Reason for Firing Doesn't Have to Be Secret

Q: "My company recently discovered that a well-liked employee had been embezzling money from us for some time. We terminated him immediately and contacted the police to press charges. But we didn't tell the other employees why he was let go because we didn't want to do anything to jeopardize our investigation or the possibility of prosecution. However, now we're seeing a drop in morale because the other employees can only speculate as to why he was fired without warning. We want to tell them what happened, but we don't want to give the guy a defamation claim against us. What can we do?"

First off, always remember that truth is an absolute defense against a defamation claim. In other words, as long as what you say is true, there is no defamation liability, regardless of how bad it makes the other person look. If your former employee brings a claim for defamation because you tell the other employees about his theft, as long as there is enough evidence that a reasonable person could conclude he stole from the company, you're entitled to the qualified privilege and the case will likely be decided on motions long before it goes to trial.

This article appeared in the December 20, 2007 issue of the Daily Journal of Commerce- Portland, OR.