conduct Unbecoming: How To Avoid “defamatory - MHTL · CONDUCT UNBECOMING: HOW TO AVOID “DEFAMATORY CONDUCT” HR ADVISOR MARCH/APRIL 2005 21 cation.”3 This means that to es-tablish

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CONDUCT UNBECOMING: HOW TO AVOID

“DEFAMATORY CONDUCT”Arthur P. Murphy, Esq. and Quinn H. Vandenberg, Esq.

You just completed a comprehen-sive investigation of employeetheft of company funds, includinginterviews with several of the ac-cused thief’s coworkers, deter-mined that he committed thecrime, locked him out of his office,terminated his employment andhad him escorted off the premisesby security. You just saved thecompany from a thief, right? Prob-ably, but you also may have ex-posed the company to a large dam-age award in a defamation byconduct lawsuit filed by the termi-nated employee.

Investigating, disciplining, sus-pending, and terminating employ-ees are part of the daily activities ofHR Professionals. To accomplishthese tasks without severe reper-cussions to the company in the

form of litigation, HR Profession-als should prepare themselves forthe ever-increasing legislative andjudicial oversight of the work-place, which includes training thecompany’s managers and supervi-sors. One of the thorniest issuesfacing HR professionals in today’scomplex workplace is defamation:defamation in the actual process ofterminating an employee, defama-tion in the rendering of negativereferences, defamation when disci-plining employees, or defamationin the investigation of employees.1

For most HR professionals,learning how to avoid making def-amatory statements and trainingthe company’s managers and su-pervisors have been critical com-ponents of his or her job. Whiledefamation typically takes the formof oral or written statements, inthe last few years, an increasinglycommon cause of action broughtby terminated employees againsttheir former employers is defama-tion based upon the employer’sconduct. In particular, HR profes-sionals and those who typically areresponsible for investigating prob-lems in the workplace should also

be aware of the potential for thecompany’s conduct toward thesuspected employee to form thebasis of a claim of defamation byconduct.2 A recent trend amongststate courts has been to find thatmere conduct alone, even absentdefamatory oral or written state-ments, could support a claim ofdefamation.

I. WHAT IS DEFAMATION?

In general, defamation is a causeof action that attempts to com-pensate a plaintiff, i.e., disciplinedor terminated employee, from in-jurious statements to his or herreputation. Generally, a disci-plined or terminated employeemust show he following in orderto prove that his or her employerdefamed him or her: “(a) a falseand defamatory statement con-cerning another; (b) an unprivi-leged publication to a third party;(c) fault amounting at least tonegligence on the part of the pub-lisher; and (d) either actionabilityof the statement irrespective ofspecial harm or the existence ofspecial harm caused by the publi-

Arthur P. Murphy is the managing partnerof Murphy, Hesse, Toomey & Lehane,LLP, a law firm in Massachusetts special-izing in representing management in laborand employment issues.Quinn H. Vandenberg is an associate atMurphy, Hesse, Toomey & Lehane,LLP, who emphasizes in labor and em-ployment as well as general litigation, busi-ness law, and corporate governance.

© 2005 Thomson/West. This publication was created to provide you with accurate and authoritative information concerning the sub-ject matter covered, however it may not necessarily have been prepared by persons licensed to practice law in a particular jurisdiction.Thomson/West are not engaged in rendering legal or other professional advice, and this publication is not a substitute for the adviceof an attorney. If you require legal or other expert advice, you should seek the services of a competent attorney or other professional.For authorization to photocopy, please contact the Copyright Clearance Center at 222 Rosewood Drive, Danvers, MA 01923, USA(978) 750-8400; fax (978) 646-8600 or West's Copyright Services at 610 Opperman Drive, Eagan, MN 55123, fax (651)687-7551.Please outline the specific material involved, the number of copies you wish to distribute and the purpose or format of the use.

C O N D U C T U N B E C O M I N G : H O W T O A V O I D “ D E F A M A T O R Y C O N D U C T ”

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cation.”3 This means that to es-tablish a claim for defamation, aformer or disciplined employeemust demonstrate that the em-ployer communicated a statementabout the employee to a thirdperson (publication)4 that couldbe damaging to the employee’sreputation.

