STRATEGIES FOR DEFENDING WORKPLACE DEFAMATION

STRATEGIES FOR DEFENDING WORKPLACE DEFAMATION CLAIMS

TERRY J. SMITH *

ROBERT R. DUDA JR.

1. Defamation Claims Go Hand-in-Hand With Termination

Employers are increasingly finding themselves defending a claim for defamation in

addition to a terminated employee’s typical claims for discrimination or wrongful

discharge. Workplace defamation claims are especially problematic for employers

because they often turn on factual issues and disputes making them problematic at

summary judgment – in contrast to discrimination claims which are often ripe for

summary dismissal. Workplace defamation claims also considerably increase the

exposure of the employer as they allow for uncapped damages to an employee’s

reputation and potentially even punitive damages. The cost of defending workplace

defamation suits can be quite costly to the employer as they are often not covered

under an employer’s insurance policy.

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* Terry J. Smith is a partner with Smith O’Callaghan & White, a Chicago law firm

representing employers in labor and employment law. Robert R. Duda Jr. is an associate with the

firm and assisted in the preparation of these materials.

The firm has extensive experience in employment-related litigation in the federal and

state courts, in particular in the areas of trade secret misappropriation, covenants not to compete,

unfair competition, workplace defamation, employment discrimination, sexual harassment, wrongful

discharge and ERISA. The firm represents several large national and international corporations, in

matters arising in the Chicago area and in other jurisdictions, as well as mid-size companies and

professional entities such as law firms.

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2. Elements of Defamation

In order to state a claim for defamation under Illinois law, the plaintiff must show

that the defendant made a false statement concerning plaintiff, that there was an

unprivileged publication of the defamatory statement to a third party by the defendant

and that the plaintiff was damaged. Gibson v. Philip Morris, Inc., 292 Ill. App. 3d

267, 272, 685 N.E.2d 638 (5

Dist. 1997) (former employee stating workplace

defamation claim against employer).

3. Defamation Per Se

A statement is defamatory per se (meaning there is no need to establish actual

damage to one’s reputation) if it is obviously harmful to the plaintiff’s reputation

because the words (i) impute the commission of a criminal offense; (ii) impute an

infection with a loathsome communicable disease; (iii) impute an inability to perform

or want of integrity in the discharge of duties of employment; (iv) prejudice a party,

or impute a lack of ability, in a person’s trade, profession or business; or (v) impute

adultery or fornication. See e.g., Van Horne v. Muller, 185 Ill. 2d 299, 307 (1999)

(statements imputing that plaintiff committed a criminal act were defamatory per se);

Bryson v. News America, 174 Ill. 2d 77, 90 (1996) (statements imputing that plaintiff

was unchaste were defamatory per se).

# Employer calling an employee a poor performer may or may not be

actionable as defamation per se even though it falls under a per se

category:

Becker v. Zellner, 292 Ill. App. 3d 116, 126, 684 N.E.2d 1378, 1386

Dist. 1997) (defamation per se found where employer’s statement

imputed a lack of ability in employees’ trade, profession or business

– employer’s “defamatory statements [that employees’ work product

was worthless] were obviously intended to describe and denigrate

plaintiffs’ abilities”).

Gibson v. Philip Morris, Inc., 292 Ill. App. 3d 267, 274, 685 N.E.2d

638, 644 (5

Dist. 1997) (affirming judgment against employer and

individual employees for compensatory and punitive damages in

amount of $1 million for defamation per se, where it internally

communicated false statements regarding terminated employee’s

failure to follow employer’s policies thereby imputing an inability or

lack of integrity of employee in the discharge of his duties).

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Kolegas v. Heftel Broadcasting Corp., 154 Ill. 2d 1, 14, 607 N.E.2d

201, 208 (1992) (plaintiff stated claim for defamation per se where

plaintiff’s professional reputation was injured due to statements made

by defendants that “imputed that [plaintiff] lacked integrity in

carrying out his professional duties and prejudiced [him] in his

business”).

Barakat v. Matz, 271 Ill. App. 3d 662, 672, 648 N.E.2d 1033, 1042

Dist. 1995) (statements that plaintiff was not “any good as a

doctor” and that his “opinion wasn’t any good” were defamatory per

se where they directly related to plaintiff’s professional conduct and

ability).

