DEFAMATION IN THE WORKPLACE
and
UPDATE ON EMPLOYEE BLOGGING
(HBA – Labor & Employment Section)
Presented by:
John K. Edwards
Partner, Houston Office
Jackson Walker L.L.P.
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Defamation Defined
A tort cause of action under state law generally
defined as a communication, oral or in writing,
that tends to injure a person’s reputation and
thereby exposes the person to public hatred,
contempt, ridicule, or financial injury.
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Defamation Defined (cont’d)
Libel – Statutory Cause of Action
“A libel is a defamation expressed in written or other
graphic form that tends to blacken the memory of the dead
or that tends to injure a living person’s reputation and
thereby expose the person to public hatred, contempt or
ridicule, or financial injury or to impeach any person’s
honesty, integrity, virtue, or reputation or to publish the
natural defects of anyone and thereby expose the person
to public hatred, ridicule, or financial injury.”
(Tex. Civ. Prac. & Rem. Code § 73.001)
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Defamation Defined (cont’d)
Slander – Common Law Cause of Action
“Slander is a defamatory statement that is orally
communicated or published to a third person
without legal excuse.”
(Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640 (Tex. 1995))
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Elements of Defamation Claim
1. Publication to a Third Person
The statement(s) must be communicated to a person not the
subject of the communication.
2. False Statement of Fact
The communication must contain a false statement of fact, not opinion.
3. “Of and Concerning” Another
The communication must relate to another identifiable person no requirement of identification by name.
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Elements of Defamation Claim
4. Defamatory Meaning
The communication must expressly contain (or imply in
limited instances) a defamatory meaning as defined by statute
(libel) or common law (slander).
5. Fault
The speaker must have acted with constitutional “actual malice” if a
public official/figure or conditional privilege applies, or with
negligence if a private figure or communication unprivileged.
6. Causation and Damages
Reputational harm must be established, unless defamatory per se
in which case damages are presumed.
(WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568 (Tex. 1998))
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Statute of Limitations
The statute of limitations for defamation is one year
after the cause of action accrues (i.e., the
communication), and republication constitutes a new
cause of action.
(Tex. Civ. Prac. & Rem. Code §16.002(a))
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Common Defenses to Defamation Claim
Truth
At common law, falsity is a required element of the cause of action;
however, under the Texas libel statute, truth is defined as a defense.
Since the statute expressly states that it does not “affect the existence
of common law,” falsity remains a required element of the cause of
action and truth is an affirmative defense.
Truth is evaluated under the “substantial truth” doctrine:
“A statement is substantially true if the allegedly defamatory
statement is not more damaging to the plaintiff’s reputation, in
the mind of the average reader, than a truthful statement would
have been.”
(Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 516-17 (1991);
McIlvain v. Jacobs, 794 S.W.2d 14 (Tex. 1990))
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Common Defenses to Defamation Claim (cont’d)
Opinion
While not technically a defense (defeats element of cause of action
requiring a false statement of “fact”), courts often treat it as such.
(Carr v. Brasher, 776 S.W.2d 567, 568 (Tex. 1989))
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Common Defenses to Defamation Claim (cont’d)
Consent
“The consent of another to the publication of defamatory matters
concerning him is a complete defense to his action for defamation.”
(Restatement (Second) of Torts, § 583; Hooper v. Pitney Bowes, Inc., 895
S.W.2d 773, 778 (Tex. App.—Texarkana 1995, no writ))
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Common Defenses to Defamation Claim (cont’d)
Privilege
Common law and statute provide several absolute and
conditional/qualified privileges. The most common applicable to the
employment context is the qualified privilege for statements made in
good faith, without malice, on a subject in which the maker has an
interest or duty, to another person having a corresponding interest
or duty, and limited to its proper scope, occasion, and audience.