In order to prevail in his or herdefamation suit, the employeemust prove that the communica-tion is capable of a defamatorymeaning and that the communi-cation was understood in this def-amatory sense by the recipient.5

In order for a communication tohave a defamatory meaning, theemployee must show that thecommunication impugned theemployee’s reputation. To under-stand what types of conduct resultin actionable and defamatory con-duct, it is essential to understandthat “communication” has beenused to “denote the fact that oneperson has brought an idea to theperception of another.”6 Addi-tionally, communication can beunderstood as “written, spoken,or otherwise” as long as the recip-ient understands what it is tryingto convey.7 In order to establishthe defamatory meaning requiredto prove defamation, courts typi-cally require that the plaintiffshow that a third person (possiblya coworker) understood the sig-nificance of the conduct as defa-matory, i.e., injurious to the em-ployee’s reputation.8

If the employees can show theabove elements, then the employ-er can still prevail in the case if itcan demonstrate the truth of thestatement (which is a defense todefamation so long as the truestatement is not misleading), orshow that it obtained the employ-ee’s consent (which typically in-volves defamatory references),9 or

establish that it was privileged inmaking the statement, i.e., that itmade the statement for a legitimatebusiness reason to a person or per-sons with a legitimate business rea-son for receiving such statement.10

II. WHAT TYPES OF COMMUNICATIONS RESULT IN ACTIONABLE CONDUCT?

Any conduct that could imputeincompetence, stupidity, unwor-thiness of continued employ-ment, or dishonesty to the em-ployee might be considereddefamatory.11 Reviewing recentcases in several state courts indi-cates that defamatory conductmay include the way in which anemployee is terminated during anon-going investigation12 or theway in which an employee is es-corted around a building during aninvestigation.13 Courts also havefound that when an employee wasgiven a polygraph test and thendischarged, the employer’s con-duct gave other employees the be-lief that the discharged employeehad engaged in wrongful activi-ty.15 Other cases addressingwhether an employer’s conductcould constitute defamation in-clude the following: searching orpacking up an employee’s office,15

deactivation of a key card,16 inter-rogations or drug tests witnessedby other employees, and demo-tions or terminations.17 Althougheach case dealing with defamationby conduct is fact-specific, thepurpose of this article is to alertHR professionals to certain actionsthat could lead to possible defama-tion by conduct suits if coworkersobserve the employer’s actions andconclude from these actions thatthe disciplined or terminated em-ployee had done something dis-graceful or wrongful.

The following lessons derivedfrom the reported cases may helpHR professionals minimize thepossibility of an employee bringinga successful defamation by conductsuit.18 In addition to understandingthe lessons that follow, one of thefirst steps that HR professionalsshould take is to determine wheth-er their state courts recognize def-amation by conduct. While somestates including Massachusetts,Maryland, Pennsylvania, and Wis-consin have shown a willingness toadapt their states’ defamation lawto non-verbal conduct, many oth-er states, including New Jersey andMinnesota, have explicitly rejecteda cause of action based upon defa-matory conduct. Moreover, HRprofessionals should be aware thatsome states that have previouslyavoided deciding whether to rec-ognize a specific cause of action fordefamatory conduct are now ad-dressing the issue.19

III. LESSONS FOR HR PROFESSIONALSLesson One: HR Professionalsshould always plan and prepare be-fore taking any action concerninginvestigations, suspensions, disci-pline, and terminations. Althoughit seems obvious, rash and hurrieddecisions could result in conductthat might be regarded as defama-tory. For example, having securityremove an employee from theshop floor and escort him or herout of the building while an inves-tigation is pending or telling wit-nesses in an investigation that thecompany believes an employee hasbeen stealing from the companybefore it establishes that this theftoccurred might be understood bycoworkers as a statement that theemployee participated in a wrong-ful action. Such conduct by anemployer coupled with cowork-


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ers’ perceptions of the conduct ascommunicating wrongful actionby the employee could result in afinding that the employer engagedin defamation by conduct.

Lesson Two: Depending onwhether the HR professional isdealing with an investigation, dis-charge, or both, the HR profes-sional should analyze when and ifthe employee’s access to buildingsand computer systems should beterminated. When dealing withinvestigations or discharges, HRprofessionals should generally notdeactivate the employee’s access tothe buildings or the computer sys-tems before meeting with the em-ployee to discuss the situation un-less there is concern that confiden-tial business information will becompromised. The reason forwaiting to end the employee’s ac-cess to buildings and computerssystems until during or immediate-ly after meeting with the employeeis due to the possibility of an em-ployee being locked out of a build-ing or a computer system and hisor her coworkers observing theemployee’s inability to enter orgain access. If the coworkers ob-serve this action and view it as def-amatory, then the locking out ordeactivation could be actionable.One approach to this tricky timingissue is to instruct the security andintellectual technology (IT) de-partments to deactivate thesemeans of access at a specific timewhen the employee in questionwill be meeting with the HR pro-fessional. Then, if the employeerequests to download certain per-sonal files from the computer, havethe computer moved to a privatearea and instruct the IT employeeto download the files for the em-ployee in his or her presence.

