I did steal, but you will pay – defamation against employees ?

I did steal, but you will pay – defamation against employees ?

Yair Aloni, Adv.
May 16, 2021

An employee stole a confidential database from the company on the eve of his dismissal. The employer sought to gather the employees and share with them the serious incident in order to strengthen the data protection practices in the firm. The employee heard about this and hurried to file a defamation claim against the employer on basis that it humiliated and degraded him. Sounds absurd? These are exactly the facts of a case in which our firm represents the employer. Is the employer exposed to a defamation lawsuit? How can one ensure that the sinner is not being rewarded?

The Prohibition of Defamation Law creates a balance between the right to freedom of expression and a person's right to reputation. When it comes to labor relations there are additional values that need be taken into account. On the one hand, it is a close work environment, where employees are together for many hours every day and the degree of familiarity may be close between one employee and another. On the other hand, it is important to act transparently in the workplace and allow the supervisor to have an open dialogue with his employees, inter alia for the purpose of conducting reviews and transmitting information relevant to employee performance without constant fear of lawsuits.

Therefore, not every expression or matter-of-fact criticism during work will be considered defamation and the question of whether an expression constitutes defamation is reviewed under to the criteria of a reasonable person. i.e., the emphasis is not on the subjective feeling of the 'victim' but on how the message is perceived by the reasonable person and what he understands "between the lines" under the circumstances. Assuming the publisher acts in good faith, the 'substantial truth' defense stands if the content of the publication is true and there is a public interest in its publication. Another defense is exists when the publication is made to protect the personal interest of the publisher or the recipient of the information.

In a case heard in March 2015, the Israeli National Labor Court held that a supervisor's statements at a staff meeting regarding a dismissed employee in which the employees were updated on the dismissal and its grounds, expressing dissatisfaction of the employee's conduct, is protected under law and is not defamatory. This is because the publication was oral, in a reasonable manner and for material reasons, including due to the need to provide an explanation for the dismissals to the other staff members and in order to stop the unrest that began and to refine the disciplinary rules.
In contrast, in another case of June, 2018, the National Labor Court rejected the defense of an employer who sent an email to company employees containing data about the dismissal of an employee and the disciplinary offenses attributed to her. The Court gave weight to the fact that the publication was widely made and in writing, as opposed to oral conversation. Similarly, in October 2020, the Tel Aviv Regional Labor Court decided in a case of an employer who sent an email to thousands of the employee's contact list members (including customers and even the employee's family members), warning from the employee. In That case the employer shared with the recipients that the employee took a trade secret of the employer, carried out unauthorized actions and even the fact that a police complaint was filed and legal measures are taken. The Court held that although the employee did breach his obligations to the employer and stole trade secrets, the publication constitutes defamation. Even if the content itself was correct, in light of the wide written distribution to numerous recipients who have no interest in the events, the publication does not serve a 'public' interest but is a pure gossip and does not meet the requirement of good faith. In that case, the employer was indeed compensated by the employee, but was also required to compensate the employee in a significant amount.

As stated, the Labor Courts tend to protect the good name of employees in the appropriate cases even if they themselves have committed serious injustices towards the employers. Therefore, employers are advised to exercise discretion and refrain, as far as possible, from disseminating publications attributing personal accusations against employees, especially when the nature of the allegations is primarily serious (such as attributing criminal offenses, serious disciplinary offenses, etc.).

However, each case must be considered on its own merits as it is the right of an employer to share with employees data of what is happening in the firm, especially when it is done for legitimate reasons to prevent unrest, refine security procedures and maintain the firm's performance and continued proper operation. Due to the difference between the cases it is important to consult a lawyer before any publication, in order to ensure that the publication is done in a reasonable manner that provides protection under law.