(Dixon v. Southwestern Bell Tel. Co., 607 S.W.2d 240, 242 (Tex. 1980))
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Corporate Liability for Defamation
1. Agency Liability
A business entity is liable for the defamatory conduct of an officer or
agent if that conduct is within the course and scope of their
authority – that is, the defamation is referable to the duty owed by
the officer or agent to the corporation, and the defamation was made
in the discharge of that duty.
(Frank B. Hall & Co., Inc. v. Buck, 678 S.W.2d 612, 627 (Tex. App.—
Houston [14th Dist.] 1984, writ ref’d n.r.e.))
A principal is subject to respondeat superior liability for defamation
“by a servant or other agent if the agent was authorized, or if, as to
the person to whom he made the statement, he was apparently
authorized to make it.”
(Restatement (Second) of Agency, § 254)
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Corporate Liability for Defamation (cont’d)
2.
Direct Liability
Ratification
Ratification is the adoption or confirmation, by one with knowledge of all material
facts, of a prior act that did not then legally bind that person and which that person
had the right to repudiate.
(Wal-Mart Stores, Inc. v. Odem, 929 S.W.2d 513, 530 (Tex. App.–San Antonio 1996, writ denied);
Vessels v. Anschutz Corp., 823 S.W.2d 762, 764 (Tex. App.-Texarkana 1992, writ denied))
Adoption
Liability for continued publication due to a failure to remove defamatory matter one
knows to be exhibited on chattels (which would include a computer system) under
his control. One in that position is required to “exercise reasonable care to abate
the defamation, and he need not take steps that are unreasonable if the burden of
the measures outweighs the harm to the plaintiff.”
(Restatement (Second) of Torts, § 577(2) & cmt. p)
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The Qualified Privilege
The “common interest” qualified privilege is the most valuable defense
available to an employer against an employee claim of defamation!
Elements
1. An employer has a conditional or qualified privilege that attaches to
communications made in the course of an investigation following a report of
employee wrongdoing.
2. The privilege remains intact as long as communications pass only to
persons having an interest or duty in the matter to which the
communications relate.
3. Proof that a statement was motivated by actual malice existing at the time
of publication defeats the privilege.
(Randall's Food Mkts. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995))
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Recurring Employment Issues
1.
Internal Investigations and Discipline
Randall’s Food Mkts. v. Johnson, 891 S.W.2d 640 (Tex. 1995)
Statements to effect that employee had left store without paying for a wreath did
not imply theft and, in any event, statements were made by co-workers/supervisor
during an internal investigation and were thus conditionally privileged.
Rodriguez v. Wal-Mart Stores, Inc., 52 S.W.3d 814 (Tex. App.—San Antonio 2001, no pet.)
Terminated employee’s defamation claim based on co-worker statements to District
Attorney’s office that employee had written an NSF check against employer account
were conditionally privileged, even if risk of misidentification existed, and no malice
present.
Minyard Food Stores, Inc. v. Goodman, 80 S.W.3d 573 (Tex. 2002)
Texas Supreme Court reversed appellate court and upheld a jury verdict against a
company for a defamatory statement, made during an investigation, because
statement not shown to be in furtherance of business or investigation at issue, even
if within “general authority” of the General Manager to make the statement.
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Recurring Employment Issues
Richard Rosen, Inc. v. Mendivil, 225 S.W.3d 181 (Tex. App.—El Paso 2005, pet. denied)
Affirming jury verdict in favor of employee against former employer where, months
after termination, an officer of the company informed the employee’s former
supervisor that employee had been fired.
Rerich v. Lowe’s Home Centers, Inc., 2007 WL 1412881 (Tex. App.—Houston [1st Dist.]
2007, no pet.)
Rejecting defamation claim by employee against former employer based on
communication that employee was terminated because of theft when the same or
similar statements were made by the employee himself to co-workers.
Exxon Mobil Corp. v. Hines, 2008 WL 509412 (Tex. App. [14th Dist.] 2008, pet.denied)
Reversing jury verdict awarding over $400K to two terminated plaintiffs, and
rendering judgment for former employer Exxon Mobil, where alleged violations of
company policy concerning matching educational gifts were communicated
company-wide, holding that reason for termination could be internally
communicated and damages must be based on defamation, not termination.
