Ann Kiernan replies:
As a general rule, yes, an employer is free to tell others why it terminated an employee. However, if the information the employer gives out is not true, the employer can be sued for defamation (libel = written; slander = spoken).
Merely stating someone has been terminated from employment is not defamatory, but it can be defamation if the employer insinuates misconduct or lack of professional competence. In Davis v. Ross, 754 F.2d 80 (2d Cir. 1985) the court upheld a claim for libel against singer Diana Ross, after Ross circulated a letter disclosing that her former executive assistant was no longer in her employ and stating: “If I let an employee go, it’s because either their work or their personal habits are not acceptable to me. I do not recommend these people. In fact, if you hear from these people, and they use my name as a reference, I wish to be contacted.”
In another case, an employee whose workplace actions were described as “abusive, vulgar and offensive,” and did not “epitomize civilized human behavior”, was held to have a defamation claim. (Lutz v. Royal Ins. Co., 245 N.J. Super. 480, 493 (App. Div. 1991). And these cases can be expensive. In Frank B. Hall & Co. v. Buck, 678 S.W.2d 612 (Tex. Ct. App. 1984) the court affirmed a jury award of $1.9 million to an employee whose former employer described him as a “classical sociopath,” “a zero,” and “a Jekyll and Hyde person” who was “lacking in compucture