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March 28, 2018

Is my ex-boss allowed to tarnish my reputation?


When an employment relationship ends, things can turn nasty. We often get calls from employees who suspect their former employer is smearing their name. Talk of this nature is upsetting and can make re-employing difficult, but is it defamation?

Defamation refers to activity that harms another person’s reputation through communication with a third party. Defamation captures two types of conduct:

  1. Libel: Defamation with a permanent record (e.g. email, video, newspaper); and
  2. Slander: Defamation with no permanent record (e.g. spoken statement or a hand gesture).

In an employment context, defamation might include damaging statements made in an email to all staff, a phone call to a prospective employer or a report to a regulatory organization. Such statements alone, however, aren’t enough to succeed in court. An employer has several defences to a defamation claim, including “truth” and “qualified privilege”.

The defence of truth is fairly straightforward – if the damaging statement is true, the employer won’t be held liable. For example, if your former employer tells your industry peers that you called a colleague stupid, and you did, you’ll have a hard time arguing defamation.

Qualified privilege protects statements that, while potentially damaging to an employee’s reputation, are non-malicious and well-intentioned. This defence is typically used to protect subjective statements. For example, a manager may tell a prospective employer that you performed poorly. Unless you can show that this statement was malicious, the employer is unlikely to be liable. Qualified privilege would also capture internal company communications, such as your manager informing human resources of your termination so they can update their records.

Because of these defences, employees often have a hard time obtaining damages for defamation against their former employers. This is not to say that it doesn’t happen. In a case earlier this year, Hampton Securities Limited v Dean , an employee received $25,000 in damages for defamation after her employer reported to her regulatory body that she had been terminated for, amongst other reasons, unauthorized trading. The Court found that the accusation had a devastating impact on the employee and was indefensible.

For one, the statement was untrue. The employee was not terminated for unauthorized trading but for refusing to contribute to her reserve account. Secondly, in submitting the report, the employer either knew that they weren’t telling the truth or were reckless in that regard. As a result, the statement exceeded the legitimate purposes of reporting to a regulator.

Dean is a warning for employers who might exaggerate the reasons an employee was terminated. Employers must be cautious about making statements that could harm the reputation of a former employee. If a court finds that the statement was untrue or exaggerated and was not made for a bona fide and legitimate purpose, the employer could be found liable for defamation.

Millard & Company has extensive experience obtaining compensation for employees whose rights have been breached and advising employers on their legal obligations. Contact us to discuss your options.

By Mika Imai; photo by Simone Lovati, cc.

 

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