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Recurring Employment Issues
LESSON: Statements concerning allegations of employee
wrongdoing and/or reason for termination should be limited to
a select few directly involved in investigation or termination,
and results of investigations should be published only to
those with a demonstrated “need to know.”
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Recurring Employment Issues
2.
Applicant/Employee Testing Results
Reeves v. Western Co. of N. Am., 867 S.W.2d 385 (Tex. App.—San Antonio 1993,
writ denied)
Rejecting slander claim based on oral statements made by supervisor of prospective
employer informing both applicant, his wife, and allegedly others that applicant tested
positive for alcohol in screen test because such statements were both true and
conditionally privileged, with no evidence of malice.
Doe v. SmithKline, 855 S.W.2d 248 (Tex. App.—Austin 1993), aff’d as modified
on other grounds, 903 S.W.2d 347 (Tex. 1995)
Rejecting libel/slander claims by an applicant who alleged that he was compelled to
inform prospective employers that his application was withdrawn for failing a drug
test, holding that applicant was aware of the defamatory nature of the statement as
provided in a termination letter, thus failing to meet the compelled self-publication test.
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Recurring Employment Issues
Washington v. Naylor Indus. Services, Inc., 893 S.W.2d 309 (Tex. App.—Houston
[1st Dist.] 1995, no pet.)
Rejecting employee claim of defamation against former employer based on
internal communication of a positive drug test result when the result was
preliminary and employee passed later, confirmatory result, holding that
statement was literally true and conditionally privileged.
LESSON: Applicant/employee should be given test results, and
any further statements should be limited to only those with a
need to know and be confined to the actual results, without
further characterization.
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Recurring Employment Issues
3.
Performance Reviews / Personnel Files
Ellert v. Lutz, 930 S.W.2d 152 (Tex. App.—Dallas 1996, no writ)
Rejecting application of limitations discovery rule where secretary filed suit
against former supervisor based on statements in a memo placed in personnel
file, holding that since employee had access to personnel file all along,
statements were not “inherently undiscoverable.”
Leatherman v. Rangel, 986 S.W.2d 759 (Tex. App.—Texarkana 1999, pet. denied)
Rejecting claim that since a copy of employee’s termination letter was
maintained in her personnel file, it would likely be disclosed in future, thus
constituting “publication,” holding that there is no “anticipatory defamation”
where facts upon which relief sought have not yet occurred.
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Recurring Employment Issues
Schauer v. Memorial Care Systems, 856 S.W.2d 437 (Tex. App.--Houston [1st Dist.]
1993, no writ)
Affirming summary judgment for employer in a defamation action based upon
a mediocre performance review, where plaintiff admitted most of the
statements were true, others were held to be protected opinion, and all were
subject to the conditional privilege.
LESSON:
Document statements concerning employee
performance to support “truth” defense; Performance reviews
should be communicated to employee and supervisor(s) only,
and otherwise documented in personnel file, neither of which
should be communicated beyond those with a need to know
(generally, co-workers do not have a need to know).
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Recurring Employment Issues
4.
References
Duncantell v. Universal Life Ins. Co., 445 S.W.2d 934 (Tex. Civ. App.—Houston [1st
Dist.] 1969, writ ref’d n.r.e.)
Holding that statement by former supervisor to prospective employer “not to fool
with” former employee because he had taken money and could not be trusted
related to plaintiff’s work record and was conditionally privileged, and no liability
absent malice.
Saucedo v. Rheem Mfg. Co., 974 S.W.2d 117, 120 (Tex. App.—San Antonio 1998, pet.
denied)
Applying conditional privilege to adverse statements by former employer to
prospective employer when the job seeker requested that the employer contact the
prior employer for references.
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Recurring Employment Issues
Oliphant v. Richards, 167 S.W.3d 513 (Tex. App.—Houston [14th Dist.] 2005, pet. denied).