Compare with, Hopewell v. Vitullo, 299 Ill. App. 3d 513, 519, 701

N.E.2d 99, 104 (1

Dist. 1998) (employer’s statement that plaintiff

“was fired because of incompetence” was nonactionable opinion that

had no precise meaning and could not be verified as true or false).

Quinn v. Jewel Food Stores, Inc., 276 Ill. App. 3d 861, 866-867, 658

N.E.2d 1225, 1230-1231 (1

Dist. 1995) (affirming dismissal of

defamation claim where employer’s statements that employee was

“cocky” and a “con artist” were merely opinions not objectively

capable of proof or disproof and alleged no specific facts capable of

being verified as true or false).

Maag v. Illinois Coalition for Jobs, Growth and Prosperity, 858

N.E.2d 967, 2006 Ill. App. LEXIS 1006, *15 (5

Dist. Nov. 2, 2006)

(affirming dismissal of plaintiff’s defamation claim where

defendants’ statements on a campaign flyer about plaintiff’s

performance as a judge were merely nonactionable opinion and were

“rhetorical hyperbole” or “too vague to be falsifiable.”)

4. Defamation Per Quod

If the alleged defamatory statement does not fit into one of the defamation per se

categories, the plaintiff still may be able to bring an actionable claim for defamation

per quod if the statement is either defamatory on its face (although not one of the per

se categories) or defamatory based on extrinsic circumstances. In either case, to

establish defamation per quod, the plaintiff will have to overcome the immeasurably

more difficult requirement of pleading and proving special damages – meaning actual

damage of a pecuniary nature, as a result of the defamatory statement.

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Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 104 (1996)

(“In any defamation per quod action, the plaintiff must plead and

prove actual damage to her reputation and pecuniary loss resulting

from the defamatory statement (‘special damages’) to recover.”).

Maag v. Illinois Coalition for Jobs, Growth and Prosperity, 858

N.E.2d 967, 2006 Ill. App. LEXIS 1006, *18 (5

Dist. Nov. 2, 2006)

(affirming dismissal of plaintiff’s defamation per quod claim where

plaintiff’s allegations of injury to reputation and humiliation and

mental anguish did not meet the heightened standard of pleading

special damages).

5. Liability of Employer and Employee

# Everyone who participates in or is involved with the publication of the

defamatory statement is responsible for the publication and is subject to

liability for defamation.

Van Horne v. Muller, 185 Ill. 2d 299, 705 N.E.2d 898 (1998) (radio

show co-host liable for defamation per se where she went along with

and repeated defamatory statements made by host of radio show).

Gibson v. Philip Morris, Inc., 292 Ill. App. 3d 267, 685 N.E.2d 638

Dist. 1997) (judgment entered against both employer and co-

workers who engaged in workplace defamation).

# For an employer to be held responsible under the doctrine of respondeat

superior for defamatory statements made by a co-worker, the plaintiff must

show that the statements fall within the scope of the alleged defamer’s

employment and that the motivation for the conduct was based in part on a

desire to further the interests of the employer.

Mazeika v. Architectural Specialty Products, Inc., 2005 U.S. Dist.

LEXIS 15531, *20 (N.D. Ill. 2005) (plaintiff failed to state a claim

against employer for defamation under the theory of respondent

superior where alleged defamatory statement by co-worker was not

employment-related, did not further the interests of employer and

where court stated that it “cannot reasonably infer that [individual

defendant] or any other employees of ASP are employed for the

purpose of harassing or making false statements concerning other

employees”).

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6. Defenses to Workplace Defamation Claims

A. Defamation Must be Alleged with Specificity

A plaintiff must plead specific facts of defamation in order to state an

actionable claim, including stating in the complaint the specific defamatory

statement made and the identities of the persons to whom the statement was

communicated.

Doherty v. Kahn, 289 Ill. App. 3d 544, 554-56, 682 N.E.2d 163, 170-

72 (1

Dist. 1997) (dismissing defamation claim with prejudice for

lack of specificity where claim was premised on conclusory

statements that plaintiff was “dishonest”).

Lykowski v. Bergman, 299 Ill. App. 3d 157, 163, 700 N.E.2d 1064,

1069 (1

Dist. 1998) (defamation claim dismissed with prejudice for

failure to recite specific defamatory words where complaint merely

alleged that defendant accused plaintiff of “certain unethical acts and

improper conduct” and where allegations that defamatory statements

were transmitted “to newspapers” and to “plaintiff’s employer” were

not sufficiently specific).

