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Qualified Privilege Protects Employer from Defamation Claim

Published by on August 20, 2012

The U.S. Court of Appeals for the Fourth Circuit held in a recent decision that an employer had not lost its qualified privilege defense to a defamation claim that arose in the context of  an employee’s termination.  The decision reinforces the need for employers to conduct good faith, reasonable investigations into allegations of wrongdoing by employees […]

The U.S. Court of Appeals for the Fourth Circuit held in a recent decision that an employer had not lost its qualified privilege defense to a defamation claim that arose in the context of  an employee’s termination.  The decision reinforces the need for employers to conduct good faith, reasonable investigations into allegations of wrongdoing by employees before taking action.   More after the break.

The plaintiff-former employee was terminated by two managers for misrepresenting the severity of a workplace dispute between the plaintiff and a co-worker.  The allegedly defamatory statements were made by the managers during two meetings with the plaintiff that led to her termination, and a notation in the plaintiff’s personnel file that she was terminated for misconduct.

Virginia recognizes a qualified privilege in defamation actions for “communications between persons on a subject in which the persons have an interest or duty.”   The privilege is lost if the defamatory words are spoken with common-law malice.  To show malice, the plaintiff argued that the employer conducted a “grossly deficient investigation,” that it used “exaggerated language” to support its reasons for Plaintiff’s termination, and that it lacked reasonable cause to believe the reasons for the plaintiff’s termination.   The Court disagreed.

There are cases where incomplete or nonexistent investigations were sufficient evidence of common-law malice.  In one such case, noted by the Court, “the employer published false information with nothing more to go on than a misunderstood casual remark with no effort to verify the facts, though to have done so would have been a simple matter.”  In another case, a manager simply repeated accusations that the terminated employee stole merchandise without conducting an investigation.  The Court found that the investigation leading to this plaintiff’s termination “did not suffer from the same failings.”

This case (in addition to the one reported by the Laconic Law Blog on July 11, 2012) is yet another example the importance of proper workplace investigations.

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