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Download NowWhat happened. When Daniel Popko came back to his job at Continental
Casualty in July 1999 after his honeymoon, he found that he’d been terminated
for poor conduct. The bad behavior had taken place over the past year, culminating
in an angry confrontation during a performance review before Popko’s honeymoon.
At that time, Popko, upset that he’d been given a low rating, in contrast
to a prior series of positive reviews, used profanity and challenged the authority
of his supervisor, Steven Tefft.
After the review, Tefft and Tefft’s superior, David Izzo, agreed to fire
Popko. Izzo drew up a memo for Continental Vice President Bruce Johnston, setting
forth several instances showing a "pattern of unacceptable conduct"
by Popko. Popko sued Continental for defamation based on what he claimed was
the falsity of the information contained in the termination memo. At the trial,
among other things, testimony established that Johnston never investigated the
issues raised in Izzo’s memo. A jury returned a verdict favoring Popko.
Continental appealed.
What the court said. On appeal, the issue was whether Popko had demonstrated
all the elements of defamation: that Continental made a false statement about
him, that the statement was "published" or disclosed to a third party,
and that the publication damaged Popko. Continental argued that an internal
communication is not "published" for purposes of a claim of defamation.
But the court said that communication in a corporate environment may constitute
such publication, and turned to the issue of whether the information was privileged
and therefore legally immune.
It could be privileged if, for example, it were part of an investigation of
employee conduct. Proof of privilege is up to the employer, and the employee
then shows that the company abused the privilege by directly intending to injure
the employee or recklessly disregarding his rights. In the absence of proof
of privilege, the court affirmed the jury’s verdict. Popko v. Continental
Casualty Co., Illinois Appellate Court, 1st District, No. 1-03-3389 (1/21/2005).
Point to remember: Information in an internal memo is privileged
if the employer can show that it is part of an internal investigation. Without
kicking off an investigation, Continental turned down the privilege that otherwise
would have protected the memo.