Say What?
Say What? | Human Resource Executive Online
In this age of privacy laws, employers must be careful when disclosing employee information. Employers who say too much often face costly lawsuits. However, employers who say too little may face legal repercussions as well.
By Keisha-Ann G. Gray
To help you avoid both unpleasant and expensive circumstances, November's column is devoted to questions regarding tricky, yet common privacy matters.
Question: I am aware of a former employee who is a thief and is now working for someone else. Would the company put itself in legal jeopardy if the new company was informed about the person's past theft? The case was settled out of court.
Answer: It depends.
Potential Breach of Contract Claims: First off, prior to disclosing any information, you must examine the settlement agreement that resolved your employee's theft incident because a settlement agreement is a contract.
Moreover, many settlement agreements have confidentiality provisions that require parties not to disclose any information regarding the settled incident. Other times, settlement agreements set forth precisely what you can and cannot say about the settled incident.
If the settlement agreement has such a confidentiality provision, disclosing the employee's theft to the new employer will place the company at risk for a breach of contract claim.
Potential Defamation Claims: Even if there is no confidentiality agreement, disclosing the theft to the new employer may open the door for a defamation suit against the company and yourself by the former employee.
Suits for defamation are among the most common threats that employers face when giving a negative job reference. An employee can establish a common law claim of defamation by showing that the employer communicated a false and defamatory statement of fact regarding the employee to a third party, which caused injury to the employee's reputation.
While truth is an absolute defense to a defamation claim and an employer cannot be held liable for defamation if that employer is telling the truth about the former employee, proving that the information an employer reported about a former employee was truthful can be a difficult, fact-intensive struggle that requires great expenditures in terms of money and time.
Consent is another absolute defense to a defamation claim. Therefore, if an employer obtains adequate consent from an employee before issuing a reference to a new employer, courts will usually dismiss the employee's defamation suit.
Common law recognizes a qualified privilege for statements made by one person to another on a subject in which both have an interest, or statements made pursuant to a duty. This qualified privilege applies to an employer's statements regarding a former employee to a prospective employer.
But, the privilege can be lost if the employee demonstrates that the employer acted with malice, meaning out of spite or ill will, or with a high degree of awareness of the statement's probable falsity. Again, a former employee can raise an issue of fact as to whether an employer acted with malice, which can lead to a long, drawn-out litigation.
Many states have also enacted statutes that give employers immunity from liability when they give references in good faith. However, the majority of these statutes protect only those employers who provide references upon request.
For example, the New Mexico statute states, "When requested to provide a reference on a former or current employee, an employer acting in good faith is immune from liability for comments about the former employee's job performance." N.M. Stat. Ann. § 50-12-1.
In states such as Arizona, Arkansas, Missouri, California, Illinois, South Carolina, Utah and Virginia, an employer only enjoys statutory immunity when providing a reference in response to a request for one.
The bottom line regarding defamation suits is that if you tell the truth about your former employee, you will ultimately not be held liable for defamation, but you may have to spend time and money litigating if you do not obtain the employee's consent because defamation suits often involve factual inquiries, and, in most states, you will not be immune from suit if you offer a negative reference without having first been asked for a reference by the employee or the new employer.
Potential Tortious Interference with Contract Claims: Telling the new employer about your former employee's theft may also subject your company to a claim for tortious interference with a contract.
The claim of tortious interference with a contract or business relationship typically extends liability to "[o]ne who intentionally and improperly interferes with the performance of a contract ... between another and a third person by inducing or otherwise causing the third person not to perform the contract." Restatement (Second) of Torts § 766 (1977).
While truth is an absolute defense in defamation lawsuits, courts are split as to whether truth is a defense to tortious interference with contractual relations suits. Compare Worldwide Primates, Inc. v. McGreal, 26 F.3d 1089, 1092 (11th Cir. 1994) (holding truth is a defense to interference claim), with Carman v. Entner, No. 13978, 1994 WL 28633, at *7 (Ohio Ct. App. Feb. 2, 1994) (holding that "where there is no need to interfere with a contract to protect a genuine legal right, even truthful statements, calculated to interfere with the contract, are actionable"); andCollincini v. Honeywell, Inc., 601 A.2d 292, 296 (Pa. Super. Ct. 1991); andPratt v. Prodata, Inc., 885 P.2d 786, 790 (Utah 1994); see generally Alex B. Long, Tortious Interference with Business Relations: "The Other White Meat" of Employment Law, 84 Minn. L. Rev. 863, 898-913 (2000) ("Interestingly, several of the cases to reject the argument that truth is a defense to an interference claim do so in the context of a former employer providing unrequested, truthful information to an employee's current employer, which damages the employee's relationship with that employer.").
