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Defamation and the Workplace: a Survey of the Law and Proposals for Reform

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Defamation and the Workplace: a Survey of the Law and Proposals for Reform Missouri Law Review Volume 54 Issue 4 Fall 1989 Article 1 Fall 1989 Defamation and the Workplace: A Survey of the Law and Proposals for Reform John Bruce Lewis Bruce L. Ottley Gregory V. Mersol Follow this and additional works at: https://scholarship.law.missouri.edu/mlr Part of the Law Commons Recommended Citation John Bruce Lewis, Bruce L. Ottley, and Gregory V. Mersol, Defamation and the Workplace: A Survey of the Law and Proposals for Reform, 54 MO. L. REV. (1989) Available at: https://scholarship.law.missouri.edu/mlr/vol54/iss4/1 This Article is brought to you for free and open access by the Law Journals at University of Missouri School of Law Scholarship Repository. It has been accepted for inclusion in Missouri Law Review by an authorized editor of University of Missouri School of Law Scholarship Repository. For more information, please contact [email protected]. Lewis et al.: Lewis: Defamation and the Workplace MISSOURI LAW REVIEW VOLUME 54 FALL 1989 NUMBER 4 DEFAMATION AND THE WORKPLACE: A SURVEY OF THE LAW AND PROPOSALS FOR REFORM John Bruce Lewis* Bruce L. Ottley** Gregory V. Mersol*** I. INTRODUCTION Few areas of the law have been subject to as much analysis and criticism during the past twenty-five years as the law of defamation.1 While * Partner, Arter & Hadden, Cleveland, Ohio, B.A., J.D., University of Missouri; LL.M, Columbia University. ** Professor, DePaul University College of Law, B.A., University of Mis- souri; M.A., J.D., University of Iowa; LL.M., Columbia University. *** Associate, Arter & Hadden, Cleveland, Ohio. B.A., J.D., Case Western Reserve University. 1. There is a vast amount of literature analyzing and criticizing the de- velopments in defamation law over the past twenty-five years. Recent books and articles include: L. FoRER, A CHILLiNG EFnCT (1987); C. LAwHoRNE, TM SUPREME COURT AND LIBEL (1981); Defamation and the FirstAmendment: New Perspectives, 25 WM. & MARx L. Rnv. 743 (1984); The Law of Libel Continues to Develop, 90 DICK. L. REv. 539 (1986); Libel, 38 MERCER L. REv. 767 (1987); New Perspectives in the Law of Defamation, 74 CALiF. L. REv. 677 (1986); Sheer & Zardkoohi, An Analysis of the Economic Efficiency of the Law of Defamation, 80 Nw. U.L. R v. 364 (1985); Tiersma, The Language of Defamation, 66 TEx. L. REv. 303 (1987); Comment, American Defamation Law: From Sullivan, Through Greenmoss, and Beyond, 48 Omo ST. L.J. 513 (1987); Abrams, Why We Should Change the Libel Law, N.Y. Times, Sept. 29, 1985, (Magazine), at 34. Published by University of Missouri School of Law Scholarship Repository, 1989 1 Missouri Law Review, Vol. 54, Iss. 4 [1989], Art. 1 MISSOURI LAW REVIEW [Vol. 54 most commentary has focused on the impact of court decisions dealing with media defendants, 2 defamation actions by employees against their employers and former employers have become increasingly common. One study indicates that between 1982 and 1987 employees filed as many as 8,000 such suits and that these suits now account for approximately one- third of all defamation actions.' Verdicts of more than $1 million in these 4 cases are not unusual and some verdicts have reached as high as $6 million. Articles about workplace defamation have generally focused on state- ments resulting in the discharge of an employee and negative references 2. For a discussion of defamation suits involving the media, see R. BE- ZANSON, G. CRANBERG & J. SOLOSKI, LIBEL LAW AND THE PRESS: MYTH AND REALITY (1987); R. LABUNSKI, LIBEL AND TnE FIRST AMENDMENT (1987); N. ROSENBERO, PROTECTING THE BEST MAN (1986); R. SMOLLA, SUNG THE PRESS (1986); Is It Time To Change The Libel Doctrine For Public Figures?, 71 A.B.A. J., July 1985, at 39; LeBel, Reforming the Tort of Defamation:An Accommodation of the Competing Interests Within the Current ConstitutionalFramework, 66 NEB. L. Rv. 249 (1987); Libel Law: Good Intentions Gone Awry, TndE, Mar. 4, 1985, at 93; Rewriting Libel Law, Am. LAW., July-Aug. 1985, at 6-34. A 1988 study by the Society of Professional Journalists found that the number of libel suits against news organ- izations, which rose steadily throughout the early 1980's, has declined 17 percent since 1985 due to the failure of plaintiffs to recover in three highly publicized cases: Gen. Ariel Sharon's suit against Time Magazine; Gen. William Westmoreland's suit against CBS; and William Tavoulareas' suit against The Washington Post. Libel Suits Wane, Press Study Finds, N.Y. Times, Dec. 3, 1988, at 52, col. 4. The Sharon and Westmoreland trials have fueled widespread debate over whether protection should be afforded the media against defamation actions. See R. ADLER, RECKLESS DISREOARD (1986); B. BREWiN & S. SHAW, VIETNAM ON TRIL: WEST- MORELAND V. CBS (1986); U. DAN, BLOOD LIBEL (1987). 