Be Careful in Preparing Personnel Documents

Montgomery Hospice, Rockville, MD, is a non-profit facility serving residents of Montgomery County. The Hospice employs doctors, nurses, counselors and other caregivers to provide end-of-life care to patients in their homes and at the Hospice's Acute Care facility.

Susan Lark was formerly employed by the Hospice as a pediatric case manager. She was supervised by Judy Redona, the Hospice's Director of Weekend and Evening Services, who in turn reported to Beverly Paukstis, Vice President for Clinical Services. Paukstis reported to Ann Mitchell, President and CEO of Montgomery Hospice.

As was its practice, all nursing employees at the Hospice were evaluated at least on an annual basis. Redona began preparing Lark's annual review in March. The review, which was performed by Redona and other supervisory employees at the Hospice, involved an examination of the charts and various patients treated by Lark.

After reviewing the charts of several patients, Redona became concerned about what she discovered, and requested the assistance of Paukstis in completing the evaluation. It was then decided that a group of Montgomery Hospice administrators should collaborate in the performance review for Lark. Several meetings were held with numerous members of Hospice management, including the Hospice's Medical Director and the Hospice's Director of Education. During those meetings, the group reviewed various records and discussed Lark's overall job performance. Although the group considered putting Lark on a performance improvement plan, it was ultimately decided that termination was more appropriate.

A memorandum explaining the termination decision was prepared jointly by Paukstis and several other Hospice managers. The memorandum addressed in great detail several of Lark's actions, which, in the opinion of the group, warranted termination. Lark was terminated.

Following her termination, Lark filed a lawsuit against the Hospice, complaining that such action was improper and illegal. Her claims against the Hospice were dismissed by the Circuit Court for Montgomery County. Thereafter, Lark refocused her efforts and filed the instant lawsuit against Paukstis, claiming that one sentence in the termination memorandum was defamatory, resulting in her termination.

Pretrial Procedures

Following several depositions and review of various documents, Paukstis moved for summary judgment to have Lark's defamation claim dismissed on the grounds that any communication prepared by Paukstis was not defamatory, or, even if it were considered defamatory, it was privileged under Maryland law. Maryland, like most states, grants a conditional privilege against defamation claims made in the employment context.

The law permits such privilege to encourage employees to speak freely about other employees without fear of being sued. The privilege, however, is not without limits. In order to defeat the conditional privilege in employment cases, the employee claiming defamation must prove that the statements made were knowingly false or made with reckless disregard of the truth, which in lawyers' terms is known as “constitutional malice.” In addition, in order to rebut the conditional privilege, the employee must prove constitutional malice with clear and convincing evidence ' a much higher standard than the ordinary “beyond a reasonable doubt” standard that applies in most civil cases.

In Maryland, as in most states, the question of whether conditional privilege applies is generally for the court to consider. However, whether or not the conditional privilege has been lost due to excessive publication or as a result of malice is generally reserved for the jury.

Following argument on Paukstis' motion for summary judgment, the trial court denied that motion, finding Lark's claim “thin.” The matter was then set for trial.

The Trial

The trial continued for four days. During that time, Lark called numerous witnesses in an attempt to establish that the termination memorandum was defamatory. All told, in addition to Lark and Paukstis, eight additional witnesses testified. Among those was the Hospice's Human Resources Director, who reviewed and approved the termination memorandum and stated that Lark's termination was in accordance with Hospice personnel policies. The CEO of the Hospice also testified that she approved the termination, but had not seen the termination memorandum prior to making that decision.

At the conclusion of the witness testimony, the jury began deliberations, which lasted over one day. At the end, the jury concluded that Lark had been defamed in the termination memorandum and the conditional privilege had been abused. However, despite that, the jury awarded Lark zero damages as the result of that defamation. Although Lark had claimed that she suffered severe emotional distress as a result of her termination, the jury was not swayed. Keep in mind that in defamation claims, there is no fee-shifting statute that requires the defendant, or in this case, Paukstis, to pay Lark's attorneys' fees.

Bottom Line

As this case demonstrates, although the law in most states offers much protection to employers and its employees against claims of defamation when performing employee evaluations or preparing termination memoranda, that protection does not immunize the employer, or, in this case, a managerial employee, from a lawsuit. Here, Lark was able to prove to a jury, not only that the statements made in the termination memorandum were false, but that the conditional privilege was lost because, according to the jury's verdict, at the time the termination memorandum was prepared, the authors either knew that it was false or acted in reckless disregard for the truth of the statements contained in the termination memorandum.

Judging from the testimony of the witnesses it is difficult to see how the jury arrived at that conclusion, especially considering the good-faith efforts of the Montgomery Hospice managers in trying to deal with and resolve a difficult personnel matter. Nevertheless, when you wind up in litigation, the only opinion that really counts is that of the judge or, in this case, the jury. Fortunately, in reaching its conclusion, the jury tempered that decision by awarding Lark zero damages.

