Melancon v. Hyatt Corp.
589 So. 2d 1186, 1991 WL 236201 (1991)
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Rule of Law:
An employer's accusation of a crime against an employee is defamatory per se, shifting the burden to the employer to prove the statement was true or protected by a qualified privilege. This privilege is defeated if the employer lacked a reasonable basis for the belief (good faith) or if the statement was communicated to employees without a corresponding interest or duty to know.
Facts:
- From 1983 to 1987, Mack Melancon was employed as a shift engineer at the Hyatt Regency hotel in New Orleans.
- In late 1986, the hotel's laundry manager, Mr. Dorsky, discovered that towels were missing.
- In response, the hotel's director of security, Elwood Conrad, installed a hidden video camera in the laundry room.
- On January 7, 1987, after more towels went missing, Conrad viewed a videotape showing a person taking towels and identified that person as Mack Melancon.
- Two other managers, Dorsky and Greg Besmehn, also identified Melancon from the video, but a security supervisor, Mr. Gros, stated that it did not look like Melancon.
- On February 6, 1987, Besmehn confronted Melancon with the accusation of stealing towels, which Melancon denied.
- Melancon refused to resign and was fired the next day for stealing towels.
- Following his termination, Melancon learned from one co-worker, and two other former co-workers testified, that various Hyatt employees knew he had been fired for stealing.
Procedural Posture:
- Mack and Jacqueline Melancon sued The Hyatt Corporation and two of its employees, Greg Besmehn and Elwood Conrad, in a Louisiana district court (trial court) for defamation, wrongful discharge, and loss of consortium.
- The trial court granted the defendants' motion to strike the wrongful discharge claim from the petition.
- The remaining claims were tried before a jury.
- At the end of the trial, the trial judge dismissed the individual claims against employees Besmehn and Conrad.
- The jury returned a verdict in favor of the Melancons, finding that Hyatt had defamed Mack Melancon and awarding damages.
- The trial court entered judgment in accordance with the jury's verdict and later denied Hyatt's motion for a new trial or, alternatively, for a remittitur.
- The Hyatt Corporation (defendant-appellant) appealed the judgment to the Court of Appeal of Louisiana, Fourth Circuit, where the Melancons were the plaintiffs-appellees.
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Issue:
Does an employer's communication to other employees that a former employee was fired for stealing constitute defamation when the employer's belief is not based on reasonable grounds and the communication is not limited to those with a need to know?
Opinions:
Majority - Klees, J.
Yes, the employer's communication constitutes defamation. The accusation of stealing is defamatory per se, which presumes malice and falsity and shifts the burden to the defendant, Hyatt, to prove an affirmative defense. Hyatt failed to prove its communications were protected by a qualified privilege. The privilege requires that the statement be made in good faith, meaning the employer had reasonable grounds to believe it was true. The jury, having viewed the videotape, was justified in concluding that the tape did not provide reasonable grounds for Hyatt's belief, thus negating good faith. Furthermore, the privilege only applies to communications with individuals who have a corresponding interest or duty; it does not extend broadly to all other employees. The plaintiffs successfully proved publication through circumstantial testimony that co-workers, who lacked a need to know, were aware of the defamatory reason for Melancon's termination.
Analysis:
This decision clarifies the boundaries of the qualified privilege for employers in defamation cases under Louisiana law, emphasizing that an employer's 'good faith' belief must be objectively reasonable to a fact-finder. It rejects a broad interpretation of the privilege that would protect communications to any employee, instead limiting it to those with a specific need to know. The case serves as a warning to employers that they are responsible for controlling the internal dissemination of defamatory information regarding terminations, as widespread rumors originating from management can satisfy the 'publication' element and defeat any claim of privilege.
