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Qualified privilege protects comments made during reference check from defamation action

Can employees sue successfully for defamatory remarks made by employers in the course of providing an employment reference? Miller v. Bank of Nova Scotia (December 9, 2002), a decision of the Ontario Superior Court of Justice, provides some guidance on this issue.

Betsy Miller was an experienced former bank employee who wanted to re-enter the work force. She accepted a job with the Bank of Nova Scotia (BNS) that involved working late on Thursdays and Fridays and on Saturdays. Although she did well in her new position, she was unhappy with her hours and raised her concerns with Nadia Yammine, the branch manager. Yammine said she would see what she could do, but indicated that no change could be made until the end of RRSP season, some two months later.

Shortly after this conversation, Miller learned of a position at the Canadian Imperial Bank of Commerce (CIBC), her former employer. She decided to leave her position at BNS and return to CIBC. After some three months with BNS, Miller submitted her resignation by registered mail. She declined to give the two weeks notice required by her employment contract.

However, CIBC's offer of employment was conditional upon the receipt of satisfactory references, one of which had to come from Miller's most recent employer. Therefore, CIBC contacted Yammine through an outside company called Intelysis.

"IRRESPONSIBLE" AND "UNDERHANDED"

Gaelynn Johns, the Intelysis employee, contacted Yammine by phone. Yammine, who had not been told by Miller that she would be asked to provide a reference, was taken by surprise. Johns made notes of the conversation - notes which included observations allegedly made by Yammine about Miller such as "irresponsible", "unreliable", "very underhanded", "attitude problem", "never lived up to her commitment", "did not cooperate with staff" and "did not have the decency to speak to [Yammine] face-to-face when resigning". Another note indicated that Miller "could have done the job".

As a result of this report, CIBC terminated Miller's employment. Miller then sued BNS and Yammine for slander.

At trial, Johns testified that, apart from her notes, all she could remember of the conversation with Yammine was that Yammine was upset. For her part, Yammine testified that, on being called for the reference, she had told Johns that she was upset with Miller, could not be objective and did not want to provide a reference. Yammine acknowledged expressing unhappiness about the way Miller had resigned, calling it cold and inappropriate, but she denied making many of the other remarks attributed to her in Johns' report. She stated that, apart from the resignation issue, she had made no disparaging remarks about Miller's character.

REFERENCE CHECK SHIELDED BY QUALIFIED PRIVILEGE

The Court found that Yammine's account of what was said was to be preferred over Johns', and it described the notes as not being a reliable record of Yammine's comments. Furthermore, the Court added, Yammine's words were spoken on an occasion of qualified privilege, the legal doctrine which protects statements made in certain contexts, that otherwise might be considered slanderous.

However, qualified privilege can be lost if the person making the remarks is motivated by malice. Miller argued that Yammine's comments were malicious in that they stemmed from her unhappiness at the manner in which Miller had resigned. The Court disagreed, noting that Yammine did not initiate or welcome Johns' call, and that she had frankly stated at the beginning that she was upset and could not be objective because of the manner in which Miller had resigned. The Court added:

"There is no evidence of any intent to mislead or be malicious. In fact, [Yammine] is rather even-handed in her comments because she says in a very positive way that Miller could have done the job.

I find that Yammine had a legitimate basis for making negative comments about Miller and expressed them frankly. She also expressed positive comments. Yammine expressed her views on a privileged occasion and in doing so she is protected even if her language was considered excessively strong as, having regard to all the circumstances, she honestly and reasonably believed what she said was true and necessary for Johns' purposes."

In dismissing Miller's action, the Court concluded by finding that Miller had not established that the defamatory words were spoken and that, in any event, Yammine and BNS were entitled to assert qualified privilege with respect to her remarks to Johns.

In Our View

Qualified privilege is said to arise when a person making a statement has an interest or duty to make it to the person to whom it is made, and the person to whom the statement is made has a corresponding interest or duty to receive it. This definition would seem to fit the provision of employment references.

If it is determined that the occasion on which the statement was made is privileged, then otherwise actionable remarks will be protected. However, as the word "qualified" indicates, the privilege is not absolute. As noted in the case, qualified privilege will be lost if the remarks are maliciously made, or they otherwise exceed the scope of the privilege. Therefore, employers are protected if, during a reference check, they make negative remarks that may otherwise be defamatory, as long as the remarks are made in the reasonable and honest belief that they are true. (For more on the issue of reference checks, see "Employment references: Care, not silence, required" on our Publications page.)

For further information, please contact Colleen Dunlop at (613) 940-2734.