What Steps Should You Take to Minimize Any Future Lawsuits?

First, in preparing any written materials concerning your employees, you must be truthful. Give objective facts, or opinions and conclusions that you can support with objective facts, rather than repeating mere allegations, speculation or gossip.

For example, you can safely state that an employee was fired for missing too many days of work. However, once you start providing unsubstantiated opinions on reasons for the absenteeism ' such as, the employee was drinking too much or was into illegal drugs ' you increase your risk of being sued.

Second, you should be clear and unambiguous. Keep in mind that statements that are technically true may still be defamatory if they are incomplete or misleading. Refrain from stating that an employee was terminated “for cause,” “insubordination,” or “unsatisfactory performance,” when you can give specific examples of the conduct that warranted the termination. Likewise, you should refrain from accusing the employee of theft or other criminal conduct. Instead, you should stick with the facts you know, i.e., that the employee did not follow company procedure, failed to properly safeguard company property, or otherwise did not comply with company rules.

Third, be objective and professional in preparing your statements. No matter how difficult your relationship with the former employee may have been, you should discuss the facts in an objective, non-malicious way and refrain from trying to “get back” at the former employee for prior transgressions.

Fourth, stick to job-related facts. Do not provide any information irrelevant to the employee's performance or behavior in the work place, and avoid offering comments about an employee's personal life, which may have no bearing on job performance. Gratuitous comments that the employee was “lazy” or “too dumb” for the job would probably not be appropriate.

Finally, make sure you limit the audience who will receive the information. One of the quickest ways to lose a defamation claim is to “excessively publish” the defamatory information to individuals who do not have a real need to know. While there is case law to support an employer who determines it is necessary to explain to other employees why a particular employee was terminated to demonstrate that the employer was not acting in an arbitrary manner, that rationale should not be taken too far. You should refrain from telling the world (by email or otherwise) why the employee was terminated ' especially when the world does not need to know or even care.

Kevin McCormick, a member of this newsletter's Board of Editors, is a Partner at Baltimore's Whiteford, Taylor & Preston.

After four days of trial in Maryland's Montgomery County Circuit Court, a jury refused to give a former employee any damages on her claim that she was defamed in a memorandum recommending her termination. That memorandum was prepared jointly by the Vice President of Clinical Services for a local hospice and three other hospice managers. Only the vice president, however, was singled out for a lawsuit (Susan Lark v. Beverly Paukstis, Circuit Court for Montgomery County, Maryland, Civil No. 292664-V, Jury Verdict April 9, 2009).

Since many employers regularly review their employees and record those assessments in written documents, the fact that the managerial employee could be sued for defamation based on those actions probably comes as a big surprise for many of you. A closer look at this case, however, is instructive.

Background Facts

Montgomery Hospice, Rockville, MD, is a non-profit facility serving residents of Montgomery County. The Hospice employs doctors, nurses, counselors and other caregivers to provide end-of-life care to patients in their homes and at the Hospice's Acute Care facility.

Susan Lark was formerly employed by the Hospice as a pediatric case manager. She was supervised by Judy Redona, the Hospice's Director of Weekend and Evening Services, who in turn reported to Beverly Paukstis, Vice President for Clinical Services. Paukstis reported to Ann Mitchell, President and CEO of Montgomery Hospice.

As was its practice, all nursing employees at the Hospice were evaluated at least on an annual basis. Redona began preparing Lark's annual review in March. The review, which was performed by Redona and other supervisory employees at the Hospice, involved an examination of the charts and various patients treated by Lark.

After reviewing the charts of several patients, Redona became concerned about what she discovered, and requested the assistance of Paukstis in completing the evaluation. It was then decided that a group of Montgomery Hospice administrators should collaborate in the performance review for Lark. Several meetings were held with numerous members of Hospice management, including the Hospice's Medical Director and the Hospice's Director of Education. During those meetings, the group reviewed various records and discussed Lark's overall job performance. Although the group considered putting Lark on a performance improvement plan, it was ultimately decided that termination was more appropriate.

A memorandum explaining the termination decision was prepared jointly by Paukstis and several other Hospice managers. The memorandum addressed in great detail several of Lark's actions, which, in the opinion of the group, warranted termination. Lark was terminated.

Following her termination, Lark filed a lawsuit against the Hospice, complaining that such action was improper and illegal. Her claims against the Hospice were dismissed by the Circuit Court for Montgomery County. Thereafter, Lark refocused her efforts and filed the instant lawsuit against Paukstis, claiming that one sentence in the termination memorandum was defamatory, resulting in her termination.

Pretrial Procedures

Following several depositions and review of various documents, Paukstis moved for summary judgment to have Lark's defamation claim dismissed on the grounds that any communication prepared by Paukstis was not defamatory, or, even if it were considered defamatory, it was privileged under Maryland law. Maryland, like most states, grants a conditional privilege against defamation claims made in the employment context.

