Defamation claim against H.R. manager dismissed

As noted before on this blog (click here), discharged employees in Kentucky are more actively pursuing defamation claims against employers and employer representatives. Last week in Hodges v. Ford Motor Company and Halverson (click here:  Download Hodges0306.pdf), Judge Heyburn (W.D.Ky.) dismissed such a claim. Note that the alleged defamatory words were an H.R. manager’s statement to the discharged employee of the reasons for his termination. The statements were made to the employee during a closed door meeting in the presence of another Ford supervisor.

Lessons Learned: (1) Conduct termination meetings in a closed door environment. (2) If a witness is to be present at the termination meeting, select a witness with some legitimate, business need to know the reasons for termination and/or to be present at the meeting. (3) Be able to articulate concrete facts that support the allegations made against the employee. (4) Be able to articulate the reasonable steps the Company took to investigate the allegations against the employee, and in particular, be able to state that the Company investigated sources that would have refuted the allegations against the employee, i.e. be able to prove the Company did not conduct a one-sided investigation.

Background: Hodges was a manager at Ford's truck plant in Louisville. Halverson is the H.R. Manager at the plant. In late 2003 and early 2004, Halverson conducted an audit and investigation regarding whether Hodges had violated certain Ford policies.  Halverson concluded that Hodges had violated the policies.  On April 24, 2004, Halverson called Hodges into a meeting in a private office, with the door closed.  Chuck Hoffman was also present at the meeting.  Hoffman was Ford's Salaried Personnel Supervisor. During the meeting, Halverson notified Hodges that he was being fired and stated the reasons why.  After being terminated, Hodges brought suit against Ford and Halverson claiming that Halverson's statements in the termination meeting, which were made in the presence of Hoffman, were defamatory. Judge Heyburn dismissed the case on the grounds that the statements were protected by the qualified privilege which protects statements “made in good faith, without malice, by one who believes he has a duty or an interest to a person with a corresponding duty or interest.”

Opinion Summary: The opinion is well worth reading in full. Judge Heyburn conducted a crisp, yet thorough, analysis of the facts in light of applicable law. First, Judge Heyburn acknowledged that, “Kentucky courts have held that the privilege protects defamatory statements made within a company if those statements concern the conduct of employees.” “In this case,” the Court stated, “the statements were internal communications between two Ford employees concerning an employee’s violation of ethical rules. Therefore, as a general matter, Halverston’s statements about Hodge’s conduct seem to fall within the qualified privilege.”

The Court noted, however, that the qualified privilege can be lost. Hodges argued the privilege was lost in this case for several reasons. First, Hodges argued that Hoffman had no reason or need to learn of the reasons for Hodges’ termination. The Court rejected this argument, finding that Hoffman had a job duty to ensure the reasons for termination and the process used during the termination complied with Ford’s policies and procedures. Second, Hodges argued that Halverston acted with malice, i.e. knowledge that the statements were false or in reckless disregard of whether they were false. The Court also rejected this claim, holding that a reasonable investigation had been performed which gave Halverston substantial factual support for the truth of his statements. The Court also held that Halverston had not failed to adequately investigate sources that would have cleared Hodges. To the contrary, the Court found that Halverston had given Hodges ample opportunities to explain himself and had conducted a “thorough and complete” investigation.

Conclusion: While this decision was in Ford’s favor, Judge Heyburn may have reached a different result had the H.R. Manager not conducted a thorough, “two-sided” investigation, or if the third party witness did not have a legitimate reason for being present at the termination meeting.