Lesson Three: Try not to con-duct the disciplinary or termina-tion meetings or searches employ-ees’ offices in locations where co-workers could view the conduct,which includes keeping doorsopen when searching an employ-ee’s office. Instead, limit the num-ber of coworkers who can observethe company’s conduct and inter-pret that conduct as communicat-ing a defamatory statement. HRprofessionals can achieve this goalby finding a private room outsideof the earshot and sight of cowork-ers when discussing the disciplin-ary action or termination or in-specting the employee’s officewith the door shut.

Embedded in this issue of loca-tion is the element of publication.Publication occurs when the com-pany or a representative of thecompany communicates to a thirdperson, i.e., at least one coworker,a statement about the employeethat could be harmful to the em-ployee’s reputation, which in anincreasing number of jurisdictionsincludes communication throughconduct. To limit publication andexposure to defamation by con-duct, discussions concerning disci-pline or termination, interroga-tions, polygraph tests, and searchesshould be conducted in private ar-eas. Being discrete and respectfulwhen conducting discipline, ter-mination, demotions, interroga-tions, investigations, and searchescan diminish the possibility of suc-cessful defamation by conductcauses of action.

Lesson Four: HR profession-als should train the company’s su-pervisors and managers how andwhy to avoid grabbing, chasing, orrestraining employees; especiallyin front of his or her fellow co-

workers, unless such conduct isunavoidable. Moreover, HR pro-fessionals should instruct supervi-sors and managers that if a physicalconfrontation is likely, alert securi-ty, but with discretion; do not at-tempt to handle those situationsthemselves.20 Part of the trainingshould include how to avoid anyextreme conduct that conveys aclear and unambiguous messagethat the employee engaged incriminal wrongdoing. By avoidingspecific and obvious conduct thatdemonstrates that the employeemay have engaged in criminalwrongdoing and any chasing,grabbing, or restraining, the em-ployer avoids exhibiting conductthat tends to create a belief in co-workers that the employee wasdoing something illegal or wrong-ful, which in turn decreases thechances of a court finding the con-duct defamatory.

Lesson Five: HR Professionalsshould consider whether certaincommunications are protected byan employer’s legitimate businessinterest, the so-called “conditionalprivilege.” In general, the allegeddefamatory conduct may be pro-tected by an employer’s condition-al privilege to publish defamatorymaterial if the publication was rea-sonably necessary to the protectionof a legitimate business interest, solong as that privilege is notabused.21 That is, an employer maylose the conditional privilege basedon a legitimate business interest ifthe employer recklessly over-pub-lishes the information by exhibit-ing the defamatory conduct to anexcessive number of coworkers orif the context of the conduct issuch that it destroys the privilegeentirely, i.e., a showing of actualmalice toward the employee.



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IV. RESULT OF DEFAMATORY CONDUCT: DAMAGES

Defamatory conduct could openthe company up to damages fordefamatory communication forharm caused to the reputation ofthe person defamed.22 In general,damages for defamatory actions areimposed for the purpose of com-pensating the employee for theharm that the publication causedto his or her reputation.23 If thedefamatory conduct imputes a se-rious crime or discredits a personin his or her trade or profession,the plaintiff may receive damagesfor lost earnings and emotional dis-tress. Also, if the employer’s con-duct was particularly egregious,then, depending on the jurisdic-tion, the plaintiff may receive pu-nitive damages.24

The result of defamatory con-duct by HR professionals or otherrepresentatives of a company couldlead to substantial monetary reper-cussions for the company as well asa decreased reputation and stand-ing amongst other employees. HRprofessionals must realize that theirconduct reflects upon the well-be-ing of the company and should,therefore, attempt to act accord-ingly. The company’s generaltraining for managers and supervi-sors should include a componentaddressing defamation of all types:what it is, how to avoid it, and itsconsequences.

V. CONCLUSION

In some states, defamation is nolonger merely oral or written state-ments, but now includes conduct.A recent trend in state courts hasbeen to find that mere conductalone could support a claim of def-amation: an employer may be heldliable for defamatory “statements”either orally (slander) or throughwritten words (libel) or conduct.

In general, an HR professionalwho considers timing, preparationand planning, location, and discre-tion before acting will be betterequipped to help the companyavoid conduct that could be con-sidered defamatory. Moreover, ifthe company’s general training formanagers and supervisors addressesall kinds of defamation, verbal,written, and non-verbal, then thecompany will be better protectedfrom the risk of defamation byconduct suits.�

NOTES1. There are many forms of defamation,

which include both libel (written) and slan-der (verbal). This list is merely illustrativeand not exhaustive.

2. Another layer embedded in this thorny is-sue lies in the increasing legislative require-ments that mandate a company to detect,monitor, and remedy any theft, fraud, or fi-nancial irregularities. HR professionals fre-quently find themselves conducting investi-gations to identify and remedy such issues.While conducting an investigation it maybe necessary for the HR professional to ad-dress the necessity of isolating certain indi-viduals suspected in any possible theft,fraud, or financial irregularities from havingaccess to important files and certain individ-uals. See Arthur P. Murphy and Quinn H.Vandenberg, “How to Conduct a FraudInvestigation,” HR Advisor, September/October 2003.

