Can you get sued for defamation because you conduct an internal investigation? It depends on who you tell and what you say. In Warren v. Federal National Mortgage Assoc., a Texas court ruled in favor of the employer on a former employee’s defamation claim, based, in part, on the employer’s qualified immunity privilege. The investigation was conducted without malice and the results were shared only with persons who had a valid interest in the investigation.
The former employee alleged the company made two types of defamatory statements about her: the investigative report itself (looking into her violations of company policy) and comments allegedly made by other employees. Under Texas law, qualified privilege protects employers from defamation liability for communications made while investigating alleged wrongdoings, so long as the communications are made only to persons with a “valid interest.” To overcome the employer’s qualified privilege, this employee had the burden of establishing by clear and convincing evidence that statements made during the investigation were made with malice or were distributed to persons who lacked a valid interest. The employee attempted to establish malice by pointing to things the investigator left out of the report, rather than evidence in the report, but the court said lack of investigation is insufficient to show actual malice. The employee then speculated that the company shared its investigation with other employees and their spouses – but there was no actual evidence that any of these third parties received the information. The evidence showed that only persons with a “valid interest” in the information received the report or were made aware of its findings. Thus, the employer was safeguarded by the qualified privilege defense.
The takeaway? Including only evidentiary findings and truthful statements in an investigative report and sharing it among only those on a need to know basis provides a backup defense to a defamation claim in many states.
