Defamation in workplace occurs in US employment, when a false allegation capable of damaging the reputation or career of a former or current employee is made by the employer or any co worker or any body else in the venue of work.
Defamation can be oral (slander) and written (libel).
In case of statements those are 'defamation per see' or patently or on face of it defamatory, harm need not actually occur to the target, in order to institute legal action. Examples of such outrageously defamatory statements, related to workplace or employment, are false accusations of serious criminal misbehavior like theft or pilferage or sexual misconduct.
When the employer negligently or willingly fails to remove defamatory matters appearing on his premised concerning a present or past employee, he is guilty of 'defamation by neglect' for its continued display.
An employer may also become liable for 'defamation by conduct', when his actions cast stigma or reflect on the character of a staff negatively without any just or lawful cause. For instance, termination of an employee on suspicion in the midst of incomplete investigation of a theft case amounts to 'defamation by conduct', particularly when he turns out to be innocent.
Former employers of a job applicant, who give false negative references to his prospective employers in employment background checks, may face defamation lawsuits on that count.
Employers are becoming increasingly reluctant to give out references. Due to this reluctance, prospective employers are not able to make hiring decisions based upon complete information or cannot hire the person best suited to the position, and face exposure to liability for negligent hiring. Liable employers have recently begun to sue former employers for "negligent referral," on the ground that the former employer should have disclosed adverse information, if any.
In addition, employers that decline to give references may still be liable for defamation based upon the theory of compelled self-publication.
No claim of defamation shall lie for any true and fair statement that is not misleading.
Defamation laws are state specific and vary across jurisdictions.
In many states or jurisdictions, employers enjoy a qualified privilege that allows them to give even defamatory references, in good faith for legitimate business purpose on appropriate occasion to concerned persons or audience.
In some states, like Florida employers enjoy a degree of immunity from lawsuits for providing reference information, since the statutory presumption is that the employer is acting in good faith. So, the burden of proving that the statement furnished is "knowingly false or deliberately misleading," for a malicious purpose, or in violation of the state anti-discrimination laws, is on the aggrieved employee who complains of the same.
Many state laws protect former employers from liability for giving true and fair view of the job performance and reasons for termination of a past employee. Consequently, if a background-check agency is apprised of the poor job performance of a candidate that is not defamatory, especially where there are witnesses or documentation to corroborate it.
To be on the safe side, many employers prefer to reveal nothing more than joining and leaving dates, designation or salary information. Though this may reduce the chances of exposure to defamation lawsuits, yet its impact on business is not positive.
Since consent is a complete defense to a case of defamation, many former employers give references only at the written request or authorization of the concerned employee.