Mass Emailing Can Expose Employers to Defamation Liability

On February 11, 2016, a federal district court in New York allowed a former executive to proceed with his defamation lawsuit against the company that terminated him. (McCusker v. Hibu PLC (E.D.N.Y. 2/11/16) 2016 WL 538472.)

This lawsuit was spurred by the company’s circulation of a mass email informing all current employees, beyond senior management, of the reasons for the termination. Although not binding precedent in California, the federal court’s reasoning is significant given similar principles for defamation claims under California law. This case illustrates the pitfalls of mass emails: the privilege protecting employer-employee communications can be lost by excessive publication, including when employees republish such communications to uninterested third parties on social media, thereby exposing the employer to potential liability. Until his termination in 2013, McCusker was a former President and CEO of the defendant company, where he had worked since 1989.  McCusker claims he was terminated after voicing dissent to strategies for changing the company’s direction away from traditional print telephone directories and toward digital services.  On the day of McCusker’s termination, a CEO of the company sent an email to nearly 5,000 of its employees stating that McCusker had been dismissed “following a thorough investigation into [his] conduct … that the Company considered to be disloyal” and that the company was “considering what further action to take, including legal proceedings.”  Employees republished the email on various online forums and blogs. McCusker sued claiming he was defamed by the mass email and the employees’ republications. The court denied the company’s motion to dismiss the claim and allowed the litigation to proceed.  The company’s defenses that the email was protected by privilege based on common interests shared between sender and recipient, and that the statements in the email were matters of opinion not subject to defamation liability, were not persuasive.  Although the email appeared to be a communication within the company regarding an employee’s discipline and termination, a question of fact remained whether the company abused that privilege by sending the email to thousands of employees “some of whom then republished it on the Internet.” Although statements of opinion generally cannot be defamatory, a reasonable person who received the email could interpret its statements to suggest some illegal or corrupt behavior on McCusker’s part. California too recognizes a privilege protecting against defamation claims when the communication is between persons who share a common employment interest in the statement. (See Civil Code § 47 (c).)  As in McCusker, a California employer can abuse this privilege by excessive publication. While an employer may share a common interest with its employees about work policy violations that led to a termination, a large number of employee recipients and their viral republication of such communications – a practice more difficult for employers to manage as the number of email recipients increases – may lead to a finding of excessive publication that supports a defamation claim against the employer.

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