B. Truth

Truth is a defense to a defamation claim, (i.e., if a person admits that he is a

thief, calling him a thief (the truth) is not defamation). Even “substantial

truth” – when the statement’s “gist” or “sting” is true (labeling a person a

crook, criminal, felon, burglar, robber, rule-breaker) – renders a statement

non-defamatory.

Cianci v. Pettibone Corp., 298 Ill. App. 3d 419, 424, 698 N.E.2d 674,

678-679 (1

Dist. 1998) (employer’s alleged accusations that

employee stole company property were non-defamatory because

employee admitted using employer’s courier service for private use).

Harrison v. Chicago Sun-Times, Inc., 341 Ill. App. 3d 555, 563, 793

N.E.2d 760, 766 (1

Dist. 2003) (for defense of truth, defendant need

only show “that the ‘gist’ or ‘sting’ of the allegedly defamatory

material is true”). An employer should look to the allegations of the

employee’s complaint and other admissions in the pleadings to

determine if the employee has admitted the substantial truth of the

statement. In Harrison, the court supported such an analysis and held

the following:

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Where the plaintiff’s own characterization is

not substantially different from the allegedly

defamatory language, such language may be

deemed substantially true.

Id. at 563, 793 N.E.2d at 766.

Wynne v. Loyola University of Chicago, 318 Ill. App. 3d 443, 452,

741 N.E.2d 669 (1

Dist. 2000) (affirming dismissal of plaintiff

employee’s defamation claim in part because she admitted to some of

the facts contained in the allegedly defamatory memorandum that

imputed an inability to perform her job, thus rendering it

“substantially true”).

Gist v. Macon County Sheriff’s Dept., 284 Ill. App. 3d 367, 371, 671

N.E.2d 1154, 1157 (4

Dist. 1996) (affirming dismissal of defamation

claim for failure to state a claim where alleged defamatory statements

that plaintiff was a fugitive and wanted on an arrest warrant were

substantially true).

C. Innocent Construction

Even if the alleged defamatory words fall into a per se category, the claim

will not be actionable if the words are capable of an innocent construction.

The rule provides that if the statement, when considered in he context in

which it is made, may reasonably be innocently interpreted or reasonably be

interpreted as referring to someone other than the plaintiff, it cannot be

actionable per se and the defamation action must be dismissed. This is a

powerful defense for Illinois employers that is not found in many

jurisdictions. Tuite v. Corbitt, 224 Ill. 2d 490 (Dec. 21, 2006) (rejecting

plaintiff’s request to abandon the innocent construction rule and upholding

its continued use in Illinois as a legal defense to defamation claims).

Anderson v. Vanden Dorpel, 172 Ill. 2d 399, 413, 667 N.E.2d 1296,

1302 (1996) (dismissing defamation claim where supervisor’s

comments that employee failed to follow up on assignments

innocently construed to mean simply that employee’s actions did not

fit in with the employer’s standards).

Dunlap v. Alcuin Montessori School, 298 Ill. App. 3d 329, 698

N.E.2d 574 (1

Dist. 1998) (finding innocent construction of

statements: “virtually a total breakdown of trust and confidence

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between plaintiff and the Board” and “not satisfactorily performing

her duties or carrying out the policies of the Board,” which could be

innocently construed as plaintiff not performing well in this particular

job).

Quinn v. Jewel Food Stores, Inc., 276 Ill. App. 3d 861, 868, 658

N.E.2d 1225, 1232 (1

Dist. 1995) (affirming dismissal of defamation

claim with prejudice where statements that employee was “cocky,” a

“con artist” and who speaks “bullshit” capable of innocent

construction).

Rasky v. Columbia Broadcasting System, Inc., 103 Ill. App. 3d 577,

581, 431 N.E.2d 1055, 1058 (1

Dist. 1981) (alleged defamatory

words “that are capable of being read innocently must be so read and

declared nonactionable as a matter of law”).

Compare with, Gardner v. Senior Living Systems, Inc., 314 Ill. App.

3d 114, 119, 731 N.E.2d 350, 355 (1

Dist. 2000) (defamatory

statements that former employee took employer’s software, stole its

trade secrets, and unlawfully solicited employer’s clients were not

capable of innocent construction: they were intended to accuse former

employee of unauthorized control over employer’s property (a crime),

not a lack of rigor in following company procedure).

