Employment Post-Termination Defamation and Disparagement Claims: Avoiding Liability, Limiting Damages

Description

When an employment relationship ends, both employers and employees can feel that the situation was unfair or unjust in some way. What each party says publicly and privately about the other can be the subject of defamation claims and potentially significant damage awards.

Recent cases have resulted in multi-million-dollar awards to employees that sued former employers for defamatory disclosures on termination paperwork. These cases are cautionary tales for employers--there is a difference between a frank disclosure and a harmful exaggeration or lie. Employers who are legally required to report the reasons for an employment termination should implement proactive measures for accurate, but prudent filings that satisfy any regulatory agency's requirements and minimize the likelihood of defamation lawsuits.

Employers also seek defamation claims against former employees, often based on reviews published on the internet. Websites typically refuse to remove potentially defamatory statements, based on both First Amendment and Section 230 of the Communications Decency Act, which can lead to damage to the employer's reputation. Employers should be careful about pursuing all sorts of perceived defamatory statements as recent anti-SLAPP decisions have allowed defendants to seek dismissal of defamation cases in situations where the action attempts to infringe on a person's right to petition or to speak or associate freely in connection with a matter of public concern.

Some employers try to include non-disparagement language in employment contracts as well as severance agreements. In a case before the National Labor Relations Board, it was found that such restrictions violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by restricting employees' rights under Section 7 of the NLRA. Under Section 7, employees have the right to choose to engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection," such as discussing wages, benefits, and other terms and conditions of work with other employees. Section 8(a)(1) restricts employers from interfering with employees attempting to exercise their Section 7 rights.

Listen as our expert panel discusses recent cases related to employment and defamation. The panel will address how employers should document grounds for termination, when employees or employers have the best potential for a defamation case, and what type of non-disparagement language will be enforceable against employees during and after employment.