When you fire an employee for misconduct, even if it’s for an egregious incident that occurred in public, you still need to be careful who you talk to about it both inside and outside your company. The case of former Golden State Warriors basketball player Latrell Sprewell illustrates how an employer whose termination of an employee was justified can still end up defending against a defamation charge in court.
Sprewell Fired For Attacking Coach
Three-time all-star Sprewell began playing for the Warriors in 1992 but by 1997 his relationship with coach P.J. Carlesimo was so strained that both Sprewell and the Warriors were considering his trade. Then, in an altercation, Sprewell put his hands around Carlesimo’s neck and threatened to kill him. After being restrained, Sprewell went to the locker room but shortly returned to the court where he punched Carlesimo and again threatened his life.
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The Warriors immediately suspended Sprewell for 10 games and two days later terminated his $32 million contract. After its own investigation, the National Basketball Association suspended Sprewell for one year—the longest suspension in NBA history. During the media frenzy that followed, sports commentators across the country pilloried Sprewell. Converse canceled its endorsement contract with him although the company had at first said it wouldn’t. Sprewell apologized for his behavior, saying he knew it was “not appropriate in society or in professional sports,” and appealed his suspension. He requested arbitration, which resulted in his contract being reinstated and his NBA suspension limited to the 1997- 1998 season.
Defamation Claims Allowed
However, Sprewell was not satisfied and filed a lawsuit in federal court against the Warriors and the NBA. After the district court dismissed all his claims, Sprewell appealed. Now, in a new decision, the Ninth Circuit Court of Appeals has upheld the dismissal of Sprewell’s claims challenging the arbitration and alleging racial discrimination. However, the court ruled that Sprewell could go forward with state law claims that the Warriors and the NBA defamed him by instigating a negative media campaign that interfered with his economic relationships. Federal labor law didn’t preempt these claims, the court said, because they were unrelated to the collective bargaining agreement covering Sprewell. The court similarly gave the green light to Sprewell’s claims of unfair business practices and civil conspiracy to interfere with his contract and business relationships.
Avoiding Defamation Claims
Sprewell’s defamation claims allege substantial damages related to lost endorsements as a celebrity—a scenario most employers won’t ever have to deal with. But you have to be careful what you say—and to whom—about an employee’s discipline or termination to avoid defamation charges. Here are some pointers:
- Thoroughly document your investigation of alleged employee misconduct. Take all necessary steps to be certain that misconduct allegations are true before taking action.
- Limit disciplinary action discussions to those who need to know. Let supervisors know they should not discuss disciplinary matters with other workers because they could be liable for repeating defamatory comments, possibly even if they believe them to be true. Don’t discuss the matter with anyone outside the company. If public comment is necessary, a designated spokesperson should handle it.
- Formulate a strategy to deal with reference requests from prospective employers. To be safe, just verify the person’s employment. However, if you have solid evidence that the person might be dangerous, you may want to refer the inquirer to an independent source of information. For example, if the person has been arrested, you could suggest contacting the law enforcement agency.