Dossett v. New York Mining and Manufacturing Co.
451 S.W.2d 843, 1970 Ky. LEXIS 424 (1970)
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Rule of Law:
A corporation is liable for slanderous statements made by its agent if the statements are uttered within the scope of the agent's employment, even if the corporation did not specifically authorize or later ratify the slanderous words.
Facts:
- New York Mining and Manufacturing Company discovered a shortage of copper wire at its plant.
- W. C. Jones, Jr., a company vice-president, was notified and suggested an investigation.
- The plant manager, Herbert Barlow, informed Jones that James N. Dossett had admitted to taking scrap metal but denied taking any copper wire.
- Jones instructed Barlow to discharge Dossett but explicitly told him not to initiate criminal proceedings.
- Dossett alleged that when Barlow fired him, Barlow did so in the presence of other people and accused him of being a thief.
- Another employee stated that Barlow told him he had "caught a man stealing company property" and fired him in front of the other men.
Procedural Posture:
- James N. Dossett sued his employer, New York Mining and Manufacturing Company, and his manager, Herbert Barlow, for slander in a Kentucky trial court.
- The company filed a motion for summary judgment, arguing it could not be held liable because it never authorized or ratified Barlow's alleged statements.
- The trial court granted the company's motion for summary judgment, dismissing the complaint against it.
- Dossett, as appellant, appealed the trial court's grant of summary judgment to the Court of Appeals of Kentucky.
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Issue:
Is a corporation liable for slander uttered by its agent acting within the scope of his employment, even if the corporation did not specifically authorize or ratify the slanderous statements?
Opinions:
Majority - Steinfeld, J.
Yes. A corporation is liable for slander uttered by its agent acting within the scope of his employment. The court explicitly overrules prior Kentucky cases which held that a master is not liable for an agent's slander unless the master directed, authorized, or ratified the specific words. The court finds no logical reason to distinguish between the rules for corporate liability for libel and slander. By adopting the majority rule from other jurisdictions, the court holds that since Barlow was authorized to discharge Dossett, any slander he committed while carrying out that discharge and acting within the scope of his employment could create liability for the company.
Analysis:
This decision marks a significant change in Kentucky tort law by eliminating the distinction between corporate liability for libel and slander. By overruling precedent like Newberry Co. v. Faulconer, the court made it easier for plaintiffs to hold corporations vicariously liable for the defamatory statements of their employees. The standard shifts from the difficult-to-prove 'authorization or ratification' to the more common 'scope of employment' test, aligning Kentucky with the overwhelming majority of other American jurisdictions. This change increases the legal risk for employers and incentivizes better training and oversight of managers, particularly in sensitive situations like employee terminations.
