The Supreme Court of Georgia confirmed the limited scope of the "intracorporate publication" defense to defamation claims when it unanimously ruled that when an employee is fired, only those company employees who have a "need to know" the alleged reasons for the firing can be told the reasons or the fired employee may have a defamation claim against the company if the stated reasons are not true. The case is Scouten v. Amerisave Mortgage Corp., ---S.E.2d---, 2008 WL 215416 (January 28, 2008).
To state a defamation claim, the plaintiff must prove that a defamatory statement was "published," or, put another way, heard or read by someone other than the plaintiff. In recent years, Georgia Courts have increasingly recognized an "intracorporate" exception to publication, and have ruled that statements made within a company or corporation are not technically published and no defamation claim can lie. This "legal fiction" is based on the belief that, because the other "corporate person" being told of the information needs it for the business to function, these types of statements "are the legal equivalent of speaking only to one's self " and are thus not published.
In Scouten, the appellant, Stephen Scouten, alleged a defamation claim against his former employer, Amerisave Mortgage Corporation, because Amerisave allegedly had falsely told other employees that Scouten was fired for theft from the corporation.
The Court of Appeals affirmed the trial court's dismissal of the complaint in its entirety, finding that Scouten had failed to allege that false statements were disseminated outside the corporation. The Supreme Court reversed, and ruled that the intracorporate exception does not apply to all intracorporate communications, but only "those statements received by one who because of his duty or authority has reason to receive the information." Because Scouten had alleged that defamatory statements were "disseminated to employees with no need to have access to his private personnel information," the Supreme Court reversed the Court of Appeals, ruling that he had sufficiently stated a claim for relief.
The Scouten case makes clear that employers should be very careful in divulging information about employees to others within the corporation. Employers should be certain not to share information with those who do not have an absolute need to know about it. If information is shared with those who do not have a need to know— even if the information remains solely within the corporation—employers will open themselves up to potential liability for defamation. Of course, the "devil is in the details" as to who "needs to know" whether an employee has been fired. This standard is hardly susceptible to a bright line test and in most cases will be judged on a case by case basis. To be sure, however, employers are urged to carefully limit the scope of persons who are told why an employee is terminated, and to ensure that the correct reasons are disseminated.
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