Lies and Unemployment Compensation Proceedings - You Cannot Get Sued Again

LR-stethoscope-shtrstck-highresA typical part of a contentious employment termination matter is the inevitable unemployment compensation claim.   While a multiplicity of claims may emanate from the ugliness of job separation, the Connecticut courts continuously remind us that employers need not fear being sued for defamation for negative statements that they may make regarding a former employee during unemployment compensation hearing proceedings.

In Carter v. St. Vincent's Medical Center, 2014 WL 2257159 (Conn. Super. 2014),  the plaintiff, who was a former nursing assistant discharged for falling asleep on duty, brought suit against her former employer, along with certain managerial/supervisory employees, alleging that these defendants had “defamed” and “libeled” her during the course of proceedings before the Department of Labor on her claim for unemployment compensation benefits. Specifically, the plaintiff/former nursing assistant asserted that the various defendants made false and defamatory statements under oath, specifically, statements that the plaintiff fell asleep on the job twice in violation of uniformly enforced rules and that such a violation was due to the plaintiff's professional incompetence.

The defendants asserted these statements were absolutely privileged and thus could not provide the basis for a defamation lawsuit. The Superior Court agreed and struck the complaint.  The Court relied upon previously established case law; Petyan v. Ellis, 200 Conn. 243, 246 (1986); and noted that statements by parties and witnesses in both judicial and “quasi-judicial” proceedings are absolutely privileged, and that all of the stages of the Department of Labor’s unemployment compensation proceedings are covered by this privilege.  The Court cited the Connecticut Supreme Court’s prior command that  “the dictates of public policy require that an employer involved in an unemployment compensation proceeding be able to state candidly his or her reasons for terminating an employee as long as the employer's statement bears a reasonable relation to the purpose of the proceeding. Otherwise employers might be reluctant to respond to the employment security division at all or their reply might be colored by fear of subsequent litigation or liability.”  Petyan v. Ellis, supra, at 250–51.  The Court rejected the plaintiff’s invitation to apply a less than absolute privilege (namely, the “qualified immunity” which exists in the context of constitutional claims) to statements in unemployment compensation proceedings.

So is it OK to fib?  The courts and this author are not issuing an invitation (or recommendation) to employers and management  to lie during unemployment compensation proceedings. Indeed, there may be criminal penalties for lying under oath (and thus committing perjury) during such proceedings.  Connecticut General Statutes §§31-273 and §53a-156.  While a criminal prosecution for unemployment compensation fraud by a claimant has recently been in the news;; these criminal statutes would also apply to employers making false statements, whether the statement were made for the purpose of  increasing or decreasing a benefit.   In addition, there is the risk that if representatives of the employer make statements inconsistent with the reasons given for the employee’s termination, the employer may be creating evidence to be used against it in any ensuing wrongful termination lawsuit. See Sperry v. Post Pub. Co., 1991 WL 83997 (Conn. Super. 1991).  However, the statements made during the unemployment compensation proceedings will not in themselves provide a basis for you being sued (and being liable for damages for defamation). Thus, there is one less bullet to dodge during the termination process.

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