3. These figures are taken from a study conducted by Jury Verdict Research, Inc. and quoted in Fired Employees Turn the Reason for Dismissal Into a Legal Weapon, Wall St. J., Oct. 2, 1986, at 33, col. 2. The results of a recent survey quoted in U.S. News & World Report indicate that almost one third of all libel cases come from employees who sue former employers over bad references. The survey also indicated that defending a defamation action can cost up to $250,000, even if the employer wins. U.S. NEws & WORLD REPORT, Oct. 16, 1989, at 125. 4. In Rady v. Forest City Enter., 27 Ohio Misc. 2d 36, 501 N.E.2d 688 (C.P. 1986), a jury awarded a Cleveland woman $2 million in a slander action against her former employer after she was accused of forgery and fired. See Fired Woman Wins $2 Million, Cleveland Plain Dealer, June 4, 1985, at IA, col. 1. The case was later settled on appeal for an undisclosed amount. See Mum's the Word on References as Suits Flourish, Dallas Times Herald, Feb. 22, 1987, at KI, col. 1. In Frank B. Hall & Co. v. Buck, 678 S.W.2d 612 (Tex. Ct. App. 1984), cert. denied, 472 U.S. 1009 (1985), the plaintiff recovered $1.9 million from his former employer for describing him as a "classical sociopath," a "zero," and as "lacking in compunction [sic] or scruples" to a private investigator posing as a new employer. In In re IBP Confidential Business Documents Litig., 491 F. Supp. 1359 (N.D. Iowa 1980), aff'd in part, rev'd in part and remanded, 755 F.2d 1300 (8th Cir. 1985), the jury awarded the plaintiff $1 million in compensatory damages and $5 million in punitive damages. The Court of Appeals ordered a new trial. https://scholarship.law.missouri.edu/mlr/vol54/iss4/1 2 Lewis et al.: Lewis: Defamation and the Workplace 1989] DEFAMATION AND THE WORKPLACE 799 given by former employers.5 A defamation claim, however, may result whenever an employer makes statements about its employees, including statements in performance evaluations, 6 notices of disciplinary action,7 re- ferences,8 and communications to persons outside the company.9 Employees may also base defamation claims upon statements made during union organizing campaigns,' 0 labor disputes,1" and grievance resolution proceed- ings held pursuant to collective bargaining agreements.' 2 While employers are the most frequent targets of this litigation, defamation suits have also been brought against employees and against unions. 3 The recent trend toward greater awareness of the rights of white collar and other non-unionized employees has led to the use of defamation suits as weapons in employees' arsenal to challenge discharges and company conduct perceived to be arbitrary or discriminatory. 14 Frequently, a desire 5. See W. HOLLOWAY & M. LEECH, EMPLOYMENT TERMINATION 307-29 (1985); L. LARSON & P. BOROWSKY, UNJUST DIsMIssAL § 4.06 (1987); J. McCARThY, PUNITI DAMAGES IN WRONGFUL DISCHARGE CASES §§ 4.16, 4.17 (1985); H. PEuurr, EM- PLOYEE DIshussAL LAW AND PRACTICE, 207-09 (1984); B. ScHIEi & P. GRoSSMAN, EMPLOYMENT DISCRUMNATION LAW 767-70 (2d ed. 1983); Duffy, Defamation and Employer Privilege, 9 EMPLOYEE REL. L.J. 444 (1983). Defamation in the workplace has recently become a topic for discussion in the press. See Revenge of the Fired, NEWSWEEK, Feb. 16, 1987, at 46; Boss Can Be Sued For Saying Too Much, N.Y. Times, Nov. 27, 1987, at B26, col. 3; Mum's the Word on References as Suits Flourish, supra note 4; Fired Employees Turn the Reason for Dismissal Into a Legal Weapon, supra note 3; Why References Aren't 'Available on Request', N.Y. Times, June 9, 1985, at F8, col. 4. 6. See infra notes 205-15 and accompanying text. 7. See infra notes 216-25 and accompanying text. 8. See infra notes 248-54 and accompanying text. 9. See infra notes 226-47 and accompanying text. 10. See infra notes 274-85 and accompanying text. 11. See infra notes 295-96 and accompanying text. 12. See infra notes 297-311 and accompanying text. 13. See Jeffers v. Screen Extras Guild, 107 Cal. App. 2d 253, 237 P.2d 51 (1951) (suit by labor leader against union news letter); Teare v. Local Union 295, 98 So. 2d 79 (Fla. 1957) (suit by nonunion plumber against union for defamatory statement to employer); Cline v. McLeod, 180 Ga. App. 286, 349 S.E.2d 232 (1986) (suit by nonunion member and former union member against union for statements in a letter to union members); Jamison v. Rebenson, 21 Ill. App. 2d 364, 158 N.E.2d 82 (1959) (suit by union organizer against officers and an employee of a union); Hanlon v. Davis, 76 Md. App. 339, 545 A.2d 72 (1988) (suit by former union president against member for statements posted and distributed through employer's interoffice mail system); Steinhilber v.
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