Defamation Lawsuits: Do You Have a Case Against a Former Employer?

If an employer (or more likely, a former employer) makes false statements about you, you might have a legal claim for defamation. Defamation is a personal injury, which means that you may be awarded damages not only for your financial losses, but also for your emotional distress. A winning party might even be awarded punitive damages, to punish the employer for its wrongdoing. But that's only if you win the case, and defamation can be hard to prove.

What Is Defamation?

Defamation happens when someone makes an intentional false statement that harms another person. When the statement is made orally, it's called slander; a written statement is called libel.

In the job context, defamation claims often arise after the employment relationship ends, when a former employer is asked for a reference. In this situation, the employee claims that a former employer gave a false reference or another statement that damaged the employee's reputation and/or hurt the employee's chances of getting another job. Typically, the false statement is about the reasons why the employee was fired or the quality of the employee's performance.

Proving Defamation

State rules differ on what an employee must prove to win a defamation case. Generally speaking, however, the employee must persuade the judge or jury of these five things:

• The employer made a false statement of fact about the employee. Statements of opinion ("I think Joe had a negative attitude") can't be the basis of a defamation claim. Nor can true statements, no matter how hurtful.

• The employer "published" the statement. In other words, the employer must actually make the statement to someone. Some states recognize "self-publication" as a way of meeting this requirement. Self-publication happens when the employer makes the false statement directly to the employee, who is forced to repeat it to others (for example, when asked by a prospective employer why she was fired from her last job).

• The employer knew or should have known that the statement was false. If the employer believes, in good faith, that its statement was true, there's no defamation claim. However, if the employer acts with reckless disregard for the truth – by repeating a damaging and unsubstantiated rumor without checking into it, for example – that might support a defamation claim.

• The statement was not privileged. Many states recognize that candor and open communication are vital in certain relationships. Statements made in these contexts are privileged, which means that the speaker is protected from liability for making the statement. Many states recognize a qualified privilege – which protects the speaker as long as he or she acted without malice – for statements made in the context of giving an employment reference to a prospective employer. (To find out your state's rules, select it from the list on our Hiring Lawsuits page.)

• The employee suffered harm because of the statement. Certain statements are considered defamatory "per se," which means that the law presumes the statement causes harm (and so the employee doesn't have to prove it). For example, many states consider statements that someone committed a crime or lacks the necessary skills for his or her chosen trade or profession to be defamatory per se. If the employee has to prove damage, the harm usually involves another company's refusal to hire the employee because of the statement.

Suing for Defamation

If you think your former employer may have committed defamation, you should talk to an employment lawyer to find out whether your case is worth pursuing. These claims can be tough to win. The actual misconduct generally takes place in a private conversation that you aren't privy to, so it can be hard to prove a defamatory statement was made. You'll also have to show that the false statement was the reason you were turned down for a new job. And, in states that allow employers to claim a privilege for statements made as part of a reference, you'll have to prove malice on the employer's part.

Before you meet with a lawyer to assess your claims, gather any evidence you have. For example, had you gotten an offer letter or other indication that you would get the new position before your prospective employer pulled the plug? Do you have anything in writing about your former employer's reference policy – or the actual statements that were made? Did you hear anything from the prospective employer that made you suspicious? There are legal tools a lawyer can use to gather evidence of what was said to whom, but you should be prepared to explain what led you to believe that your former employer defamed you (and to hand over any relevant evidence).