One of the fastest growing areas of the law in the employment context are lawsuits based on the allegation that a previous employer has made false statements about an ex-employee, which in turn caused the employee to lose a job, or be embarrassed in the community. These “defamation” actions are characterized as either libel (written or printed defamation) or slander (spoken defamation). The standard used by the courts to establish such a claim is whether (a) the false communication tends to injure a person’s reputation, by exposing him or her to public hatred, contempt, ridicule, or financial injury, or (b) whether the false statement tends to impeach a person’s honesty, integrity, or virtue. For example, false statements that adversely reflect upon an employee’s job fitness or abilities are defamatory, or statements that an employee has engaged in criminal conduct (such as using illicit drugs), is dishonest, lacks integrity, or has a disease (such as AIDS or a venereal disease).
Employers are often times sued for defamation when a supervisor or human-resources person makes statements about an investigation, or termination decision, that later is determined to be false and/or misleading. This happens when employers are called for references, which directly leads to the employee losing his or her chance to obtain another job. Other defamatory actions include false statements to persons in the community or family members that lead to embarrassment or ridicule.