Getting rid of a dud? Take care

Not only is it sometimes difficult to fire an employee who doesn't live up to the mark, it can be costly as well, if the current trend continues.
By Raymond Dreyfack April 1, 1998

Not only is it sometimes difficult to fire an employee who doesn’t live up to the mark, it can be costly as well, if the current trend continues. New York City Attorney Ellizabeth Hobson says, “The backlog of defamation cases initiated by discharged workers against their former employers is close to an all-time high. Some cases on file show judgments awarded in excess of $10 million.”

Usually the higher priced the terminated employee, and the tighter the labor market, the greater the judgment. An engineer in his mid-30s, who blamed “loss of reputation due to defamation” for his inability to obtain new employment, won a $7 million suit.

Defamation comes in a variety of brands and the plaintiff must prove that the ex-employer’s statement was “published” which means written or verbal “publication.” Proof must also be furnished that the statement was false and resulted in injury.

“One way for a company to avoid getting stung,” says Hobson, “is to initiate a policy for reference requests to be handled by skilled personnel executives with the training and savvy to avoid careless and thoughtless statements.” The importance of care must also be stressed with regard to other than reference situations as well.

In one situation, a suit was initiated by a discharged welder unable to find reemployment in a suburban Ohio town. He won a fat award after being able to prove that a statement made by his former supervisor while at lunch with two other supervisors from nearby plants caused “irreparable damage to his reputation.” The statement: “That guy’s an accident waiting to happen,” made the rounds in the local community, the plaintiff claimed, and resulted in his “virtual blacklisting.”

Examples of defamation involve statements alleging dishonesty, sexual misconduct, and incompetence which reach prospective employers.

Question: What steps can management take to minimize the risk of defamation lawsuits?

Safest course: As stated, those authorized to respond to reference inquiries should be highly selective. On top of that, supervisors and managers should be briefed and made aware of the pitfalls and risks involved. Care should be taken to assure that performance appraisals are seen only by authorized personnel. Finally, all personnel should be cautioned against expressing negative comments about other employees, former and current.