Wrongful Termination May Expose Employers to Defamation Claims

Censored_section_of_Green_Illusions_by_Ozzie_Zehner.jpgFederal, state, and local employment statutes prohibit employers from discriminating based on certain protected categories, such as race, sex, or religion. In some situations, an employer may want to fire an employee, but lacks a non-discriminatory basis for doing so. If that employer makes a false statement regarding the employee as a pretext or justification for termination, the employer could be liable for defamation if the statement was made to the public. Defamation law allows an individual to recover damages for false statements, made with knowledge of their falsity, that cause actual harm.

In both New Jersey and New York, the elements of a defamation claim are (1) a false statement, (2) unprivileged or unauthorized publication to a third party, (3) negligence with regard to the statement’s falsity, and (4) actual harm to the subject of the statement. Lee v. Bankers Trust Co., 166 F.3d 540, 546 (2d. Cir. 1999); Dillon v. City of New York, 261 A.2d 34, 38 (NY App. 1999). “Publication” may include written publication, known as libel, or a verbal statement to one or more people other than the subject, known as slander.

New Jersey, along with many other states, follows the “single publication” rule, meaning that a cause of action for defamation begins to accrue when the statement is first published. Barres v. Holt, Rinehart and Winston, Inc., 74 N.J. 461, 462-63 (1977). This rule generally applies to statements published on the internet. Churchill v. New Jersey, 876 A.2d 311, 319 (NJ App. 2005).

Employees may be able to raise defamation claims, along with claims like wrongful termination or discrimination, for any allegedly false statements made in the course of the alleged unlawful conduct. A plaintiff must prove that the employer knew that the statement was false, or was negligent or reckless with regard to the statement’s falsity. They must also prove that they directly suffered harm as a result of the false statement. The statement’s contribution to the loss of their job could certainly serve as proof of harm. In Acciardo v. Millenium Securities Corp., 83 F.Supp.2d 413 (S.D.N.Y. 2000), for example, a court affirmed an arbitrator’s award for defamation based on an employer’s false statement on a form required by the National Association of Securities Dealers, which the plaintiff claimed harmed his job prospects.

Some states allow claims for “defamation by conduct,” meaning that the employer behaved in a way that portrayed the employee in a false light. The Second Circuit noted in Lee v. Bankers Trust Co. that New Jersey does not recognize this claim. The plaintiff claimed that the employer defamed him by searching his office and instructing him to stay away from the office during an investigation of alleged financial misconduct. Lee, 166 F.3d at 543, 546.

A currently pending New York lawsuit, Francisco v. Project Veritas, et al, No. 51182/2014, complaint (NY Super. Ct., Westchester Co., Jan. 27, 2014), involves allegations of wrongful termination, breach of contract, and defamation. The plaintiff accuses his former employer, political activist James O’Keefe, of defaming him after wrongfully terminating his employment, and seeks monetary damages.

If you need to speak to an employment attorney in New Jersey or New York regarding wrongful termination, defamation, or other unlawful employment practices, please contact the Resnick Law Group online, at 973-781-1204, or at 646-867-7997.

More Blog Posts:

Question of Whether Employers Can Fire Employees for Lawful Marijuana Use to Go Before Colorado Supreme Court, The New Jersey Employment Law Firm Blog, May 13, 2014
New Jersey Law Against Discrimination Now Protects Workers from “Salary Secrecy” by Prohibiting Retaliation for Inquiring About Wage Discrimination, The New Jersey Employment Law Firm Blog, March 31, 2014
Lawsuit Claims Employer Fired Plaintiff for Reporting Racial Discrimination, Sexual Harassment Within Company, The New Jersey Employment Law Firm Blog, March 28, 2014
Photo credit: By Mutant669 (Photograph) [GFDL or CC-BY-SA-3.0], via Wikimedia Commons.

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