Zinda v. Louisiana Pacific Corp.
4 I.E.R. Cas. (BNA) 703, 149 Wis. 2d 913, 440 N.W.2d 548 (1989)
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Rule of Law:
An employer's communication to its employees regarding the reason for a fellow employee's discharge is protected by a conditional privilege against both defamation and invasion of privacy claims. This privilege is lost only if it is abused, and whether an abuse occurred through excessive publication is typically a question of fact for the jury.
Facts:
- Prior to his employment with Louisiana Pacific, Allan D. Zinda was injured in a fall from a roof, breaking several bones.
- On his Louisiana Pacific employment application and medical history form, Zinda answered 'No' to questions about prior back injuries or broken bones.
- In a separate section of the form, Zinda did note a previous hospitalization for a 'fall off roof,' and verbally clarified to an interviewer that he had broken some bones but had no current problems.
- Zinda signed the forms, which stated that any falsification would be grounds for immediate discharge.
- Approximately one year after being hired, Zinda filed a products liability lawsuit against Louisiana Pacific, alleging the company's 'waferboard' caused his pre-employment fall and resulted in permanent disabilities.
- After comparing the allegations in Zinda's lawsuit to his employment application, Louisiana Pacific's personnel manager concluded Zinda had falsified the forms and terminated his employment.
- Louisiana Pacific then published a notice in its internal company newsletter stating: 'Terminate A1 Zinda Falsification of Emp. forms.'
- Approximately 160 copies of the newsletter were distributed to employees by placing them in the company lunchroom; employees were not restricted from taking copies home.
Procedural Posture:
- Zinda sued Louisiana Pacific in circuit court (trial court) for defamation and invasion of privacy.
- The trial court refused to submit Louisiana Pacific's requested jury instruction on conditional privilege.
- A jury found for Zinda, awarding him $50,000 for defamation and $50,000 for invasion of privacy, and the trial court entered judgment on the verdict.
- Louisiana Pacific (appellant) appealed to the court of appeals.
- The court of appeals held that any privilege was abused as a matter of law by excessive publication, but it reversed and remanded for a new trial solely on the issue of damages, finding the award excessive.
- Both Zinda and Louisiana Pacific petitioned the Supreme Court of Wisconsin for review of the court of appeals' decision on the issues of damages and liability, respectively.
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Issue:
Is an employer's communication in a company newsletter to its employees regarding the reason for another employee's discharge protected by a conditional privilege against defamation and invasion of privacy claims?
Opinions:
Majority - William A. Bablitch, J.
Yes, an employer's communication to its employees about the reason for another employee's discharge is protected by a conditional privilege. The court found that such communications fall under the 'common interest' privilege recognized by the Restatement 2d of Torts. This privilege applies because both the employer and employees share a legitimate interest in the matter. Employers have an interest in maintaining morale, dispelling rumors, and discouraging misconduct, while employees have an interest in understanding company rules and the consequences of violating them. The court held that this same conditional privilege also serves as a defense to Zinda's statutory invasion of privacy claim. However, the privilege is not absolute and can be forfeited if abused. The court concluded that whether Louisiana Pacific abused the privilege through 'excessive publication' by distributing the newsletter in a way that it could reach non-employees was a question of fact for the jury, not a matter of law for the judge to decide. Therefore, the trial court erred by refusing to instruct the jury on the defense of conditional privilege.
Analysis:
This decision solidifies the application of the 'common interest' conditional privilege to internal employer communications about employee terminations, extending it to cover both defamation and statutory invasion of privacy claims in Wisconsin. The court's holding that the question of 'abuse by excessive publication' is generally a factual issue for the jury provides employers with a significant, though not absolute, defense. This precedent means that employers using internal newsletters or similar mass communications are not automatically liable if the information reaches outsiders, but they must be prepared to have a jury evaluate the reasonableness of their communication method.