D. Opinion

Statements of opinion are not actionable as defamation. The determination

of whether a statement is a fact or opinion is a matter of law. In making this

determination, courts consider: “(1) whether the statement has a precise core

of meaning for which a consensus of understanding exists, or conversely,

whether the statement is indefinite and ambiguous; (2) whether the statement

is verifiable, i.e., capable of being objectively characterized as true or false;

(3) whether the literary context of the statement would influence the average

reader’s readiness to infer that a particular statement has factual content; and

(4) whether the broader social context or setting in which the statement

appears signals a usage as either fact or opinion.” Lifton v. Board of

Education of City of Chicago, 318 F. Supp. 2d 674, 678-79 (N.D. Ill. 2004)

(granting summary judgment for employer on defamation claim, where

statements that employee was “lazy,” “burnt out,” “unstable” and “looking

for sympathy” were opinions and “vague expressions of [employer’s]

sentiments, not statements of verifiable fact”).

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Quinn v. Jewel Food Stores, Inc., 276 Ill. App. 3d 861, 866-867, 658

N.E.2d 1225, 1230-1231 (1

Dist. 1995) (affirming dismissal with

prejudice where employer’s statements that employee was “cocky”

and a “con artist” were merely opinions not objectively capable of

proof or disproof and asserted no specific facts capable of being

verified as true or false).

Hopewell v. Vitullo, 299 Ill. App. 3d 513, 519, 701 N.E.2d 99, 104

(1st Dist. 1998) (employer’s statement that plaintiff “was fired

because of incompetence” was nonactionable opinion that had no

precise meaning and could not be verified as true or false).

Wynne v. Loyola University of Chicago, 318 Ill. App. 3d 443, 452,

741 N.E.2d 669, 676 (1

Dist. 2000) (affirming dismissal of

employee’s defamation claim where “[n]one of the words and phrases

used by [defendant] are capable of verification:” statements used to

describe employee, such as “seemed inappropriate,” “appeared to

wheedle, persuade, nag, and domineer,” “uniformly unpleasant” and

“totally repugnant” were merely expressions of opinion).

E. Privilege

Employers also may be protected as a matter of law from actionable

defamation if the statements were made pursuant to either an absolute or

qualified privilege – particularly where the statements were made in good

faith within a legitimate business context.

Layne v. Builders Plumbing Supply Co., 210 Ill. App. 3d 966, 969,

569 N.E.2d 1104, 1106 (2

Dist. 1991) (“Whether a defamatory

statement is protected by an absolute or a qualified, or conditional,

privilege is a question of law for the court.”).

Quinn v. Jewel Food Stores, Inc., 276 Ill. App. 3d 861, 871, 658

N.E.2d 1225, 1233 (1

Dist. 1995) (“In determining whether a

privilege exists, the court looks only to the occasion itself to

determine as a matter of law and general policy whether the occasion

created a recognized duty or interest that makes the communication

privileged.”).

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(i). Absolute Privilege

An absolute privilege arises when statements are made “in the course of

judicial or quasi-judicial proceedings as well as actions ‘necessarily

preliminary’ to judicial or quasi-judicial proceedings.” Layne v. Builders

Plumbing Supply Co., 210 Ill. App. 3d 966, 969, 569 N.E.2d 1104, 1106 (2d

Dist. 1991) (employer’s statements to police department that employee has

threatened, harassed and assaulted a co-worker were absolutely privileged).

Significantly, the “absolute privilege provides complete immunity from civil

action, even though the statements are made with malice . . . because public

policy favors the free and unhindered flow of such information.” Id.

Hartlep v. Torres, 324 Ill. App. 3d 817, 819-820, 756 N.E. 2d 371,

373 (1

Dist. 2001) (supervisor was absolutely privileged in making

defamatory statements about an employee during the course of the

employee’s disciplinary hearing before an administrative agency).

Golden v. Mullen, 295 Ill. App. 3d 865, 871, 693 N.E. 2d 385, 390

Dist. 1998) (absolute privilege of attorneys to make defamatory

statements related to judicial proceedings also applies to post-

litigation statements).

(ii). Qualified Privilege

More frequently, employers must rely on a qualified privilege to protect intra-

corporate communications. Under Illinois law, “[t]hree conditionally

privileged occasions are recognized: (1) situations that involve some interest

of the person who publishes the defamatory matter; (2) situations that involve

some interest of the person to whom the matter is published or of some third

person; and (3) situations that involve a recognized interest of the public.”

