DAMAGE CONTROL: POTENTIAL LIABILITY IN COLORADO RELATED TO WORKPLACE INFORMATION I. DEFAMATION Each year, employers in Colorado are faced with an increasing number of defamation claims in employment lawsuits. Whether the claim originates from a bad reference or an individual who believes he was improperly accused of sexual harassment, employers must be sensitive to the risk of statements made inside and outside the workplace. This risk is magnified by the fact that individual employees can expose the company to liability for their oral and written statements. Knowledge of the following information will help employers to prevent and defend against claims for libel or slander. A. Reasons for Defamation Claims. 1. Big damages, including punitives. 2. Likely to get to the jury. Defamation involves several factual issues that make it difficult for defendants to get summary judgment. 3. Opportunity to present inflammatory and prejudicial evidence to the jury. a. Cause. In most cases, truth is an affirmative defense, which the defendant must prove. Thus, if the defamation involved a termination for wrongdoing, the defendant is placed in the position of having to prove that the employee engaged in wrongdoing. b. Malice. When the employer claims a qualified privilege (e.g., to tell other employees the reasons for a termination), the employee needs to prove that the employer's statement was made for some other purpose. Thus, the employee often gets to put on evidence about how much the employer hated him and was mean to him. c. How rich your company is. This may be relevant to punitive damages. d. How much you ruined his life. 4. Personal liability. An angry employee can go after his supervisor's house, car, bank account, make the supervisor spend money on defense, and hurt the supervisor's career -- revenge. B. Danger Zones for Defamation in the Employment Context.

1. Evaluations. Keep them confidential. 2. Investigations. a. Statements to witnesses. Often, in the course of interviewing witnesses to an incident, the interviewer conveys facts and beliefs about facts to the witness. b. Results and conclusions. Conclusions from an investigation are often conveyed to several people. 3. Terminations. Often, when an employer terminates an employee, the reasons for the termination are conveyed to several people. This is especially dangerous when the termination involves disloyalty, stealing or dishonesty, or sexual harassment. 4. References. These often include reviews of the employee's performance and the reasons for termination. Note: Liability other than defamation. X, who used to work for Company Y, applied for a job with Company Z. Company Y told Company Z that X had filed a discrimination charge against Company Y. Company Y held liable for retaliation, a civil rights violation. Robinson v. Shell Oil (U.S. 1997); EEOC v. Metzger, (D.D.C. 1993). 5. The rumor mill. Any statement made in any of these contexts may be (and is likely to be) repeated. The original speaker can be held liable for such repetition. So can anyone who passes on the rumor. C. The Elements of Defamation. 1. Strict liability: the simple case. a. You said it; b. Someone heard it (other than the plaintiff); c. It hurt the plaintiff's reputation. 2. Understanding the elements of the simple case. a. Statement was published. "Publication" requires that the statement was: (1) communicated (written, spoken, etc.); and

(2) understood by a third person. Note: Publication does not need to be in a book, newspaper, memo, or any other written form. b. With intent. The publication must be made: (1) intentionally (speaker intended to communicate to listener); or (2) negligently (listener overheard speaker as result of lack of care). The lesson: Take precautions to ensure that unintended persons cannot hear or read your communications. Note: This intent requirement is extremely limited. There is no requirement that the speaker intended to (a) refer to plaintiff; (b) convey false meaning; or (c) convey defamatory meaning. c. Who counts as "you"? (1) Employers may be held liable for statements by their employees if they are made in the scope of their duties or with apparent authority. The lesson: Tell your employees (in writing) to keep quiet about topics with defamatory potential. Train them to be sensitive to the danger zones. (2) Employees may be held personally liable for defamation. If the plaintiff wins against several defendants, he may be able to collect the award from whichever defendant he chooses. Thus, an individual defendant may (a) be forced to spend

significant time and money on his defense; (b) lose his house, car, or bank accounts; (c) have his career impaired. d. The statement hurt the plaintiff's reputation. (1) The statement was about the plaintiff (or could be interpreted as being about the plaintiff); and (2) It was defamatory. A statement is defamatory if it tends to harm a person's reputation by lowering the person's reputation in the estimation of the community or deterring others from associating or dealing with the person. There are two ways to prove that a statement is defamatory: (a) The hard way ("per quod")--Plaintiff needs to prove all of the elements of the definition (above); or (b) The easy way ("per se") (most employment cases)-A statement is defamatory as a matter of law if it imputes: i) lack of professional competence; ii) criminal conduct; iii) loathsome disease; or iv) unchastity

