The Ontario Superior Court of Justice recently found an employer wasn’t liable for defamation when it provided a truthful — but negative — reference about a former employee.
In Papp v. Stokes, the plaintiff, Adam Papp, worked as a staff economist for the defendant, Stokes Economic Consulting Inc. In 2013, the president of the company, Ernest Stokes, terminated Papp’s employment without cause. Following the termination, Papp asked Stokes whether he could use him as a reference. Stokes agreed.
In 2014, Papp went through a lengthy screening process for a new job. Following an interview, the prospective employer told Papp he was the leading candidate for the position and then contacted Stokes and conducted a reference check over the phone.
The prospective employer asked Stokes how he would rate Papp’s quality of work, to which Stokes stated: “We are not that pleased.” When asked to describe how Papp got along with coworkers, Stokes said, “not well” and “not greatly.” Although Stokes described Papp’s strengths, when asked whether he’d rehire Papp, he said, “no way.” Following the reference check, the prospective employer contacted Papp and told him it was no longer considering him for the job.
Papp sued Stokes Economic Consulting and its president for, among other things, wrongful dismissal and defamation. The court noted that to establish a claim of defamation, Papp had to prove three things: that the impugned words would lower Papp’s reputation in the eyes of a reasonable person; they in fact referred to Papp; and they were published, meaning they were communicated to at least one person other than Papp.
While the court found Papp had proven all three elements, it also found Stokes wasn’t liable for defamation because the defences of justification (truth) and qualified privilege applied to the reference. With respect to the defence of justification, the court found the evidence at trial established Papp was, in fact, difficult to work with and didn’t work well in a team setting. The reference was, therefore, substantially true.
The court also stated that the defence of qualified privilege applies to comments given in the context of a reference check. In order to defeat that defence, Papp had to prove Stokes acted with malice when giving the reference. The court held Stokes made statements he genuinely believed to be true and had made attempts to verify the truth of them by speaking with others in the workplace. There was no malice, and the defence of qualified privilege therefore applied.
The court’s decision supports an employer’s right to give a candid reference about former employees, even where it may not be positive or helpful to the them. However, employers should make truthful statements and take steps to verify information if it isn’t firsthand knowledge. When an employer gives a negative reference, it should be ready to show it wasn’t acting with malice and instead was providing the other party with a truthful review of the former employee’s abilities.