April 13, 2009

The National Law Journal reports that, in the down economy, workplace defamation lawsuits are on the rise. "A bad reference, statements made in employee performance reviews, internal documents, termination meetings and conversations among managers and supervisors" are all potential grounds for defamation claims.

One former Staples manager, fired for violating the company's travel and expense policy, sued after the company circulated an email message explaining (truthfully) why he had been let go. Reversing summary judgment for the employer, the First Circuit ruled the suit could proceed.

When firing an employee, "There is no risk-free way to go," said one prominent employment attorney. Escorting a terminated employee out of the building, or locking her out of computer systems, could lead to a defamation suit. But go easy, and the result could be the loss of proprietary information or vandalism accompanied by negligence claims.