The law permits such privilege to encourage employees to speak freely about other employees without fear of being sued. The privilege, however, is not without limits. In order to defeat the conditional privilege in employment cases, the employee claiming defamation must prove that the statements made were knowingly false or made with reckless disregard of the truth, which in lawyers' terms is known as “constitutional malice.” In addition, in order to rebut the conditional privilege, the employee must prove constitutional malice with clear and convincing evidence ' a much higher standard than the ordinary “beyond a reasonable doubt” standard that applies in most civil cases.

In Maryland, as in most states, the question of whether conditional privilege applies is generally for the court to consider. However, whether or not the conditional privilege has been lost due to excessive publication or as a result of malice is generally reserved for the jury.

Following argument on Paukstis' motion for summary judgment, the trial court denied that motion, finding Lark's claim “thin.” The matter was then set for trial.

The Trial

The trial continued for four days. During that time, Lark called numerous witnesses in an attempt to establish that the termination memorandum was defamatory. All told, in addition to Lark and Paukstis, eight additional witnesses testified. Among those was the Hospice's Human Resources Director, who reviewed and approved the termination memorandum and stated that Lark's termination was in accordance with Hospice personnel policies. The CEO of the Hospice also testified that she approved the termination, but had not seen the termination memorandum prior to making that decision.

At the conclusion of the witness testimony, the jury began deliberations, which lasted over one day. At the end, the jury concluded that Lark had been defamed in the termination memorandum and the conditional privilege had been abused. However, despite that, the jury awarded Lark zero damages as the result of that defamation. Although Lark had claimed that she suffered severe emotional distress as a result of her termination, the jury was not swayed. Keep in mind that in defamation claims, there is no fee-shifting statute that requires the defendant, or in this case, Paukstis, to pay Lark's attorneys' fees.

Bottom Line

As this case demonstrates, although the law in most states offers much protection to employers and its employees against claims of defamation when performing employee evaluations or preparing termination memoranda, that protection does not immunize the employer, or, in this case, a managerial employee, from a lawsuit. Here, Lark was able to prove to a jury, not only that the statements made in the termination memorandum were false, but that the conditional privilege was lost because, according to the jury's verdict, at the time the termination memorandum was prepared, the authors either knew that it was false or acted in reckless disregard for the truth of the statements contained in the termination memorandum.

Judging from the testimony of the witnesses it is difficult to see how the jury arrived at that conclusion, especially considering the good-faith efforts of the Montgomery Hospice managers in trying to deal with and resolve a difficult personnel matter. Nevertheless, when you wind up in litigation, the only opinion that really counts is that of the judge or, in this case, the jury. Fortunately, in reaching its conclusion, the jury tempered that decision by awarding Lark zero damages.

What Steps Should You Take to Minimize Any Future Lawsuits?

First, in preparing any written materials concerning your employees, you must be truthful. Give objective facts, or opinions and conclusions that you can support with objective facts, rather than repeating mere allegations, speculation or gossip.

For example, you can safely state that an employee was fired for missing too many days of work. However, once you start providing unsubstantiated opinions on reasons for the absenteeism ' such as, the employee was drinking too much or was into illegal drugs ' you increase your risk of being sued.

Second, you should be clear and unambiguous. Keep in mind that statements that are technically true may still be defamatory if they are incomplete or misleading. Refrain from stating that an employee was terminated “for cause,” “insubordination,” or “unsatisfactory performance,” when you can give specific examples of the conduct that warranted the termination. Likewise, you should refrain from accusing the employee of theft or other criminal conduct. Instead, you should stick with the facts you know, i.e., that the employee did not follow company procedure, failed to properly safeguard company property, or otherwise did not comply with company rules.

Third, be objective and professional in preparing your statements. No matter how difficult your relationship with the former employee may have been, you should discuss the facts in an objective, non-malicious way and refrain from trying to “get back” at the former employee for prior transgressions.

Fourth, stick to job-related facts. Do not provide any information irrelevant to the employee's performance or behavior in the work place, and avoid offering comments about an employee's personal life, which may have no bearing on job performance. Gratuitous comments that the employee was “lazy” or “too dumb” for the job would probably not be appropriate.

Finally, make sure you limit the audience who will receive the information. One of the quickest ways to lose a defamation claim is to “excessively publish” the defamatory information to individuals who do not have a real need to know. While there is case law to support an employer who determines it is necessary to explain to other employees why a particular employee was terminated to demonstrate that the employer was not acting in an arbitrary manner, that rationale should not be taken too far. You should refrain from telling the world (by email or otherwise) why the employee was terminated ' especially when the world does not need to know or even care.

Kevin McCormick, a member of this newsletter's Board of Editors, is a Partner at Baltimore's Whiteford, Taylor & Preston.