In Frank B. Hall & Co. v. Buck, 678 S.W.2d 612 (Tex. App. 1984), cert. denied, 472 U.S. 1009 (1985), Buck had worked for the Hall insurance agency. He was fired from that position. Afterwards, Buck found he could not get another position. Eventually, Buck hired a private investigator. The investigator contacted key people at the hall agency, telling him that Buck was being considered for a position of considerable responsibility at his firm. Eckart, the top officer at the Hall agency, met with the investigator and during his discussions called Buck “a zero,” “a Jekyll and Hyde person,” and “a classical sociopath.” He also accused Buck of stealing from the Hall agency.
Other agency employees in interview with the investigator made similarly disparaging remarks, including comments that Buck had wrongfully brought materials from a prior employer to the Hall agency.
Buck sued, raising various claims ,the most important of these being defamation. A jury found that Buck had been defamed. The jury ruled that this injury, Buck was entitled to compensatory damages of $600,000. Further, the jury decided that Buck was entitled to punitive damages of $1.3 million, so that the total award against the Hall agency was $1.9 million. The Hall agency appealed.
An appeal of a case of this sort presents a frustrating situation for anyone trying to draw lessons from the case. The function of the appellate court is restricted to issues of law. This means that the appellate court must accept the facts as found by the jury, unless it finds from a review of the record that the evidence supporting a jury finding is so scant that no reasonable person could believe it. The appellate court is not permitted to question the facts anew.
In this case, that restriction on the appellate courts function is very important. It had to affirm the findings of the jury, even if, had it been acting as a jury, it would have ruled differently. On appeal, the appellate court ruled that the jury could have found that by making
statements made to the private investigator, the Hall agency had “published” these statements, that is had made the statements to a third party. The court ruled that the jury could have found that these statements were slanderous. In perhaps the weakest part of the opinion, the court struggle over the question of who had the burden of proof on the issue of truthfulness: did the defendant have the burden of proving that the statements were true, or did the plaintiff have the burden of proving that the statements were false. The court suggested that the burden was on the defendant to prove that the statements were false, and held that the jury could have found that the statements were false. The court also ruled that the jury could have found that the statements were made with an intent to injure the plaintiff. Based on these findings, the appellate court affirmed the verdict of $1,900,000.
I think this opinion is a very questionable product. Although the appellate court did a wide-ranging review of the law, in one regard, the court seems to avoid the issue that hangs over this case. For many employers, the candid evaluations of prior employers are extremely important. While calling Buck “a classical sociopath” was slanderous if it were taken as a psychological evaluation, in the common vernacular sense, it could mean merely that Buck was hard to deal with and tended to be very ego-centric in his dealing with others. Assuming that this was the case, this information could be of tremendous value to a prospective employer.
This decision reinforces the unfortunate tendency among employers to refuse to disclose information. It has become the regular policy among many employers to report only the hire date, last date worked, and the last position held. While this information is helpful, it is clearly incomplete from the prospective employers standpoint.
Consider a worst-case scenario: the employee is terminated because he physically assaults a co-worker. In his personnel file are fourth reprimands for threatening to assault co-workers over trivial matters. Also there is a report showing that an after-the-fact background check disclosed that the employee was on probation for a violent assault against co-workers in another city. A prospective employer calls, informing the former employer that the employee has applied for a position involving considerable stress and requiting a firm ability to cope with stress in face-paced interactions with other staff. Under these circumstances, does the former employer have a legal duty to give candid answers, or can the employer stand firm on its position of disclosing only the hire date, last date worked, and the last position held.
Notably, there is authority suggesting that there is a duty to disclose. In 1975, the California Supreme Court ruled in a case of Tarasoff v. Regents of the University of California., In that case, a psychiatrist at a University of California teaching hospital had a patient who was madly in love. But the plaintiff’s daughter refused to return his affections., The patient announced in session one day that he was going to kill the plaintiff’s daughter. Over several sessions, the patient kept talking about his intention to kill the plaintiff’s daughter to the point where the psychiatrist believed that the plaintiff was serious. Believing also that he was compelled by rues of confidentiality to keep everything private, he did nothing to warn the daughter. The patient lay in wait one day at a bus stop where he expected to see the daughter. As she stepped off a bus, the patient shot her with a high-powered rifle. Plaintiff sued the hospital on the theory that the hospital was liable for the actions of its employees, and that the psychiatrist did have a duty to warn the daughter that she was in danger. Notably, not all states have adopted this rule, and some, including New York, Minnesota, and Maryland have specifically rejected it. (Keeton, 394-95)
By analogy, in the employment situation, there should be at least some matters which an employer would be obligated to disclose. If there is an obligation, some exception to the rules of defamation would have to be recognized, because without an applicable privilege, the employer could be caught in the damned-if-you-do;-damned if you don’t” conundrum, and the employer should not be put in that situation. Perhaps it will merely require the courts to look much more seriously at the question of the truthfulness of a report to a prospective employer. How it is done is less important than its being done.
WORKS CITED
Frank O. Hall Co. v, Buck, 678 S.W.2d 612 (Tex Ct. App. 1984)
Keeton, Page. (1984), Prosser and Keeton on Torts. 5th ed. St Paul, Minnesota: West Publishing.
Tarasoff v. Regents of the University of California, 17 Cal.3d 425, 131 Cal. Rptr. 14, 551 P.2d 334 (1976)
