1. What statements by TA, specifically, do you consider to be malicious? Why?

2. How could TA’s management have prevented the defamation from occurring?

3. What is the public policy behind the employer reference privilege? Is it fair to the employee who may have a different perspective on the circumstances of his or her termination? Have you ever heard an employer defaming an ex-employee?

Tradewind Aviation (TA) employed Nelson as a pilot for a small commercial air-line that primarily flew from New York and New Jersey to Martha’s Vineyard and Nantucket. Over the course of the summer of 2007, Nelson copiloted 137 flights without incident or complaint from passengers. Nelson was never removed from flying status for a performance-based reason or disciplinary reason. Although some senior pilots did complain about Nelson, he was never given a written warning, disciplined, or suspended. As the summer ended, TA announced that some pilots would be laid off due to a decrease in demand during the off-season. Nelson committed to working during the first part of the off-season; how-ever TA informed Nelson it would be unable to continue his employment. TA’s human resources office completed necessary paperwork indicating that Nelson was laid off due to “lack of work.”

In December 2007, Nelson was offered a job by Republic Airways (Republic). As part of his initial interview, Nelson signed authorizations that gave TA permission to verify his employment with TA and to release all of his employment records to Republic. This authorization also required TA to send copies of these records to Nelson so that he had an opportunity to submit written comments to correct any inaccuracies. TA completed the reference forms and indicated (1) that Nelson had been involuntarily terminated from TA and (2) Nelson had been involuntarily removed from flying status based on poor performance. Responding to Republic’s request for more details, TA faxed Republic a letter stating that Nelson was terminated “after he failed to perform to company standards.” Prior to that date he was given several opportunities to discuss the need for improvement as well as additional training to help him perform at the levels we needed.” TA never sent the records or letter to Nelson. Republic subsequently revoked its job offer. Nelson sued TA for, among other claims, defamation. The jury awarded the plaintiff a total of $307,332.94 in damages. TA appealed asserting the employer reference privilege. 

The court affirmed the jury’s verdict in favor of Nelson. The court reasoned that it was well settled that defamation is actionable if it charges improper conduct or lack of skill or integrity in one’s profession or business and is of such a nature that it is calculated to cause injury to one in his profession or business. The court rejected TA’s argument that Nelson had not proven that TA’s statements rose to the level of malicious. The court held that a qualified privilege in a defamation case may be defeated if it can be established that the holder of the privilege acted with malice in publishing the defamatory material. Based on the facts in this case, the jury’s conclusion that the statements were made with malice was reasonable.

“A review of the evidence reveals that the jury reasonably could have concluded that the defendant’s defamatory statements were made with knowledge that they were false and with an improper motive. The jury reasonably could have found that [Nelson] was laid off due to lack of work, that [TA supervisors] never removed the plaintiff from a flight for performance or professional competency reasons, that [Nelson] was never offered or sent for any additional training .  .  . Additionally, the jury reasonably could have found that the statements were made with an improper motive in light of the timing and manner in which the statements were made.”