Workplace defamation

An allegedly defamatory statement is protected by a qualified privilege if the statement was made in good faith and upon a proper occasion, from a proper motive, and was based on reasonable or probable cause.  

The concept of qualified privilege is often applied to communications between former and prospective employers about employees.  The concept is broader, however, and can be asserted in any context where the speaker had a legitimate purpose and good faith. The most commonly litigated issue in workplace defamation cases is whether the defendant acted out of malice so as to defeat the conditional privilege surrounding most employment matters.  A “conditional privilege will virtually always attach, as an initial matter, to statements made about employees[.]”

In Stuempges v. Parke, Davis & Co., the Minnesota Supreme Court explained the rationale behind the qualified privilege in employment situations: "[A]n employer called upon to give information about a former employee should be protected so that he can give an accurate assessment of the employee’s qualifications. It is certainly in the public interest that this kind of information be readily available to prospective employers, and we are concerned that, unless a significant privilege is recognized by the courts, employers will decline to evaluate honestly their former employee’s work records."

Minnesota appellate courts have repeatedly and consistently recognized a qualified privilege with regard to communications by an employer about an employee relationship. A qualified privilege, however, can be defeated by a showing of “malice.”  Malice has been defined as “actual ill will, or a design causelessly and wantonly to injure plaintiff.  Because a requirement of a qualified privilege is that the statement be made in good faith, this can be seen as the flip side of the same coin.  Workplace defamation litigation therefore follows a ping-pong-like pattern starting with plaintiff’s complaint of defamation, then defendant’s assertion of a qualified privilege, next plaintiff’s claim of malice, and finally defendant’s motion arguing that there is no evidence of malice. 

There are various means of establishing facts to show “malice.” Where there is an accusation of theft, misconduct, or a crime committed on the job an employer may be barred from invoking the qualified privilege if it did not conduct an investigation.  The second method to determine if a defendant acted out of malice or knew the statement was false is look for “extrinsic evidence of ill feeling, or intrinsic evidence such as exaggerated language or the extent of publication.”

"Disparagement" is the act of saying something negative or pejorative about a person. A disparaging statement can be true. It is therefore NOT the same as defamation. Generally, under Minnesota law, you cannot sue someone for disparagement unless the person has signed an enforceable contract agreeing not to disparage you. 

A non-disparagement clause is a provision in an agreement not to disparage a person or company. These types of clauses are fairly common in severance agreements and settlement agreements resolving other legal claims.  They are meant to induce the parties to not say bad things about each other in the future so as to avoid further conflict. Non-disparagement clauses are dangerous, however, for the reason that breaching a non-disparagement clause could itself lead to another legal claim. Such provisions must therefore be entered into with caution.

Defamation "per se" is often misunderstood. Per se defamation means that the plaintiff need not prove actual harm. It does not mean the plaintiff automatically wins. 

Historically, under common law, there are four categories of slander "per se": statements that falsely (1) accuse a person of a crime, (2) accuse a person of having a loathsome disease, (3) accuse a person of serious sexual misconduct or unchastity, or (4) accuse a person of improper or incompetent conduct regarding a person's business, trade or profession. (Note that libel of any kind is actionable per se, so this is one area where it may make a difference if the defamation was spoken or written.)   

Defamation by compelled self-publication is a limited exception to the requirement that a statement must be communicated to a third-party in order to be actionable as defamation. It applies only when the person to whom a false statement is made is "compelled" to repeat or publish the defamatory statement to a third person and it was foreseeable to the defendant that the plaintiff would be compelled to do so.  

"Compelled" means that the defamed person has no reasonable means of avoiding publication of the statement or avoiding the resulting damages. Minnesota is one of only a few states that recognizes this doctrine and it has been applied only narrowly and cautiously by the courts. 

The amount of damages that might be awarded to a successful plaintiff in a defamation case is impossible to predict with precision and largely in the discretion of the jury. Depending on the facts, a plaintiff can potentially seek actual damages, presumed damages, and punitive damages.  

Actual damages might be the amount the plaintiff would have earned at a job that he or she would have been offered but for the defamation.  Presumed damages is an amount to compensate the plaintiff for the damage to his or her reputation.  Punitive damages are only allowed in Minnesota where there was a willful or clear disregard for someone's rights.  

Several verdicts or awards in Minnesota defamation cases have exceeded one million dollars, but many more cases are dismissed or resolved before they ever get to trial.