Therefore, depending on your state, the former employee may be able to bring a tortious interference with a contract claim against you for telling a current employer a true fact about the former employee that results in damaging that employee's new business relations.
Potential Claims for Failing to Report the Former Theft: On the flip side, if the former employer gave a favorable reference but failed to disclose certain negative information about a former employee, the new employer may have an actionable claim against the former employer for negligent referral and misrepresentation.
Although courts generally hold that a former employer has no duty to disclose negative information about a former employee to a new employer, see Moore v. St. Joseph Nursing Home, Inc., 459 N.W.2d 100, 102 (Mich. 1990), some courts have carved out exceptions to the "no duty to disclose" rule.
These courts hold that, when an employer provides a favorable reference for an employee, but fails to reveal negative information, that employer can be held liable for negligent misrepresentation if the employee harms a third party, even though no special relationship existed between the former employer and the injured third parties. See Randi W. v. Muroc Joint Unified School District, 929 P.2d 582, 592 (Cal. 1997); Gutzan v. Altair Airlines, Inc., 766 F.2d 135 (3d Cir. 1985).
Generally, however, courts hold that such a duty arises when misrepresentations cause physical harm. See Restatement (Second) of Torts, § 310-11 (1977); but see Francioni v. Rault, 518 So.2d 1175 (La. Ct. App. 1988) (former employer that verified employee's employment information but did not mention embezzlement was not liable for employee's later murder because there was no "ease of association" between employer's duty and the death in this case).
Recently, the 5th Circuit Court of Appeals, applying Louisiana law, held that, while employers have no duty to disclose negative information about an employee, any reference provided about that employee must not misrepresent the employee's work history. SeeKadlec Medical Center v. Lakeview Anesthesia Associates, 527 F.3d 412 (5th Cir. May, 8, 2008).
Therefore, before disclosing any information about the former employee, consult with the terms of the settlement agreement. If no confidentiality provision exists, and you wish to provide information about the theft, make certain that it is accurate and completely truthful. Also, it is advisable not to volunteer information -- only provide it if it is requested. Finally, if you are asked to supply a letter of reference, make sure that you relate the former employee's work history in a factually accurate manner.
Question: Is information about leave taken by an employee under the Family and Medical Leave Act confidential? Our company posts a schedule that includes all employees' FMLA leave times.
Answer: It is illegal for your company to post any medical information regarding employee FMLA leave. However, merely posting the names of people who have taken FMLA leave and the dates they have been absent is not illegal under the FMLA, but, doing so may nonetheless cause an employee to bring a claim for invasion of privacy under state law.
Medical information regarding an employee's FMLA leave is confidential. The FMLA regulations require that an employer keep confidential "records and documents relating to medical certifications, recertifications or medical histories of employees or employees' family members, created for the purposes of FMLA." 29 C.F.R. § 825.500(g) (1995).
The fact that an individual took FMLA leave and the duration of that leave, however, is not confidential. See Batt v. Kimberly-Clark Corp., No. 05-CV-0421, 2006 WL 1623657, at *4 (N.D. Okla. June 6, 2006) (holding an employer can answer a discovery request for employees who have filed for leave under the FMLA without violating confidentiality requirements, so long as the employer redacts any information about the employee's medical condition).
Therefore, posting the names of individuals who take FMLA leave and the number of days taken is not a violation of the FMLA. However, doing so may give rise to a state law claim of invasion of privacy in states that recognize such causes of action pursuant to common law or statute.
In particular, an employee may bring a claim for unreasonable publicity to a person's private life in instances where the company posts FMLA leave schedules. See Restatement (Second) Torts § 652D. The success of such a lawsuit would depend on whether a court finds posting the dates of an employee's FMLA leave to be highly offensive to a reasonable person and whether posting the information constitutes publicity.
Alternatively, an employee could bring a claim of unreasonable intrusion of seclusion, which would also require the employee to show that the information posted is highly offensive to a reasonable person. See id. at § 652B.
An employee may be able to articulate a good argument that posting FMLA-leave time is highly offensive because FMLA leave implicates the employee is dealing with a private medical matter, and that posting the information in the workplace constitutes publicity because it is shared with everyone in the workplace, such that it is substantially certain to become public knowledge.
Because information relating to an employee's FMLA leave is usually seen by the individual as personal and private, and because posting an employee's FMLA-leave schedule may be offensive to certain employees, to be on the safe side, companies should err on the side of keeping all information related to FMLA leave confidential and private whenever possible.
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November 3, 2008 Copyright 2008© LRP Publications
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