Cianci v. Pettibone Corp., 298 Ill. App. 3d 419, 426, 698 N.E. 2d 674, 679

Dist. 1998) (alleged defamatory statements made on a proper occasion

among small group of employees also involved in plaintiff’s use of

employer’s courier service for personal business were protected by qualified

privilege).

An employer may have a qualified privilege to make defamatory statements

about an employee if the statements: (1) are made in good faith by the

employer; (2) involve an interest or duty to uphold; (3) are limited in scope

to that purpose; (4) are made on a proper occasion; and (5) are published in

a proper manner and to proper parties only. Kuwik v. Starmark Star Market

& Admin, Inc., 156 Ill. 2d 16, 25 (1993) (finding qualified privilege existed

where defendant insurance company had an interest in transmitting letters

relating to qualifications and licensing of plaintiff physician).

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Larson v. Decatur Memorial Hospital, 236 Ill. App. 3d 796, 803-804,

602 N.E.2d 864, 870 (4

Dist. 1992) (employer’s statements that

employee used and sold drugs protected under qualified privilege

where made in good faith as part of the employer’s investigation,

even though statements ultimately proven false).

Achanzar v. Ravenswood Hospital, 326 Ill. App. 3d 944, 948-49, 762

N.E.2d 538, 543 (1

Dist. 2001) (affirming trial court’s decision that

a qualified privilege existed as a matter of law because the alleged

defamatory statement that plaintiff threatened to kill a hospital

employee was made by a coworker to a supervisor and then published

only to the human resources department charged with investigating

worker safety: “The statement was properly limited in scope and

purpose and was revealed only to proper parties.”).

(iii). Abuse of Qualified Privilege

The qualified privilege is lost when it is abused by excessive publication,

malice or reckless disregard for the truth or falsity of the statement. To

overcome the employer’s qualified privilege, an employee must allege

specific factual support indicating how the privilege was abused and may not

rely upon a bare and conclusory assertion of malice or bad faith. The plaintiff

must present evidence of a “reckless act which shows a disregard for the

defamed party’s rights, including the failure to properly investigate the truth

of the matter, limit the scope of the material, or send the material to only the

proper parties.” Kuwik v. Starmark Star Marketing & Admin. Inc., 156 Ill.

2d 16, 30 (1993).

Achanzar v. Ravenswood Hospital, 326 Ill. App. 3d 944, 948-49, 762

N.E.2d 538, 543 (1

Dist. 2001) (interpreting Kuwik and holding that

the question of whether a qualified privilege exists is a question of

law for the court, but whether the privileged has been abused is a

question of fact for the jury to decide).

Although the question of whether a privilege has been abused is a question

of fact, “the plaintiff must come forward with actual evidence creating an

issue of fact.” Vickers v. Abbott Labs., 308 Ill. App. 3d 393, 404-06, 719

N.E.2d 1101, 1110-12 (1

Dist. 1999) (employer did not abuse qualified

privilege in making statements to current and former subordinates of plaintiff

during investigation of alleged sexual harassment by plaintiff).

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Gist v. Macon County Sheriff’s Dept., 284 Ill. App. 3d 367, 374, 671

N.E.2d 1154, 1159 (4

Dist. 1996) (affirming dismissal of defamation

claim where plaintiff failed to set forth any facts showing bad faith by

the defendants in its privileged communication of defamatory

statement).

Genelco, Inc. v. Bowers, 181 Ill. App. 3d 1, 7-9, 536 N.E.2d 783,

786-788 (1

Dist. 1989) (“bare allegations, unsupported by facts, that

the defendant acted maliciously, with knowledge of the falsity or with

wanton disregard for the rights of others . . . are not sufficient to

negate the good faith of the defendant who is protected by a qualified

privilege”).

Izadifar v. Loyola University, 2005 U.S. Dist. LEXIS 13602, *20-21

(N.D. Ill. 2005) (plaintiff failed to come forward with actual evidence

creating an issue of fact as to whether employer abused its qualified

privilege by discussing plaintiff’s alleged misconduct with her former

co-employees, including subordinates, or by conducting an

investigation that did not conform strictly to the University’s bylaws

– plaintiff made no showing that the investigation was conducted in

reckless disregard of her rights).