3. Restatement (Second) of Torts, §577(1977).

4. For a more detailed discussion of publica-tion, refer to Section III, Lesson 3.

5. See, Restatement (Second) of Torts § 613comment c (1977).

6. See, Restatement (Second) of Torts § 559comment a (1977).

7. See, Restatement (Second) of Torts § 563comment a (1977).

8. See, Restatement (Second) of Torts § 613comment c and d (1977).

9. Consent typically involves defamatory ref-erences. Although defamatory references isoutside the scope of this article, it is impor-tant to note that obtaining an employee’swritten consent at the beginning of his orher employment with a company to releaseinformation to future employers is vital todefend against defamatory reference claims.

10. Courts have recognized a limited numberof such privileges including absolute andconditional (qualified) privileges. For the

purposes of this article, we will focus upona conditional privilege that deals with legit-imate business purposes. This privilege isgiven to employers who can show a legiti-mate business purpose for communicating adefamatory statement about an employee toa third party, which is discussed in SectionIII.

11. HR professionals should review their re-spective state’s case law to determinewhether or not their specific state allows adefamatory conduct cause of action.

12. Paul v. Lankenau Hosp., 543 A.2d 1148,1158 (Pa. Super. Ct. 1988) rev’d ongrounds not pertaining to the actual defam-atory conduct, 569 A.2d 346, 349 (Pa.1990)

13. See Phelan v. May Department Stores, 443Mass. 52 (2004) (holding that Massachusettshad a cause of action for defamatory con-duct, but that the employee failed topresent testimony from at least one co-worker who observed and interpreted the[security officer’s]actions as defamatory).

14. Tyler v. Macks Stores of S.C., Inc., 272S.E.2d 633, 634 (S.C. 1980). HR profes-sionals should note that some states prohibitemployers from administering polygraphtests in connection with employment.

15. Coleman v. Am. Broad. Co., Inc., No. 84-1594, 1985 WL 365 (D.D.C. June 18,1985).

16. Wallace v. Skadden, Arps, Slate, Meagher& Flom, 715 A.2d 873, 878 (D.C. 1998)

17. See generally, Dave Klut, “Beyond Words:The Potential Expansion of Defamation”,83 B.U.L. Rev. 619 (2003).

18. See, Section IV for a discussion concerningdamages.

19. For instance, in Massachusetts, the Su-preme Judicial Court, Massachusetts’ high-est state court, decided Phelan v. May De-partment Stores Company & Others inDecember of 2004. In this case, a formeremployee brought suit against his formeremployer for being escorted around theworkplace by a security guard during an in-vestigation into alleged accounting irregu-larities. 443 Mass. 52 (2004). While thecourt found that defamation by conductwas a valid cause of action in Massachusetts,the court held for the employer because theformer employee’s belief that his coworkersviewed him in a defamatory light was insuf-ficient to establish defamatory publicationwithout evidence that his coworkersviewed him in a defamatory light. Id.

20. Such conduct can give rise not only to adefamation by conduct claim, but also civiland criminal assault and battery claims,among others.

21. In general, “[t]he existence of a privilege,whether consensual or irrespective of theother’s consent, prevents an act or omissionwhich otherwise would be tortious from sobeing and, therefore, protects the actorfrom liability to which he would otherwise


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be subject.” Restatement (Second) of Torts§10 comment a (1965).

22. Restatement (Second) of Torts §621(1977).

23. Restatement (Second) of Torts §621 com-ment a (1977).

24. There has been uncertainty about the con-stitutionality of punitive damages in defa-mation actions, but in Dun & Bradstreet, Inc.

v. Greenmoss Builders, Inc., 472 U.S. 749(1985), the Supreme Court held that in cas-es where a private citizen is suing for defa-mation not involving matters of public con-cern, an award for punitive damages doesnot violate the First Amendment. It is im-portant to note that the allowance of puni-tive damages is state specific. Compare,Stone v. Essex County Newspapers, Inc., 330

N.E.2d 161 (Mass. 1975) (disallowing any

punitive damages in defamation suits

whether the suits are based on negligence

or reckless or willful conduct) with Davis v.

Schuchat, 510 F.2d 731 (D.C. Cir. 1975)

(upholding punitive damages upon a find-

ing of malice as long as the award “does not

exceed limits of propriety”).


Documents

conduct Unbecoming: How To Avoid “defamatory - MHTL · CONDUCT UNBECOMING: HOW TO AVOID “DEFAMATORY CONDUCT” HR ADVISOR MARCH/APRIL 2005 21 cation.”3 This means that to es-tablish