A recent article posted by the ABA Journal highlighted the increased prominence of defamation claims in lawsuits brought by employees against their current or former employers. (“Fired workers increasingly add defamation claims to their lawsuits,” by Debra Cassens Weiss, posted May 27, 2015). To reduce the risks associated with these claims, it is important for employers to have at least a basic understanding of the law of defamation so that they know what to avoid.

Defamation Basics

The specific elements and standards of proof for defamation claims vary somewhat from state to state, and there are many nuances depending on the specific nature and the context of the statements at issue. Generally however, to establish a defamation claim, a plaintiff has to show four elements:

  1. The defendant made a false statement about the plaintiff;
  2. There was an unprivileged publication to a third party;
  3. The defendant either knew the statement was false or lacked reasonable grounds to believe the statement was true;
  4. The plaintiff was damaged by the publication of the false statement.

While many states (including Illinois) have laws that provide employers from some protection from defamation claims based on statements made in response to an employee reference check, it is important to note that these laws typically do not provide total immunity to such claims. For example, in Illinois, the Employment Record Disclosure Act only protects statements about an employee’s job performance that are “truthful” or that the employer believes in good faith to be truthful.

Minimizing Defamation Risks

The first point employers should observe regarding defamation claims is that truth is a defense: even statements that destroy someone’s reputation are not considered defamatory if they are true. So, rule number one for protecting your organization against employee defamation claims: don’t lie.

Unfortunately, establishing that a statement is true in court is often easier said than done, and is frequently difficult to do short of a trial. Consequently, it is not wise for employers to rely on the truth as their sole defense to defamation claims. Employers can, however, exercise much greater control over the second element of a defamation claim: unprivileged publication to a third party. While one can debate whether a tree that falls in the woods with no one to hear makes a sound, the law is clear that a statement that is not shared with any third party cannot form the basis of a defamation claim. So, to control liability, employers are well advised to adopt a policy of providing only neutral employment references to prospective employers unless there is a legal requirement or other compelling business justification for disclosing more information. Managers and supervisors should also be counseled not to make critical comments about current or former employees to outsiders or (especially) on social media. Even communications within the organization should be controlled so that, for example, unfavorable information regarding employees is shared only with those personnel who have a legitimate need for the information.

Finally, employers should understand that not all statements are of equal concern when it comes to defamation claims. Under the law, certain kinds of statements are deemed to be so inherently damaging to a person’s reputation that they are regarded as per se defamatory, meaning that the plaintiff does not have to present evidence of any specific harm resulting from the statements. Rather, harm is presumed as a matter of law. Statements that fall into this category include statements accusing the plaintiff of committing a crime, of inability to perform or lack of integrity in performing their duties of employment or profession, or of accusing the plaintiff of engaging in “adultery or fornication.” For this reason, employers need to be extremely careful in how they handle any communication accusing an employee of engaging in dishonesty or criminal activity. Likewise, in describing an employee’s job performance, employers should be more cautious in their handling of statements about an employee’s ability or competence to perform their job than may be necessary for more objective factual statements about whether an employee met performance expectations.

Actions To Consider

A few concrete steps that you can consider to reduce your organizations’ exposure to defamation claims include:

  • Adopt a comprehensive electronic communications policy that includes specific prohibitions on knowingly or maliciously spreading false information online.
  • Adopt uniform policies and procedures for responding to employee reference requests, and ensure that your management and supervisory employees understand and comply with them. Larger organizations should consider establishing a specific “hotline” for such requests staffed with trained personnel.
  • Review your employee performance evaluation process to ensure that wherever possible it focuses on objective, fact-based performance criteria.
  • Provide employees, particularly management and supervisory employees, training on the pitfalls of hasty, hostile, or ill-considered e-mails, text messages, or other electronic communications.

While there is no way to completely avoid the risk of employee defamation claims, taking these steps can avoid some obvious risk factors and make it easier to defend any claims that may be filed.