of Virginia, on the other hand, or one of its counties, cities, or towns, don’t have it so easy. Virginia employees do enjoy some degree of sovereign immunity for their actions, but–with limited exceptions–the protection they are afforded is less than the absolute protection federal employees receive. Like federal employees, state and local employees must be acting within the scope of their employment to be potentially entitled to claim immunity, but state employees need to meet additional criteria before they will be granted immunity.

The Virginia Supreme Court has described sovereign immunity as “a rule of social policy, which protects the state from burdensome interference with the performance of its governmental functions and preserves its control over state funds, property, and instrumentalities.” This rule of social policy is essentially based on the following goals: (1) to protect the “public purse” (i.e., to preserve tax dollars), (2) to address the concern that officials might be unwilling to carry out their public duties if they lived in constant fear of being sued, (3) to encourage citizens to take public jobs, and (4) to permit the orderly administration of government by discouraging improper influence through vexatious litigation. (See Messina v. Burden, 228 Va. 301, 308 (1984)). Consideration of these policies is what guided the Virginia courts to develop a rule affording immunity to some state and local employees but not others.
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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.
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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.
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Extortion is a crime. Statements that falsely accuse another of committing a crime often constitute defamation per se in Virginia, particularly where the crime is one involving “moral turpitude.” Does it follow, then, that false accusations of extortion will automatically qualify as defamation per se? The answer, which will undoubtedly surprise many of you, is no. The reason lies in the importance of context in defamation actions.

A good illustration comes from the Tenth Circuit, which issued its decision in Hogan v. Winder a few days ago. Chris Hogan worked as a consultant for the Utah Telecommunications Open Infrastructure Agency (“UTOPIA”), a state agency charged with upgrading high-speed Internet access. In the spring of 2011, Hogan began to suspect that UTOPIA’s executive director unfairly favored a bid for a contract from the company where the director’s brother worked, and he expressed his suspicions to UTOPIA’s plant manager. He was terminated shortly thereafter. Believing that his termination was retaliatory, he hired a lawyer and sent UTOPIA a draft complaint along with certain settlement demands, pointing out that the public scrutiny that would result from filing the lawsuit would essentially destroy the company. In a response, UTOPIA’s attorney characterized Hogan’s demands as “extortion” and “blackmail.”
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Defamation claims arise frequently in employment settings. Employees often disagree with their performance reviews and, if they feel particularly aggrieved, resort to the courts to extract a modicum of revenge. Unfortunately for them, statements relating to employee discipline and termination made by managers and supervisors usually enjoy a qualified privilege against defamation claims. The privilege generally insulates such statements from liability absent clear and convincing evidence of malice or some other indicator that the privilege has been abused. When an employer makes a false and defamatory statement about an employee, but that statement is protected by a qualified privilege that has not been lost or abused, the statement is not actionable.

Of course, before the question of privilege even comes into play, there is the matter of whether the statement at issue is defamatory in the first place. In Regina M. Zarrelli v. City of Norfolk, Ms. Zarrelli sued the City of Norfolk, Virginia (her former employer) along with the City’s Commonwealth’s Attorney, Gregory D. Underwood, based in part on being required to apologize to a vendor. It didn’t work, and the case was dismissed both because the statements were not defamatory, and because even if they were, they were protected by qualified privilege.
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In most (but not all) cases, absolute immunity applies to statements made by government contractors to government investigators in the course of an official investigation. The United States District Court for the Eastern District of Virginia recently addressed this issue in Kolakowski v. Lynch and found that statements made to the FBI in the course of an employment background check could not form the basis of a defamation action.

Daniel Kolakowski filed an employment discrimination charge with the EEOC against his former employer, MITRE Corporation, alleging he had been harassed because of his Polish ancestry. Kolakowski and MITRE eventually signed a mediation agreement resolving the dispute. Under the agreement, MITRE agreed to not discriminate or retaliate against Kolakowski for filing the charge.

When Kolakowski later applied for a job with the Federal Bureau of Investigation, he signed a form authorizing the FBI to investigate his background and allowing former employers to release information about him. The FBI interviewed three of Kolakowski’s former supervisors at MITRE. The three employees allegedly told the FBI that FBI seal.jpgKolakowski took excessive days off work, exaggerated how much worked, lied about his wife having cancer, and was generally untruthful. When the FBI did not hire Kolakowski, he sued MITRE and the three supervisors for breach of contract and defamation. The defendants removed the case to federal court and moved to dismiss for failure to state a claim.

Sometimes the context in which a statement is made provides the speaker with a qualified privilege against defamation claims. A qualified privilege generally attaches to communications between persons on a subject in which the persons share an interest or duty. If such a privilege applies, the speaker will not be liable for slander unless the plaintiff can show by “clear and convincing” proof that the privilege has been lost or abused. In a published opinion released yesterday by the Supreme Court of Virginia, the court reversed its prior decisions mandating that the speaker have acted in good faith as a prerequisite to the privilege attaching, and clarified the situations in which the privilege can be lost or abused.

The case involved a dispute between Dr. Robert Smith, a trauma surgeon, and Dr. Bradley Cashion, an anesthesiologist. In November of 2009, the two were part of an emergency operating team providing care to a critically injured patient. The patient did not survive the procedure, and Dr. Smith blamed Dr. Cashion. In the presence of other members of the operating team, Dr. Smith claimed the patient “could have made it with better resuscitation” and directly accused Dr. Cashion of purposefully failing to resuscitate him. “You just euthanized my patient,” he allegedly told Dr. Cashion.

