Employers spend a lot of time worrying about anti-discrimination and wage and hour laws, and rightfully so. Employment discrimination and wage claims remain the biggest exposure for employers.
However, as Walmart recently found out, defamation claims can be costly.
Jesus “Jesse” Fonseca, a former truck driver, was just awarded $34.7 million by a California jury. The jury found that Walmart defamed Fonseca by falsely accusing him of fraud and terminating his employment following an on-the-job injury and subsequent workers’ compensation claim.
Fonseca received $9.7 million in compensatory damages for lost wages, benefits, and emotional distress, and $25 million in punitive damages.
Here are five tips to help employers avoid defamation claims.
1️⃣ The Neutral Reference
When discussing a former employee with a potential new employer, just provide dates of employment and last job title held.
2️⃣ The Truth Will Set You Free
If you must make statements about an employee, make sure they’re truthful. Truth is an complete defense to defamation.
3️⃣ Limit Public Statements
Avoid making public or internal statements about employees that could harm their reputation unless they are factual and supported by evidence. Share sensitive information only with individuals who have a legitimate need to know (e.g., HR personnel, legal advisors).
4️⃣ Conduct Thorough Investigations
Before making allegations or taking action, ensure you have conducted a fair and comprehensive investigation. Document findings meticulously. Give the employee an opportunity to respond to claims to ensure fairness and accuracy.
5️⃣ Use Caution in Termination Processes
When terminating an employee, refrain from using terms like “fraud,” “dishonest,” or similar accusations unless supported by indisputable evidence. If a termination is due to a policy violation, explain the action neutrally without labeling the employee’s conduct as criminal or unethical.