(female). Cinquanta v. Burdett, 388 P.2d 779 (Colo. 1963). (3) A statement of opinion is not actionable as defamation. However, (4) A statement is not opinion if it is susceptible to proof of truth or falsity. Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S. Ct. 2695, 2707 (1990); Bucher v. Roberts, 595 P.2d 239, 241 (Colo. 1979); and (5) Even an opinion can be defamatory if (a) the language is defamatory; and (b) it is based upon undisclosed facts. Burns v. McGraw-Hill Broadcasting Co., Inc., 659 P.2d 1351 (Colo. 1983). The lesson: Only make assertions based upon facts you can prove. (6) Innuendo and insinuation. Look at meaning of statement as a whole--meaning that an average person would place upon it. Morley v. Post Printing & Pub. Co., 268 P. 540 (Colo. 1928); CJI-Civ.3d 22:9, 22:10. But: Where the defendant shows substantial truth, see below, there can be no defamation by innuendo. Pietrafeso v. D.P.I., Inc., 757 P.2d 1113 (Colo. App. 1988). The lesson: Speak carefully; e.g., "We terminated him because we suspected him of theft." NOT: "We terminated him because he stole from us." 3. What is not required in a simple case:

a. Fault. As discussed above, the intent requirement is limited. The speaker does not need to intend to defame the plaintiff or speak falsely. b. Original source. One who repeats a defamatory statement by another person is liable for the repetition, even if he makes clear that he was merely repeating what someone else said. Restatement (2d) of Torts ' 578. Moreover, as discussed below, if other people repeat a speaker's words, the speaker can be held liable. However, mere transmission (e.g., by delivery of newspaper) does not give rise to liability. Restatement (2d) of Torts ' 581. c. Damages. In the simple case, where the defamation is per se, damages are presumed. 4. The non-simple case: Constitutional and other limitations on strict liability. In some cases, the concern with protecting speech, particularly speech by public figures and speech on matters of public concern, have resulted in rules that afford more protection to the speaker than the simple case. However, these will rarely apply in an employment case. 5. Special damages. If the defamation is not per se, the plaintiff must prove special damages--i.e., monetary loss. 6. Actual damages. If the plaintiff is a public figure, he must show actual damages. However, these are not limited to monetary loss, and can include impairment to reputation, personal humiliation, mental anguish, physical suffering, injury to credit, loss of income. Note: The plaintiff can use proof of special damages to prove actual damages. CJI-Civ.3d 22:2, Notes on Use. D. Defenses. 1. Substantial truth. If the statement was substantially true, the defendant wins. Colo. Const. art. II, ' 10; C.R.S. ' 13-25-125. Note: Whether a statement is true is nearly always a question of fact. Thus, the defendant can rarely get summary judgment on this defense.

Note: This defense can effectively require the employer to prove cause for discharge. Query: What do you tell an at-will employee about the reasons for termination? 2. Privilege. a. Absolute privilege. The status of this privilege is not entirely clear. If it exists, it protects the speaker irrespective of his or her motivation. (1) 1st Amendment and Petition Clause privileges. These constitutional privileges may not be absolute. They may dissolve if used for improper purpose. Compare McDonald v. Smith, 472 U.S. 479, 105 S. Ct. 2787 (1985) with Smith v. McDonald, 895 F.2d 147 (4th Cir. 1990). (2) Common law absolute privileges. These privileges include: (a) Law enforcement. Statements made to law enforcement officials for the purposes of law enforcement may be absolutely protected--even if made for the purpose of doing harm to the plaintiff. Restatement (2d) of Torts ' 587. But beware: If the charges are unfounded, the plaintiff may have an action for abuse of process or malicious prosecution. The lesson: Make sure that the charges will stick. A finding of probable cause is absolute defense to malicious prosecution. (b) Litigation (including some administrative

hearings) i) In court. Statements in court proceedings may be absolutely protected. McDonald v. Lakewood Country Club, 461 P.2d 437 (Colo. 1969). ii) Out of court. Statements made out of court in the course of litigation may be absolutely protected. Club Valencia Homeowners Ass'n, Inc. v. Valencia Association, 712 P.2d 1024 (Colo. App. 1985). iii) Nexus requirement. The statement must be reasonably connected to the litigation in order to be privileged. Unnecessary repetition of

such a statement can give rise to liability. Dorr v. C.B. Johnson, Inc., 660 P.2d 517 (Colo. App. 1983). The lesson: Do not count on being absolutely protected. b. Qualified privilege. Where the recipient of information has an interest in receiving the information, the speaker may have a privilege to convey it. However, this privilege can be lost if it is abused. (1) The most common "interest" in receiving information is the business purpose. In the employment context, this protects: (a) statements to management and coworkers about reasons for discharge, see Price v. Conoco, Inc., 748 P.2d 349 (Colo. App. 1987) (statements during performance evaluation privileged); and (b) references to future employers, see Churchey v. Adolph Coors Co., 759 P.2d 1336 (Colo. App. 1987). CJI-Civ.3d 22:16, Notes and Authorities. (2) The privilege can be abused if the statement was: (a) known to be false or made with reckless disregard of the truth;