Rejecting claim by employee against former employer where, after experiencing
difficulty locating a job, plaintiff hired an investigator to call former employee, who
reported plaintiff had been fired for “substance abuse problems,” holding that by
hiring an investigator, plaintiff invited the defamation and therefore claim barred.
Moon v. Star-Telegram Operating, Ltd., 2007 WL 2460256 (Tex. App.—Fort Worth
2007, no pet.)
Rejecting claim by employee that he was compelled to repeat reason for his
termination – falsifying expense report – to prospective employers since he was
aware that report, if untrue, was defamatory, and thus rejecting compelled selfpublication theory where there is awareness of statement’s defamatory nature.
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Recurring Employment Issues
LESSON: Silence is golden, but if you provide references,
obtain employee consent on front-end, do so in writing, and in
case of adverse separation, stick to the objective and
verifiable reason for termination without characterization (and
inform employee of that reason at time of termination).
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Employee Blogging
1. Definition
“Blog” is short for web log, an internet-based personal journal or diary
containing a writer’s unfiltered commentary, usually in reverse
chronological order, on one or more subject matters, often with posting
of reader comments and links to other related blogs or websites.
2. Scope
There is a blog in existence on virtually every imaginable topic
somewhere in the blogosphere. It is estimated that there are currently
over 41 million blogs.
Nearly 70% of companies have no policies or guidelines in place for
employee bloggers.
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Protection For Employee Blogging
Public Employees
Government employees enjoy First Amendment protection for their
employment-related blogging activities. The Pickering-Connick test,
devised from two U.S. Supreme Court cases, Pickering v. Board of
Education (U.S. 1968) and Connick v. Myers (U.S. 1983), is often used to
balance the free expression interest of the blogger against the
government’s interest in maintaining an efficient workplace without
disruption.
Private Sector Employees
Employees in the private sector are not protected by the First Amendment
because there is no state action trigger. Such employees must rely on
contract, common law, or statute for protection (e.g., Collective
Bargaining Agreements, NLRA, Title VII, Sarbanes-Oxley and other
whistleblower statutes).
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Employee Blogging Claims
Defamation
• Third-Party claim against employee/company
• Co-worker claim against employee/company
Discrimination/Sexual Harassment
• Employee claim of discrimination against co-worker/company
• Employee complaint against company of discrimination
Violation of Intellectual Property Rights
• Misappropriation of IP
• Copyright Violation
• Right of Publicity
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Employee Blogging Claims (cont’d)
Breach of Confidentiality/Invasion of Privacy
• Duty of Loyalty / Insider Trading
• Publication of Private Facts / Intrusion
• Confidential by Law (e.g., HIPPA)
Violation of Collective Bargaining Rights
• Union Agreements
• NLRA
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Notable Developments
1.
Immunity under Federal Law?
Section 230 of the Communications Decency Act of 1996.
“No provider or user of an interactive computer service shall be treated
as the publisher or speaker of any information provided by another
information content provider.”
Blakey v. Continental Airlines, Inc. 164 N.J. 38 (2000).
If a company acts as host to an employee blogosphere, even absent
direct sponsorship or approval of content, it may be subject to vicarious
liability for comments made by an employee, including statements rising
to the level of harassment or discrimination against another employee.
LESSON: Since employer concerns over blogging generally center around
content created by the employee and not taken from another “content
provider,” employers should not expect immunity under Section 230.
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Notable Developments
2.
Unmasking the Anonymous Blogger
In re Does 1-10, 242 S.W.3d 805 (Tex. App.–Texarkana 2007, no pet).
First Texas case addressing the extent to which a company can discover
the identity of an unknown blogger by compelling third-party discovery
against an ISP.
Hospital plaintiff sought to compel non-party ISP to disclose identity of
blogger that posted defamatory statements about the hospital. Trial court
ordered disclosure, but the Court of Appeals conditionally granted a writ
of mandamus, instructing the trial court to determine whether the plaintiff
could meet a summary judgment standard of proof for each element of
the defamation claim.
