Philadelphia’s Commerce Court Rules Defamation Can Exist Even When Commercial Disparagement Claim Fails
This case involved a series of claims and counterclaims between commercial insurance brokers, where an employee left one and joined the other. Of interest here is the new employer and employee bringing counterclaims for defamation and commercial disparagement.
Two conversations were at issue. First, one of former employer’s board members allegedly told a client the employee was a poor team player, a poor employee and a poor performer. There was a later allegation that he described the employee as a rogue employee placed on a performance improvement plan. The second alleged incident involved the former employer’s CEO telling an industry contact the employee was on a performance plan, was not a team player, and did not perform well.
The court rejected the commercial disparagement claim because there was no pecuniary loss to the employee, and there was no disparagement of the new employer. However, the employee’s defamation claim largely survived. Significantly, unlike a commercial disparagement claim, pecuniary loss is not a requisite element of proof for defamation.
In carrying out a defamation analysis only statements of fact, not opinion, are actionable. If it is reasonably understood, however, that an opinion implies the existence of undisclosed defamatory facts, a defamation claim can still proceed. It is the court that determines whether a statement is one of opinion or fact.
Under the facts alleged, with limited exception, the defamation case was allowed to proceed. The defamation case could not go forward based on alleged statements that the employee was not a team player. As to those allegations, the former employer’s principals also allegedly stated to others that the employee would not mentor other employees or provide internal referrals. As these were disclosed statements of fact, the “not a team player” allegations were not defamatory.
As to all of the other alleged defamatory statements, however, the court allowed the former employee’s defamation action to proceed to trial, subject to any evidentiary challenges and statute of limitations arguments.