(b) made for a non-business purpose; (c) not reasonably necessary for the business purpose; or (d) communicated to an unprivileged person. CJI-Civ.3d 22:16. Note: Abuse of the privilege is nearly always a question of fact. Thus, the defendant can rarely get summary judgment on this defense. (3) The problem with a qualified privilege is that the jury may see it as a technicality. If the plaintiff is badly injured by a defamatory statement, and you are going to a jury, be prepared to prove truth. 3. Consent. A plaintiff who consented to the communication cannot maintain a suit for defamation. However, consent will not bar a defamation suit if it was abused. a. Express or implied authorization. The defendant must show that the plaintiff expressly or impliedly consented to the communication. b. Abuse. The terms of consent control the extent to which communication is protected. The key issues are: (1) The manner of communication that was authorized, e.g., a letter of reference versus a press release. (2) The purposes of the communication. An authorization to communicate information for a specific reason or to a specific person does not imply blanket authorization. Dominguez v. Babcock, 727 P.2d 362 (Colo. 1986); Restatement (2d) of Torts '' 583 & 584. The lesson: Obtain detailed consent before giving detailed references. In the absence of such consent, stick to the basics (name, rank, and serial

number). The dilemma: The axe-murderer rapist. What do you say when you receive an inquiry about a suspected axe-murderer rapist who has not given consent? 4. Workers' Compensation Act ("WCA") preemption. The WCA preempts several tort claims, including those for intentional torts. It might preempt defamation claims as well. 5. Self-publication. Self-publication, either orally or in writing, of a defamatory statement to a third person by the person making the allegation of defamation will not give rise to a claim for libel or slander against the person who originally communicated the defamatory statement. See C.R.S. ' 13-25-125.5. However, when the originator has reason to believe that the person defamed will be under a strong compulsion to disclose the defamatory statement to a third party, the defense of self-publication may not be available. Churchey v. Adolph Coors Co., 759 P.2d 1336 (Colo. 1988). E. Damages. 1. Multiple publication. If a speaker repeats a defamatory statement on several occasions, the plaintiff can recover damages for each occasion. Walker v. Associated Press, 417 P.2d 486 (Colo. 1966). 2. Foreseeable repetition by third parties. If third parties repeat a speaker's words, and such repetition was foreseeable, the speaker (as well as the repeaters) can be held liable. Spears Free Clinic & Hosp. for Poor Children v. Maier, 261 P.2d 489 (Colo. 1953); CJI-Civ.3d 22:23. But a speaker cannot be held liable for repetition by the plaintiff, even if it was foreseeable. C.R.S. ' 13-25-125.5 (overruling case law). 3. Possible actual damages include: a. impairment to reputation (presumed); b. humiliation (presumed); c. mental anguish (presumed); d. physical suffering; e. injury to credit standing; f. loss of income; or

g. other damages caused by statement. CJI-Civ.3d 22:25. 4. Punitive damages. Rowe v. Metz, 579 P.2d 83 (Colo. 1978); CJI-Civ.3d 22:26. F. How to Minimize the Risk of Defamation Claims. 1. Generally: a. Be careful about: (1) What you say. Speak carefully; e.g.: "based upon these facts, we believe Bob murdered Joe with an axe." NOT: "Bob is an axe murderer." (2) Who you say it to. Do you need to tell this fact to this person? b. Limit authority to speak for company. Also, train employees to be sensitive to danger zones. 2. Firing. a. Be sure of facts before you speak. b. Speak carefully (just the facts). c. Tell only those that need to know. (1) management; (2) co-workers? 3. References. a. Give only name, rank, and serial number (no details). b. Get consent from the employee (in writing). c. Make the reference in writing. d. Include only job-related information in the reference. If

