For California employers, silence is a valuable, yet underrated, asset in certain situations. You terminate Employee X for stealing from the company. You did a thorough investigation on the matter and have plenty of documentation which you believe proves Employee X stole from your company. You feel justified in terminating Employee X because you believe they are a "rotten thief." A few weeks after Employee X is terminated, a client who worked with Employee X asks why they are no longer with the company. You respond "Employee X is a rotten thief." Or possibly another employer calls to verify Employee X's prior employment with your company. When the employer asks if Employee X would be eligible for rehire you answer "No! Employee X is a rotten thief!" Sometime later you are served with a Complaint brought by Employee X. Along with the causes of action of wrongful termination or discrimination, there is a claim for defamation.
There is a disturbing trend in employment actions where plaintiff-employees and their attorneys are commonly including a cause of action for defamation. Defamation and slander in the employment context arise when the former employee alleges the employer made misstatements about the employee after his or her termination that hindered their ability to obtain new employment or hurt a new business they started post termination.
In a recent Sacramento Superior Court case Sallustio v. Kemper Independence Insurance, the plaintiff-employee, Robert Sallustio alleged he was wrongfully terminated for standing up for a disabled employee's position. He also made allegations that Kemper made up false and destructive statements designed to defame him and destroy his career. During the course of the case, Sallustio's claims for retaliation and discrimination were dismissed by the court. By the time the matter went to trial Sallustio's only remaining claim was for defamation. The jury found in favor of Sallustio finding that he had been damaged by his former employer's alleged statements to the tune of $5.5 million dollars. Kemper is currently seeking to overturn the jury's verdict.
How can you protect yourself against a defamation claim? Remember silence is golden. You may believe that Employee X is a "rotten thief" and therefore truth will be your defense to any defamation claim. However, your reasoning and investigation will be put under a magnifying glass once a claim is brought and if there is any question if Employee X actually was not a "rotten thief," their claim for defamation may gain traction. The best policy for inquiries about an employee post termination is to
only provide the dates of employment, job title, and last salary/hourly wage. If a client or potential employer attempts to dig deeper, diplomatically indicate you cannot say more pursuant to company policy applicable to all employees. If you have concerns or questions about the information to provide in post termination inquires, consult with competent employment law counsel.