DEFAMATION

Keeping an 11-inch knife at work cuts off defamation claim

An employee who was terminated for keeping an 11-inch knife in her desk drawer, among other reasons, sued her former employer for defamation when she sought to be rehired years later. She claimed that the negative comments in her personnel file regarding her past behavior defamed her. Read on for the court's piercing analysis of this dicey situation.

Former employee didn't make the cut

Lauree Stolarczyk worked for Spherion Corporation, a temporary staffing agency. She spent her last four months on assignment at R.R. Donnelley Company in St. Paul. While there, she allegedly engaged in "strange" behavior, including rifling through office drawers without permission, erupting into disrespectful outbursts, chanting, drawing pictures of dead people, and keeping an 11-inch knife in her desk drawer. When confronted about her behavior, she denied the outbursts and the morbid pictures but admitted that she looked through office drawers, doodled, and kept a knife in her desk drawer (so she could "cut her lunch"). After being placed on probation by R.R. Donnelley, Stolarczyk was released and ultimately left Spherion.

Approximately three years later, Stolarczyk reapplied for employment at Spherion. After interviewing her, company officials reviewed her personnel file from her previous stint with the company and decided that she shouldn't be rehired. When she asked why she wasn't being rehired, Spherion told her it was primarily because of her previous behavior while working at R.R. Donnelley, which was documented in her file.

Sticking it to the company

Stolarczyk filed age and gender discrimination charges with the Equal Employment Opportunity Commission (EEOC). After the charges were dismissed, she dropped the discrimination angle and took a stab at suing the company in federal court for defamation, claiming that certain statements in her file subjected her to ridicule and damaged her reputation. Those statements included accusations that she:

• brought a weapon (i.e., a knife) to work;
• drew pictures of dead people;
• had "outbursts";
• chanted;
• had "behavioral problems"; and
• wasn't qualified for rehire.

Under Minnesota law, Stolarczyk had to prove that the alleged defamatory statements were: (1) communicated to a third party, (2) false, and (3) tended to harm her reputation in the community. Spherion argued that she failed to prove those elements. It also claimed that even if the statements proved to be false, it had qualified and absolute privileges to make them.

Employee loses any way you slice it

Judge James Rosenbaum of the U.S. District Court for the District of Minnesota skewered Stolarczyk's claims, finding that none of the above-mentioned statements supported a claim for defamation. He first explained that true statements cannot be defamatory since falseness is one of the essential elements of the claim. He then noted that Stolarczyk didn't deny some of the allegations (e.g., the knife); she merely offered explanations for her behavior.

The judge determined, however, that the company's characterization of the knife as a weapon rather than a dining implement wasn't a "false statement." Similarly, the assertion that Stolarczyk drew "dead people" was simply an interpretation of her "art work." The statements couldn't be proven false, nor could the claims that she had "behavioral problems," engaged in "outbursts," and was "not qualified." That's because they represent subjective views of her behavior and are open to interpretation.

Next, Judge Rosenbaum concluded that regardless of the truth or falsity of the statements, Spherion had an absolute privilege to make them in its response to the EEOC. Any statements uttered or published in the course of a judicial proceeding (i.e., any matter before a "tribunal or officer clothed with judicial or even quasi-judicial powers") is absolutely privileged. The statements cannot be deemed defamatory, even if they are made maliciously and with the knowledge that they are not true.

Similarly, the court determined that the comments in Stolarczyk's personnel file were subject to a qualified privilege since they were made in good faith for a proper purpose based on reasonable cause, and she was unable to show that the comments were made with actual malice. The judge observed that Minnesota law generally recognizes a privilege between former and prospective employers if the statements meet the tests of good faith and proper purpose. Since she couldn't prove that the statements were false or overcome the privileges attached to them, her lawsuit was dismissed. Lauree Stolarczyk v. Spherion Corporation a/k/a Spherion Atlantic Enterprises LLC., No. 08- CV-4678 (D. Minn., March 11, 2009).

The point of it all

Like so many employment-related cases, this decision is a ringing endorsement for good personnel practices. A good-faith investigation of alleged wrongdoing and discussion of the findings in the proper context will shield you from defamation claims like this one. In addition, anything offered in a judicial or quasi-judicial proceeding will be afforded absolute privilege.

Of course, that doesn't mean you have a free pass to go out and say anything you want about a former employee. The qualified privilege applies only for statements made under certain circumstances in which the law has decreed that employers should feel free to speak the truth (e.g., when providing an employment reference or conducting a performance evaluation). If there was no good reason to make the statement or you didn't have a legitimate basis for believing it, a court could conclude that the statement was offered with malice, which overcomes the qualified privilege. Even an absolute privilege can be overcome if otherwise defamatory statements are offered in a judicial proceeding in which they have no relevance.

Ultimately, despite the availability of truth and privilege as protection against defamation claims, the claims themselves can still be expensive. Minnesota employers should always evaluate whether there really is a need to make or publish statements that might be perceived as defamatory. Sure, it might be satisfying or helpful to offer a negative reference about a former employee, but is it really necessary? What is the benefit to the company in offering the reference compared to the possible cost of having to defend a defamation lawsuit or ― worse yet ― losing that lawsuit because a judge or jury didn't believe you were acting in good faith? The answers to these questions should guide your decisions.

Copyright 2009 M. Lee Smith Publishers LLC

MINNESOTA EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual legal problems, but rather, to provide information about recent developments in Minnesota employment law. Individuals having questions about specific legal issues should consult with the attorney of their choice.