Compare with, Welch v. Chicago Tribune Co., 34 Ill. App. 3d 1046,

1051, 340 N.E.2d 539, 543 (1

Dist. 1975) (employer did not have

privilege to communicate defamatory statement that employee was

terminated for “alcoholism, inefficiency, lack of punctuality and

unreliability” to all employees in company including those outside of

terminated employee’s department).

F. No Publication of Defamatory Statement

To have an actionable claim for defamation, an employee must establish that

the defamatory statement was published to another person. Often times,

publication is not in dispute. However, in some jurisdictions, an employer

may have a defense that the publication element has not been met if the

statement was only communicated internally within a company or

organization.

This is known as the “nonpublication rule.” Under the nonpublication rule,

communication among employees of the same organization is not publication

for defamation purposes because it is the equivalent of the corporation

“communicating with itself.” If available, this defense would immediately

extinguish many workplace defamation claims that are based solely on

internal intra-corporate communications.

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States recognizing the nonpublication rule. The nonpublication

rule has been found as a valid defense to a claim of intra-corporate

defamation in Alabama, Georgia, Louisiana, Missouri, Oklahoma,

South Carolina, Tennessee, Washington and Wisconsin. See e.g.,

Dixon v. Economy Co., 477 So. 2d 353, 354 (Ala. 1985); Williams

v. A.L. Williams & Assocs., Inc., 555 So. 2d 121, 124 (Ala. 1989);

Williams v. Cook, 386 S.E. 2d 665, 666 (Ga. App. 1989); Agee v.

Huggins, 888 F. Supp. 1573, 1580 (N.D. Ga. 1995); Cangelosi v.

Schwegmann Bros. Giant Super Markets, 390 So. 2d 196, 198 (La.

1980); Noel v. Andrus, 810 F.2d 1388, 139. (5

Cir. 1987) (applying

Louisiana law); Lovelace v. Long John Silver’s, Inc., 841 S.W. 2d

682, 684 (Mo. App. 1992); Magnolia Petroleum Co. v. Davison, 148

P.2d 468,471 (Okla. 1944); Starr v. Pearle Vision, Inc., 54 F.3d 1548,

1553 (10

Cir. 1995) (applying Oklahoma law); W.U. Tel. Co. v.

Lesesne, 198 F.2d 154, 156-57 (4

Cir. 1952) (applying South

Carolina law); Payne v. FMC Corp., 1991 U.S. Dist. LEXIS 15499,

*19 (D.S.C. 1991); Woods v. Helmi, 758 S.W. 2d 219, 223 (Tenn.

Ct. App. 1988); Prins v. Holland-North America Mortgage Co., 181

P. 680, 681 (Wash. 1919); Flynn v. Reinke, 225 N.W. 742, 744 (Wis.

1929); Halsell v. Kimberly-Clark Corp., 683 F.2d 285, 288-89 (8

Cir. 1982) (applying Wisconsin law).

States not recognizing the nonpublication rule. Courts in many

other states find that the nonpublication rule provides too much

blanket protection to employers and that communications among co-

employees constitute publication for purposes of defamation claims.

Illinois rejects the nonpublication rule and again recently held that

“state and federal courts in Illinois -- in addition to numerous other

authorities -- recognize that communication within a corporate

environment may constitute publication for defamation purposes.”

Popko v. Continental Casualty Co., 355 Ill. App. 3d 257, 823 N.E.2d

184 (1

Dist. 2005); Gibson v. Philip Morris, Inc., 292 Ill. App. 3d

267, 275, 685 N.E.2d 638, 644 (1997) (rejecting the nonpublication

rule and stating “there is no statement of law in Illinois that corporate

internal communications are not publications”). Other states that

have specifically declined to adopt the nonpublication rule include

California, Connecticut, Florida, Kansas, Massachusetts, Michigan,

New Mexico, New York and Texas.

7. Damages

Workplace defamation claims can present significant exposure for employers of all

sizes because there are no caps or limits on damage awards (unlike discrimination

claims), they present the threat of punitive damages against the employer and can be

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brought against any size employer or even an individual employee. Moreover, in

most workplace defamation actions, successful plaintiffs need not make any showing

of an actual injury to their reputations.