LESSON: Bloggers can remain anonymous in defamation actions if the
plaintiff is unable to establish sufficient evidence to defeat a no-evidence
summary judgment motion on the required elements of a defamation claim.
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Notable Developments
3.
Blogger Missteps & Other PR Nightmares
Southern Pacific Funding Corporation
Southern Pacific filed for bankruptcy in the late 1990s after its stock price
fell from $17 to $1, a plunge triggered by blog postings that company
executives were covering up multi-million dollar embezzlement and
exaggerating economic forecasts.
John P. Mackey & Whole Foods Market
After the CEO of Whole Foods was outed as “rahodeb,” an anonymous poster
on Yahoo’s Finance stock message board who defended the company and
argued with detractors, the blog was terminated and an SEC investigation was
opened to determine whether anything illegal had occurred. The SEC focused
on posts concerning a competitor, Wild Oats Market, which Whole Foods
ultimately acquired, and whether there was an attempt to manipulate its stock
before the acquisition. The SEC recently decided not to pursue any action,
and Mackey is back to blogging.
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Notable Developments
Burger King
Burger King fired two employees in March, 2008 after it was discovered
that an executive had anonymously posted blogs critical of a
farmworker advocacy group with which the company was embroiled in a
PR dispute over wages and working conditions for Florida’s tomato
pickers.
Delta Airlines
Delta fired an employee for posting suggestive pictures of herself in a
flight attendant uniform on her blog.
Google
Google fired an employee for being critical of the company on his blog.
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Notable Developments
Washington Post
In April, 2008, a Washington Post editorial aide lost his job when he outed
himself as “Christmas Ape,” a blogger on a sports satire website called
“kissingsuzykolber.com”. His blog contained obscene, racist, and sexist
commentary that violated company policy prohibiting conduct or activity
that embarrassed the company.
NASA
A Johnson Space Center employee was suspended in May, 2008 for
partisan blogging, which included soliciting donations and writing
political blog posts that promoted local and state candidates in 2006 and
2007 while at work, in violation of the Hatch Act.
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Notable Developments
Albritton v. Cisco Systems, Inc. (E.D. Texas 2008)
Cisco was recently sued for libel by two Texas patent attorneys based on an employee
blog website called the “Patent Troll Tracker,” which focused on alleged “patent trolls” that
purportedly buy patents simply to use them to file infringement suits. The blog was
maintained anonymously, but the blogger unmasked himself in February, 2008 as Richard
Frenkel, in-housel counsel at Cisco. According to the Plaintiff, Frenkel falsely accused
him of colluding with a court clerk to alter the date on which a pleading was filed so as to
manufacture subject matter jurisdiction.
Cisco added a new clause to its blogging policy in March, 2008:
“If you comment on any aspect of the company’s business or any policy issue the
company is involved in where you have responsibility for Cisco’s engagement, you must
clearly identify yourself as a Cisco employee in your postings or blog site(s) and include a
disclaimer that the views are your own and not those of Cisco. In addition, Cisco
employees should not circulate postings that they know are written by other employees
without informing the recipient that the source was within Cisco.”
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General Policy Guidelines
No blogging while at work (and no use of company property).
If corporate policy permits blogging, the company’s computer
monitoring policies will apply (no anonymous blogging).
No unauthorized use of company trade names, logos, slogans, and
no unauthorized disclosure of trade secrets, trademarks,
copyrights, or any other confidential, proprietary and non-public
information.
No inappropriate content about the company or its employees that
would be considered disparaging, threatening, harassing, or
otherwise discriminatory.
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General Policy Guidelines
(cont’d)
The blog must include a prominent disclaimer that the views
expressed are those solely of the author and not the company.
Employees are solely responsible for blog content, including any
alleged violation of policy or law.
Violation of the blogging policy may subject the employee to
disciplinary action, including termination.
Widely disseminate the
acknowledgment of receipt.
policy
with
signed
employee
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