Shannon v. Taylor amc/jeep, Inc
168 Mich. App. 415, 425 N.W.2d 165 (1988)
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Rule of Law:
An employer's communication to a customer explaining that a former employee was terminated for criminal activity is not protected by a qualified privilege unless the customer has a corresponding interest or duty in the information, such as being directly affected by the alleged misconduct. Mere curiosity on the part of the customer is insufficient to establish such a privilege.
Facts:
- Plaintiff worked as a parts manager for defendant Taylor AMC/Jeep, Inc. (Taylor) for approximately twelve years.
- Plaintiff disciplined and subsequently fired an employee, Laurie Cherup, who was then reinstated by a manager from American Motors Sales Corporation (AMC), Rick Howard, with whom Cherup was in a relationship.
- Working with Taylor Police Officer James Black, plaintiff arranged to purchase two Jeep hardtops that he suspected were stolen, as part of an effort to help police gather evidence against the sellers.
- Plaintiff informed another Taylor employee that the hardtops were not for sale because he believed they were stolen.
- Taylor terminated plaintiff's employment in June 1982, citing his alleged involvement with stolen parts.
- After plaintiff's termination, Laurie Cherup was promoted to his former position as parts manager.
- Cherup was overheard on several occasions telling customers over the phone that plaintiff was fired because he had 'gotten caught stealing' and was 'involved in theft of parts.'
Procedural Posture:
- Plaintiff filed a complaint in a Michigan trial court against defendants Taylor AMC/Jeep, Inc. (Taylor) and American Motors Sales Corporation (AMC), alleging wrongful discharge, sex discrimination, and slander per se.
- The trial court dismissed all counts against defendant AMC.
- A jury returned a verdict of no cause of action in favor of defendant Taylor on the slander and sex discrimination claims.
- The same jury returned a verdict in favor of plaintiff against Taylor on the wrongful discharge claim, awarding him $9,610.
- The trial court entered judgment for attorney fees and costs in favor of both defendants based on the results of the slander and sex discrimination claims.
- Plaintiff (appellant) appealed the judgment of no cause of action on the slander claim and the award of attorney fees to the Michigan Court of Appeals, with Taylor (appellee) as the opposing party on that claim.
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Issue:
Does an employer have a qualified privilege to tell its customers that a former employee was fired for involvement with stolen parts when there is no evidence that any customer received stolen goods?
Opinions:
Majority - G. R. McDonald, J.
No. An employer does not have a qualified privilege to make such statements to customers under these circumstances. To establish a qualified privilege, a communication must be (1) bona fide, (2) made by a party with an interest or duty, and (3) made to a party with a corresponding interest or duty. The court found that the second and third requirements were not met. Taylor, the employer, had no legitimate interest or duty to inform customers why plaintiff was fired because there was no evidence that any customers had been sold stolen parts. Likewise, the customers had no corresponding interest or duty to receive this information; their interest was merely a general curiosity, which is insufficient to create a privilege. Because the trial court incorrectly instructed the jury that a qualified privilege existed, plaintiff was improperly required to prove actual malice. This instructional error was not harmless, and a new trial is required.
Analysis:
This decision significantly narrows the scope of an employer's qualified privilege in defamation cases involving communications to third parties like customers. It establishes that the privilege does not cover general explanations for an employee's termination made to those without a direct, specific interest in the underlying misconduct. The ruling distinguishes between a recipient's legitimate need to know (e.g., a customer who unknowingly bought stolen goods) and mere curiosity. This places a greater burden on employers to justify defamatory statements about former employees to external parties, reinforcing that protecting an employee's reputation is the default position absent a compelling, specific reason to disclose.
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