# No Showing of Actual Injury or Damages Required

For defamation per se claims, the plaintiff need not plead or prove

actual damages because damage to the plaintiff’s reputation is

presumed. Van Horne v. Muller, 185 Ill. 2d 299, 307 (1998)

(“Certain limited categories of defamatory statements are deemed

actionable per se because they are so obviously and materially

harmful to the plaintiff that injury to the plaintiff’s reputation may be

presumed. A plaintiff need not plead or prove actual damage to their

reputation to recover for a statement that is actionable per se”).

In Illinois, presumed damages in defamation actions are damages for

economic loss (“special damages”), damages for mental suffering,

personal humiliation, and impairment of personal and professional

reputation and standing in the community. Gibson v. Philip Morris,

Inc., 292 Ill. App. 3d 267, 685 N.E.2d 638 (5

Dist. 1997) (plaintiff

prevailed on his workplace defamation claim against employer and

co-workers and was awarded $115,000 in lost wages and benefits,

$100,000 for personal humiliation, mental anguish and suffering and

another $1,000,000 for punitive damages at bench trial).

# Actual Showing of Damages Required for Defamation Per Quod

“If a defamatory statement does not fall within one of the limited

categories of statements that are actionable per se, the plaintiff must

plead and prove that she sustained actual damage of a pecuniary

nature (“special damages”) to recover. Bryson v. News America

Publications, Inc., 174 Ill. 2d 77, 87-88 (1996).

“General allegations such as damage to one’s health or reputation,

economic loss, and emotional distress are insufficient to state a cause

of action for defamation per quod.” Salamone v. Hollinger Int’l, Inc.,

347 Ill. App. 3d 837, 842, 807 N.E.2d 1086, 1092 (1

Dist. 2004)

(affirming dismissal of plaintiff’s defamation per quod claim because

plaintiff failed to allege with particularity which members of the

community stopped associating with him and patronizing his store

and also failed to allege an actual monetary loss from a lack of

business).

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Anderson v. Vanden Dorpel, 172 Ill. 2d 399, 416-17 (1996) (vague

allegations that plaintiff “has been damaged monetarily by losing

gainful employment and wages” and that she “suffered great mental

pain and aguish” are not sufficient to plead special damages for a

claim of defamation per quod).

8. Insurance Coverage of Workplace Defamation Claims

Many employers are finding that their commercial liability insurance and umbrella

policies may exclude certain acts from coverage, including specifically enumerated

employment-related practices exclusions. Many times the question of whether or not

the insurance company will cover a claim by a current or former employee for

defamation turns on the context in which the statement was made.

# Whether or not workplace defamation claims fall under an insurance

policy’s employment-related practices exclusion may further depend

on when the defamatory statements were made and whether they

relate to the employee’s performance or employment. Under some

circumstances, post-termination acts of defamation can reasonably

arise directly and proximately from the termination and fall within the

employment-related practices exclusion.

Adams v. Pro Sources, Inc., 231 F. Supp. 2d 499, 505 (M.D. La.

2002) (claim that employer defamed former employee in an online

database in the trucking industry in retaliation for employee’s

complaint of hostile work environment was covered by employment-

related practices exclusion and therefore excluded from coverage).

Low v. Golden Eagle Insurance Co., 104 Cal. App. 4

306, 315, 128

Cal. Rptr. 2d 423, 429 (2002) (statement by insured’s president on

radio program that a supervisor had been accused of sexual

harassment qualified as employment-related and insurer therefore had

no duty to defend under employment-related practices exclusion of

policy).

Compare with, American Alliance Insurance Co. v. 1212 Restaurant

Group, L.L.C., 342 Ill. App. 3d 500, 794 N.E.2d 892 (1

Dist. 2003)

(insurance company had duty to defend employer on claim of

defamation per se brought by former employee where some of the

alleged defamatory statements were personal insults and lewd

comments and not related to employee’s employment or termination,

and therefore did not fall under the employment-related practices

exclusion of employer’s insurance policy which excluded

employment-related defamation claims from coverage).

-15-

# If the defamatory statement was made in the conduct of the insured’s

business or profession, coverage may also be denied under an

applicable professional services exclusion.

Hurst-Rosche Engineers, Inc. v. Commercial Union Insurance Co., 51

F.3d 1336, 1344 (7

Cir. 1995) (insurance companies were not

required to defend or indemnify insured engineering firm in

defamation lawsuit even though insurance policy specifically covered

defamation claims, where defamatory letter imputing lack of ability

on the part of general contractor in construction project was cast as

injury resulting from engineering firm’s review of contractor’s work

and falling within the policy’s professional services exclusion).