It’s common for a potential employer to ask a job candidate for a reference from a previous employer. A candidate can usually be expected to provide a potential employer with a reference who they know is going to provide a positive recommendation. But what happens when a former employer gives a bad reference? Can a former employer be held liable for doing so? Such a situation was recently addressed in a decision from the Ontario Superior Court of Justice.

 Losing a job over a poor reference

The employee had already received a conditional offer of employment from the new employer. However, the offer was revoked after her former employer said there was “a lot of conflict” with the employee, that she “did not take directions well,” that she was “narrowly-focused,” that she “did not handle stress well,” and that he would not rehire her. The employee pleaded that the former employer was motivated by “malice, spite and a desire to get revenge on her.” She put forward that the former employer had a desire for revenge against her based on three events that occurred while she worked for him in which she “had embarrassed him, contradicted him or had shown him to be wrong.” The former employee admitted to saying he would not re-hire the employee, and admitted the “gist” of the other statements ascribed to him. However, he also said the statements were part of a larger conversation in which he also said positive things about the employee. He also pleaded his statements were made in the context of an employment reference, which is an occasion of qualified plaintiff and that they cannot be considered defamatory unless the plaintiff can prove malice. The employee worked for the former employer as a Senior Control Analyst from 2006-2011. She received positive performance ratings and merit based salary increases during that time. Her employment was terminated a result of the company’s acquisition by another company.

The legal framework of defamation

The court began its analysis by looking at the legal framework applicable to defamation. As summarized by the Ontario Superior Court of Justice in 2017, a plaintiff must show three things to prove defamation.

1. That the impugned words were defamatory, in the sense that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person;
2. That the words in fact referred to the plaintiff;
3. That the words were published, meaning they were communicated to at least one person other than the plaintiff;

Once the plaintiff proves defamation, the onus then shifts to the defendant to escape liability. The court then applied the facts of the case to the framework of defamation. The court noted that if defamation was found to have occurred, the only defence pleaded by the former employer was qualified privilege. The court asked the following questions:

1. What did (the former employer) say about (the employee) to (the employer)?
2. Were (the former employer’s) remarks defamatory?
3. Were the remarks made on an occasion of qualified privilege?
4. If the occasion was one of qualified privilege, is the privilege defeated by malice?
5. If no defamation is found, can (the employee) pursue a remedy under the alternate causes of action?

What did the former employer say about the employee to the employer?

Based on the testimony of those involved, the court found the former employer to have said the following:

1. There was a lot of conflict between (the employee), her supervisor and other employees;
2. (the employee) did not take directions well;
3. (the employee) does not handle stress well; and
4. He would not re-hire (the employee) in a project controls position, but would hire her in an autonomous financial position

Were the former employer’s remarks defamatory?

The court found there was no question that the second and third elements of defamation had been established (that the words referred to the employee, and that they were communicated to at least one person other than the employee). In determining whether the words themselves qualified as defamatory, the court concluded the statements made would generally be considered to be undesirable characteristics in an employee, and were, in fact, defamatory.

Were the remarks made on an occasion of qualified privilege?

The defendant argued that qualified privilege applied because his remarks were made as an employment reference. The court agreed, stating the “social policy underpinning the protection of employment references in this manner is clear: an employer must be able to give a job reference with candour as to the strengths and weaknesses of an employee, without fear of being sued in defamation for doing so. Without this protection, references would either not be given, or would be given with such edited content as to render them at best unhelpful or at worst misleading to a prospective employer.”

Is the qualified privilege defeated by malice?

The law states that the protection of qualified privilege is lost if the employee is able to prove that the dominant motive for publishing the defamatory expression is actual or express malice, which includes

1. Spite or ill will;
2. Any indirect motive or ulterior purpose which conflicts with the occasion;
3. Speaking dishonestly, or in knowing or reckless disregard for the truth.

While the court did find a history of conflict between the former employer and the employee, it did not find that any of the instances where there was conflict led to the development of feelings of malice towards the employee by the former employer. With respect to alternative causes of action, the court found that since the employee’s alternative causes depended on the original claims of defamation, she was not able to pursue those. The court ruled in favour of the former employer. We will be sure to update our blog should this case be appealed. At NULaw we represent both employees and employers in employment law matters. We can help employers determine what obligations they have towards current and former employees when it comes to reference requests while also assisting employees in determining whether they have been unfairly treated during such a process. Please call us at 416-481-5604 or reach us online to talk today.