Can a Negative Employment Reference be Defamation?

I recently completed Chapter 18 of my forthcoming book The Law of Work, called “Tort Law and Work“.  Torts are usually treated as peripheral in texts on work law.  There is reference to torts here and there in the context of explaining wrongful dismissal law remedies, and the court’s creative use of torts to restrain strikes and picketing is explored in the study of industrial conflict.  However, rarely is tort law studied as a distinct subject area.  I thought I would di that, since torts still play an important role in regulating work conflicts.  In my book, I explore the application of the following torts to work-related disputes in the Common Law part of the book:

• Deceit
• Fraudulent Misrepresentation
• Negligent Misrepresentation
• Intentional Infliction of Mental Suffering and Nervous Shock
• Assault and Battery
• Intimidation
• Defamation
• Inducing Breach of Contract
• Intrusion Upon Seclusion
• Negligence

The so-called ‘economic torts’ that courts developed to restrain collective worker action is also dealt with in the collective bargaining part of the book.  That’s a lot of tort law.
Defamation and the Employment Reference
A recent case from British Columbia demonstrates some issues in the application of the tort of defamation to the employment relationship.  In Mejia v. LaSalle College, the employer and the employee sued each other for defamation.  Mejia was terminated for cause for violating an employer code of conduct, and he sued the employer for wrongful

dismissal and defamation. The defamation claim was based on statements to students that Mejia had been terminated for cause, and on comments made by the employer to a prospective employer of Mejia after the termination.  The employer had informed the prospective employer that although Mejia was a competent teacher, he had personality problems, was not a team player, and may not be of sound mind.  Mejia did not get the new job.  The issue raised by the case is to what extent can an employer express a negative opinion about an ex-employee in a job reference.
The tort of defamation requires the plaintiff to establish the following elements:

1. That X made comments about Y that would tend to lower Y’s reputation in the eyes of a reasonable person; and
2. That the comments were communicated to at least one person (other than Y).
   

Those elements were satisfied here.  However, courts have also developed some defences to defamation.  One is known is justification, which means that the comments, including the normal implications one would take from those comments, are essentially truthful.   A second defence is known as qualified privilege.  Qualified privilege rebuts the normal presumption that a defamatory comment is made maliciously.  In some circumstances, including the giving of employee references, the law seeks to encourage frank and honest assessments.  Therefore, provided that the employer is not acting with malice, it is permitted to respond to a request for a reference by giving an opinion, even if that opinion would tend to harm the employee’s reputation and their job prospects.
In the LaSalle College case, the court ruled that both of these defences applied.  Since Mejia had been terminated for cause, as confirmed by the courts, the defense of justification applied to the comments made to students.  The representative of LaSalle was stating his honest opinion of Mejia and was not acting with malice, and therefore the defense of qualified privilege protected the negative employment reference.  In another B.C. case called Hawley v. Webb, an employer was ordered to pay $50,000 in damages for defamation when it told third parties that an employee was dishonest and incompetent when the court found neither claim was supported by the evidence.
The employer in LaSalle College counter-claimed against Mejia for defamation.  Mejia has took up in front of the College wearing a sandwich board, which read: “Teacher fired for asking [employer] to stop breaking the law”.   That comment was defamatory because it asserted that the College was breaking the law.  The defence of justification did not apply, since the allegation was in fact false.  The Court ruled that the employer had not broken the law in the manner in which Mejia was fired.  Rather, the employee was fired for cause for violating a Code of Conduct.  The Court ordered Mejia to pay the employer $1500 in damages for defamation.
Issues for Discussion
1.    An employer states in a reference that the employee stole money, honestly believing that to be the case.  However, at trial months later, the judge finds that the theft did not occur.  Do you think that the defence of qualified privilege should protect the employer’s right to state its honest belief that the theft occurred?  
2.   Given the risks of a defamation lawsuit associated with giving a negative reference for an ex-employee, would you advise employers to decline to give references altogether?   Do you foresee any legal problems associated with taking such a position?