Libel and Slandor: Liability for Candor

The recruiting business is a business of words…discussing competitors, checking references, passing information back and forth, and always comparing one employer or employee to another. It’s unrealistic to expect objectivity when your fee is on the line.

But far more than your fee is on the line; you risk unlimited personal liability for words that injure someone else. This is the area of law known as defamation.

Slander is defamation by spoken words, while libel is by any other means (written, taped, pictured, etc.). It’s often difficult to determine where slander ends and libel begins (writing a reference check based on a phone conversation, etc.), but if the words are defamatory, the only difference is that slander is more difficult to prove.

The words must:

  • Be published (communicated) to third parties.
  • Be about the victim.
  • Defame (lower the reputation or standing of) the victim.
  • Damage the victim.

The definitions and examples that follow should make you the resident expert at the office, maybe even keep you out of trouble.

PUBLICATION

The word publication is misleading. It means communication in any form.

In the case of written communication, it is presumed that at least one person read it. This means that in libel cases, the burden of proof shifts to the communicator. He or she must show the information wasn’t read.

Courts are now applying the presumption to other permanent communication as well.

A corollary to this is that the information must be reasonably understood as a fact, not an opinion. It’s not always clear, so the circumstances of the publication are important.

ABOUT THE VICTIM

Not just any victim. Let’s assume you blast your competitors as follows:

“We refer more qualified candidates than other recruiters, because we have better sources than they do.”

No problem.

In this case, you’re just no close enough to identify anyone in particular. Even if the statement is false, it’s not slander. The employer might allege fraud, but your competitors are out of court. How about:

“The other recruiter in New York City who specializes in technical recruiting charges 10% more than us.”

Still no problem. New York is a big place, and it’s unlikely that this is specific enough. Even the 500 technical recruiters in New York won’t collectively have standing to sue. They can’t prove that you were referring to them as a group or individually. Of course, if you’ve referred to the “other” technical recruiter in New Rochelle, that’s a different story. You might as well name them.

And naming a competitor is a direct hit:

“X Associates charges 10% more than us.”

You’d better be right.

DEFAMATORY MEANING

Lowering someone’s reputation or standing isn’t the same as using profanity about someone. If it were, judges would have broken their gavels long ago trying to clean up the English language. A high court in South Carolina summed up the law recently when it stated:

Hasty, ill-tempered abuse [is not defamatory unless it conveys] degrading charge or imputation. A certain amount of vulgar name-calling is tolerated.

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But at the other end of the spectrum is defamation per se. It is also the most common form of defamation in the placement process. Consider a typical comment like this:

“X Associates just inundates employers with resumes, and hopes some of them stick.”

A presumption exists here that X Associates was damaged, because employers are likely to avoid working with them. Here, the burden of proof shifts to you to show that the employer didn’t avoid X Associates as a result of your compliment. There’s no law against no class.

You can also readily defame candidates per se if you state or even imply that they’re unqualified. Something like:

“Don was fired from Company Y because he couldn’t meet production deadlines.”

Or former consultants, if you state or imply that they committed a crime. A remark like:

“I caught Joe arranging kickbacks with employers.”

Again, you’d better be right.

There are certain privileges however, that can be used to protect the publisher of even per se defamation. They arise from the public policy to encourage the exchange of certain types of information. Reporting a crime, being completely open in court proceedings, commenting about public issues, and similar activities are generally protected by an absolute privilege. The First Amendment freedom of speech has been expanded by the courts as well, so actual malice must usually be shown to budge a judge.

But what about our examples? They fall in the area of conditional privileges. Abuse them and you lose them. If you’re talking to a client who is thinking of hiring Don, you are acting in a fiduciary capacity. So assuming your facts are straight, you can give him a bad rap. If the reference on Joe was to a prospective employer in the placement business, you’re probably ok. But if it was to one in the restaurant business looking to hire him as a manager, it’s not so clear. The scope of the privilege varies with the circumstances. Since ulterior motives often exist when giving bad references, litigation results. This all leads to the bottom line.

DAMAGES

There are two types: Compensatory (special and general) and punitive (or exemplary).

Compensatory damages are those that compensate the plaintiff. Special damages are actual ones (loss of business, job, etc.), and must be proven before the plaintiff can prosecute the case further. These are the ones that are presumed in the per se situation, however. Once you’re past special damages, general damages are presumed, since actual injury invariably results in devaluation of a business, future loss of income, emotional distress, etc.

The big numbers come from punitive damages, designed to punish the defendant and make an example of him to deter others from similar conduct (exemplary damages). There is no upper limit on these, as the headlines remind us regularly. They are also not dischargeable in bankruptcy like compensatory ones.

Now you know how to be candid – but be careful!

More than thirty-five years ago, Jeffrey G. Allen, J.D., C.P.C. turned a decade of recruiting and human resources management into the legal specialty of placement law. Since 1975, Jeff has collected more placement fees, litigated more trade secrets cases, and assisted more placement practitioners than anyone else. From individuals to multinational corporations in every phase of staffing, his name is synonymous with competent legal representation. Jeff holds four certifications in placement and is the author of 24 popular books in the career field, including bestsellers How to Turn an Interview into a Job, The Complete Q&A Job Interview Book and the revolutionary Instant Interviews. As the world?s leading placement lawyer, Jeff?s experience includes: Thirty-five years of law practice specializing in representation of staffing businesses and practitioners; Author of ?The Allen Law?--the only placement information trade secrets law in the United States; Expert witness on employment and placement matters; Recruiter and staffing service office manager; Human resources manager for major employers; Certified Personnel Consultant, Certified Placement Counselor, Certified Employment Specialist and Certified Search Specialist designations; Cofounder of the national Certified Search Specialist program; Special Advisor to the American Employment Association; General Counsel to the California Association of Personnel Consultants (honorary lifetime membership conferred); Founder and Director of the National Placement Law Center; Recipient of the Staffing Industry Lifetime Achievement Award; Advisor to national, regional and state trade associations on legal, ethics and legislative matters; Author of The Placement Strategy Handbook, Placement Management, The National Placement Law Center Fee Collection Guide and The Best of Jeff Allen, published by Search Research Institute exclusively for the staffing industry; and Producer of the EMPLAW Audio Series on employment law matters. Email him at jeff@placementlaw.com.

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