In sister judgments delivered a month apart in Papp v Stokes Economic Consulting Inc., 2017 ONSC 2357 and Kanak v Riggin, 2016 ONSC 2837, the Ontario Superior Court of Justice held that both the defences of justification (truth) and qualified privilege can protect employers from liability in defamation for giving negative references of current or former employees.
In Papp, the plaintiff employee, a young economist who had been given notice of his termination due to a shortage of work, lost out on a position with another organization after his employer, an economic consulting company, gave him a partially negative reference. As a result, the young economist sued the employer for damages in defamation; punitive, exemplary and aggravated damages; and damages for intentional infliction of mental suffering.
The employer’s representative testified that he did not intend to give the plaintiff a negative reference nor to hinder his job prospects, and he did give the plaintiff a positive reference with regard to his technical computing abilities. However, the employer’s representative also gave the plaintiff a negative reference with regard to his ability to get along with others and work in a team setting, based on his own personal experiences and those of fellow employees who reported to him. This negative feedback ultimately led to the plaintiff not being hired in the new position.
In Kanak, the plaintiff was formerly a Senior Cost Control Analyst who had been laid off after the defendant employer, an atomic energy corporation, was acquired by another organization. More than a year later, she accepted a conditional offer of employment from another power company, which was subsequently revoked after the defendant employer gave her a partially negative reference. As a result, the plaintiff sued the employer for damages in defamation.
The employer’s representative testified that he liked the plaintiff and in his reference he spoke of the plaintiff’s strengths, including stating that he would hire her in an independent role. However, the employer’s representative also stated in his reference that there had been a lot of conflict between the plaintiff, her supervisor and other employees; that she did not take directions well; that she did not handle stress well; and that he would not hire her in a collaborative role. This negative feedback resulted in the plaintiff’s conditional employment offer being revoked.
In both Papp and Kanak, it was easily established that the respective employers had made defamatory statements: negative comments from an employer in reference to an employee’s attitude and abilities to work with others would clearly lower the employee’s reputation in the eyes of a reasonable person, and the comments were clearly made about the respective employees in a reference to another person.
Thus, the question in each case was whether a defence was available to absolve the employer of liability.
In Papp, both justification and qualified privilege were successfully argued by the employer. The Court found that the employer’s negative statements about the plaintiff were substantially true, and were based on the representative’s personal experience and experiences of other employees that he had verified. The Court also found that a reference check is a context protected by qualified privilege, and that even if the reference had been false, the employer’s representative had not acted with any malice, as he honestly believed his reference to be true. Further, he had not been reckless as he had verified negative comments about the plaintiff made by another employee with other uninvolved employees. As a result, the employer was absolved of liability.
In Kanak, only qualified privilege was argued and it was accepted by the Court. The Court similarly held that an employment reference is protected by qualified privilege. The Court found that the employer’s representative had not acted with malice, as he had spoken both positively and negatively about the plaintiff in his reference, provided examples for his opinions, and honestly believed he was speaking truthfully in doing so. As such, the employer was, once again, absolved of liability.
Liability in defamation for employers who give negative references about their past or current employees has not been considered by courts outside of Ontario. Thus, these two decisions should not be taken to give employers in other provinces free reign to say anything they want about their past or current employees.
However, the dual judgments should give employers some comfort that they will likely not be held liable in defamation if they give a negative reference about an employee. Should an employer choose to give a negative reference, it should be sure to speak as truthfully as possible and to take steps to verify any negative events or reports involving the employee before discussing the employee with someone from another organization. Of course, an employer also should generally feel free to decline to give a reference for an employee about whom it would not speak positively.