The trial court sustained Dr. Smith’s demurrer to the statements that the patient “could have made it with better resuscitation” and “[y]ou determined from the beginning that he wasn’t going to make it and purposefully didn’t resuscitate him,” finding them both to be non-actionable expressions of opinion. The Virginia Supreme Court disagreed, finding that both statements attributed the patient’s death to Dr. Cashion’s action or inaction, which it found to be an allegation of fact capable of being proven true or false. The latter statement was held to be the equivalent of the “you just euthanized my patient” statement, which the trial court correctly found to be a surgery.jpgstatement of fact. (Note: Justice McClanahan, however, found the euthanasia references to be mere rhetorical hyperbole, and wrote a detailed dissenting opinion explaining why she would find the statements not actionable).

Having trouble finding a new job? That doesn’t necessarily mean that your former employer is spreading defamatory disinformation about you. Any defamation claim you might file against your former employer in federal court is going to be dismissed unless you can both identify exactly what was said about you, and produce evidence of those statements sufficient to support a jury verdict in your favor. On October 8, 2013, the Eastern District of Virginia granted the defendant’s motion for summary judgment in Gierbolini v. SAIC, illustrating these principles.

Catherine Gierbolini was working for Science Applications International Corporation (SAIC) as a Personnel Coordinator in Kuwait under the supervision of Raymond Mattes and alongside subordinate Heather Hudson when her poor relationship with Hudson eventually led to her termination. Gierbolini accused Hudson of disobeying orders and reporting false claims of misconduct to management. Gierbolini and Hudson frequently bickered, and each submitted complaints about the other to Mattes who issued them both a written reprimand for unprofessional conduct. Mattes eventually gave Gierbolini a written memo terminating her employment.

Gierbolini was unable to secure employment after her termination and suspected that SAIC issued a “letter of release” – a document that the military uses to bar personnel from returning to an active theater of war. She also surmised that Mattes and Hudson gave poor references to potential employers. Gierbolini sued SAIC for defamation and other claims. SAIC moved for summary judgment on the defamation claim, arguing that it was time-barred and that Gierbolini had failed to produce sufficient evidence of the statements claimed to be defamatory.

Where an otherwise defamatory statement is subject to a qualified privilege, a plaintiff can overcome that privilege by showing that the defendant acted with actual malice. However, “actual malice” in the context of a defamation action–also known as “New York Times malice,” is a different concept than the common-law malice ordinarily required to support an award of punitive damages. A speaker acts with actual malice when he knows that his statement is false or acts with reckless disregard as to its truth. Mere dislike of the plaintiff is not sufficient to indicate a speaker acted with actual malice.

The distinction was explained last month in the Texas case of Tyson v. Austin Eating Disorders Partners, LLC. Edward Tyson worked for Austin Eating Disorders Partners (AED) as medical director of AED’s Austin eating disorder treatment center. After Tyson was removed from his position, he asked his accountant to inquire about AED’s improved financials. Mark McCallum, CFO of AED, responded to the inquiry with an email to Tyson, AED’s Board of Directors, AED’s attorney, and AED’s accountant stating that AED’s financials had improved because Tyson had been a bad medical director who had no idea how to run the treatment center and took kickbacks for referring patients to other facilities. In a Second Amended Complaint asserting various defamation theories, Tyson conceded that McCallum’s email was subject to a qualified privilege, but argued that he overcame the privilege by alleging that McCallum acted with actual malice. AED and McCallum moved to dismiss the claim.

The court noted that actual malice is shown where a statement is made with knowledge that it is false or with reckless disregard as to its truth. Actual malice is not the same as ill will. The key to an actual malice showing, the court held, is evidence that the speaker knew or had reason to know that his statements were false.

Applying Virginia law, the Colorado Supreme Court upheld a $1.4 million jury verdict against Air Wisconsin back in March of 2012, finding it was responsible for slander of a former pilot and not entitled to immunity. On June 17, 2013, the United States Supreme Court granted certiorari to consider the question of whether a court can deny the immunity provided by the Aviation and Transportation Security Act (ATSA) without a prior determination that the air carrier’s statements to the Transportation Security Administration (TSA) were materially false.

After the September 11th terrorist attacks, Congress passed the ATSA in order to encourage the reporting of security concerns. The ATSA requires airlines and their employees to report potential security threats to the TSA. Reporting parties are given broad immunity and may only be liable for reports made with actual knowledge that the report was false, inaccurate, or misleading, or with reckless disregard as to the truth or falsity of the report. Because failure to report can result in civil penalties, shorthand for the policy has become known as “when in doubt, report.”

William Hoeper was a pilot for Air Wisconsin Airlines. Hoeper apparently had failed three proficiency exams and abandoned his fourth attempt. Approximately ninety minutes into the test, Air Wisconsin contends that Hoeper ran the simulator out of fuel, flamed out the engines, and nearly crashed. According to Air Wisconsin, Hoeper knew he would be terminated and was acting irrationally, yelling and cursing at his instructors. Hoeper’s version of the SCT.jpgstory is that Air Wisconsin was conducting the simulator test unfairly, and a personal dispute was escalated into a matter of national security.

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