the employee has sued you for something, this is not jobrelated. 4. The moral dilemma: Someone else's axe murderer. 5. Investigations. a. Have an attorney perform the investigation. This may give rise to a litigation privilege (possibly absolute) and may protect statements from discovery under the attorneyclient privilege or work product rule. b. Ask open-ended questions; e.g., "Tell me what you know about Bob's interaction with Jane." Not: "Have you heard anything about Bob harassing Jane?" c. Do not give out unnecessary details. d. Instruct those involved to keep quiet. II. PRIVACY Employees sometimes bring a lawsuit for invasion of privacy based on a perceived infringement on the individual's right to control personal information, such as drug and alcohol test results, applications and other form employment documents, medical information, background checks, e-mail, and computer databases. The Colorado Supreme Court first recognized a common-law right to privacy in 1970. See Rugg v. McCarty, 476 P.2d 753 (Colo. 1970). Since that time, courts in Colorado have generally applied the Restatement (Second) of Torts in analyzing privacy claims. The Restatement recognizes four different causes of action, but only two are applicable to the employment context: (a) intrusion into seclusion and (b) wrongful publication of private facts. A. Intrusion. 1. Elements: a. intentional intrusion (can be physical or otherwise); b. upon an individual's seclusion or solitude; and c. such intrusion would be offensive or objectionable to a reasonable person. Doe v. High-Tech Institute, Inc., 972 P.2d 1060 (Colo. App. 1998). 2. Examples: a. forcing a drug or alcohol test without consent, High-

Tech, 972 P.2d at 1066, b. testing for off-duty illegal drug use for nonsafetysensitive positions (employees in safety-sensitive positions may be tested based on reasonable suspicion), City and County of Denver v. Casados, 862 P.2d 908 (Colo. 1993), c. conditioning prescription drug use on supervisor approval and banning all non-prescription drugs at work, Roe v. Cheyenne Mountain Conf. Resort, 124 F.3d 1222 (10th Cir. 1997), d. verbal or physical sexual harassment, The Practitioner's Guide to Colorado Employment Law, Gallagher & Miller, ' 9.1.9 (1998), e. improperly obtaining financial or credit information, See Robyn v. Phillips Petroleum Co., 774 F. Supp. 587 (D. Colo. 1991), f. looking into an employee's office, desk, or file cabinet and other areas where an employee has a reasonable expectation of privacy (as opposed to a common area), O'Connor v. Ortega, 480 U.S. 709 (1987) (employee has a reasonable expectation of privacy in desk); U.S. v. Leary, 846 F.2d 592 (10th Cir. 1988) (employee has a reasonable expectation of privacy in office), g. looking into confidential employment information without consent, The Practitioner's Guide to Colorado Employment Law, Gallagher & Miller, ' 9.1.10 (1998), h. an employer may not require a job applicant to disclose any information contained in arrest and criminal records that have been sealed by court order, and the applicant may not be rejected solely for refusing to disclose such information, C.R.S. ' 24-72-308(3)(f)(1). B. Wrongful Publication of Private Facts. 1. Elements: a. disclosure of facts that are private in nature; b. disclosure to the public (a large number of persons instead of one individual);

c. disclosure is highly offensive (would cause emotional distress or embarrassment) to the reasonable person; d. disclosure is not of legitimate concern to the public; and e. defendant acted with reckless disregard of the private nature of the facts disclosed. Ozer v. Borquez, 940 P.2d 371 (Colo. 1997). 2. Examples: a. disclosure of an employee's sexual orientation to all other employees in the company, Ozer, 940 P.2d at 377. b. disclosure of confidential information from an employee's personnel file (including medical files) to individuals who are not in a need-to-know capacity or individuals outside the company, The Practitioner's Guide to Colorado Employment Law, Gallagher & Miller, ' 9.1.10 (1998). c. disclosure of the results of a harassment investigation to those who are not in a need-to-know capacity. C. Damages. a. General damages for harm to a plaintiff's interest in privacy resulting from the invasion or disclosure, b. damages for mental suffering and for physical manifestations of emotional distress, c. special damages, d. nominal damages if no other damages are proven. D. How to Minimize the Risk for Privacy Claims. 1. Consent. Consent is a complete defense to what otherwise would be an actionable claim for invasion of privacy. Thus, obtaining consent before drug testing, conducting searches, and obtaining/disclosing private information will help in the defense against such a claim. 2. No expectation of privacy. Employees should be notified early and often that they have no reasonable expectation of privacy related to their work areas, computer databases, e-mails, etc.

3. Judgment. The best preventive medicine against a privacy claim is to exercise sound judgment before inquiring into private information and before disclosing such information. Do you really need access to the information for job related reasons? Are the persons to whom you are disclosing the information in a need-to-know capacity?