In a lawsuit involving both wrongful dismissal and defamation, Canada's Ontario Superior Court of Justice in Papp v. Stokes et al, 2017 ONSC 2357, has ruled that an employer’s negative review of an employee’s attitude during a reference check call did not amount to defamation.

Background

The plaintiff was employed by Stokes Economic Consulting from March 2011 until he was dismissed without cause in December 2013. The plaintiff requested that his former employer be his reference for future employment opportunities. In June 2014, an interviewer from a potential employer told the plaintiff he was the “first ranked” candidate, but that she still needed to check his references before making an official offer. After checking his references, the interviewer told the plaintiff that he would not be receiving an offer. In court, the interviewer testified that the former employer’s reference cost the plaintiff the position.

During the call with the former employer, the interviewer asked multiple questions about the employee’s attitude at work. According to the interviewer’s notes, the former employer answered that the employee did not get along well in a team setting, had “a chip on his shoulder,” had “attitude issues,” and that the former employer did not see any evidence of an ability to “develop good working relationships.” When asked if he would re-hire the employee, the employer said: “No way.”

Decision

After a review of the evidence, the Court found that the former employer’s words were defamatory because they referred to the plaintiff, tended to lower his reputation in the eyes of a reasonable person and were published—i.e., communicated to at least one other person. However, the former employer argued the defense of justification – namely, that the statements were substantially true. The Court agreed and found that on a balance of probabilities, the statements of the former employer were substantially true.

One of the issues in this case was the quality of the interviewer’s notes of the reference conversation. The Court found that the interviewer’s notes were not a complete record of the conversation. Nuances of what the former employer had said were lost due to the interviewer’s shorthand notation method. Going beyond the notes to the actual conversation, the Court found that the former employer had a genuine belief that his statements were true. The Court also held that words “published” in the context of a reference clearly fall within the range of qualified privilege.

The former employer, therefore, was able to establish a complete defense to defamation.

Takeaways

Many employers in Canada decide not to make negative comments about former employees’ work performance when called by potential new employers for a reference; instead, they often only confirm whether or not an employee worked for the employer and when they started and finished. This case provides some relief for employers that choose to make comments about an employee’s performance, provided the employer’s assessment is honest and the employer took reasonable steps to verify the facts.

At the same time, considering a discharged employee’s early re-employment may reduce an employer’s liability for wrongful dismissal damages, employers should carefully review and consider whether and to what extent a reference should be provided to prospective employers.