Questions to ask when employees are disparaged by outsiders

7/27/2019 Questions to ask when employees are disparaged by outsiders

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Questions to ask when employees are disparaged by outsiders

by Dan Michaluk, Hicks Morley1

The rapid expansion of the Internet coupled with the surging popularity of socialnetworking services like Facebook and Twitter has created a situation where everyone is apotential publisher, including those unfamiliar with defamation law. A reputation can bedestroyed in the click of a mouse, an anonymous email or an ill-timed Tweet.

Bryan G. Baynham, Q.C., and Daniel J. Reid, The Modern-Day Soapbox: Defamationin the Age of the Internet2

The workplace is no refuge from the dark side of the internet. Employees are oftendisparaged online by people who they contact in the course of work and who areoutsiders former employees, students, parents and others who do not owe theiremployers duties under an employment contract or collective agreement. Facing thewrath of an angry and often unstable outsider, employees turn to their employers forhelp. Just make them stop! they cry.

What are employers to do?

This paper responds to this general question by setting out and discussing a number ofspecific legal and practical questions that are relevant to any outsider defamationscenario:

Who is being defamed? Whose interests are most affected?

Is there a duty to help? If so, what does that duty entail?

What are the implications of getting involved in the takedown process?

Is direct engagement or indirect engagement most likely to lead to quick and costeffective resolution?

Is a funding arrangement appropriate and lawful?

Assuming the employer has been defamed, is it nonetheless precluded fromseeking a remedy in court?

1 Partner and Chair (Information Management and Privacy Group). With valued input from my partner,Ian Dick, a frequent collaborator on these difficult issues.

2 In Defamation Law: Materials prepared for the Continuing Legal Education seminar, Defamation Law 2010.Vancouver: Continuing Legal Education Society of British Columbia, 2010 at 3.1.1.


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These questions are important. Employers faced with outsider defamation scenariosshould give them careful consideration and proceed strategically. Too often, contemptfor the outsider and sympathy for the employee governs. Too often, employers takeseemingly simple steps without appreciating their potential consequences. Thediscussion below is meant to enable a greater understanding of the relevant issues so

employers find the optimal way to manage a very complex problem.

Who is being defamed? Whose interests are most affected?

Defamation is an invasion of a persons interest in his or her reputation.3 Defamationplaintiffs seek vindication through the civil trial process and claim at large damagesthat incorporate subjective, intangible elements.4

Defamation is a personal tort.5 That is, it is a claim based on a wrong to a personalinterest rather than a proprietary interest. This characteristic has both legal and practical

consequences for employers facing outsider defamation scenarios.

Legal consequences. An employer has no standing to sue in defamation for harm done toan employees reputation.6 It must allege harm to its own business reputation adistinct kind of reputation at law.7 Statements made about employees, even if related totheir work, will not necessarily defame an employer.

Consider, for example, Church of Scientology of Toronto v Globe and Mail.8 The OntarioHigh Court of Justice struck a claim brought by the Church that alleged it was libeledby the Globe and Mail for its publication of an editorial that included the followingstatement:

The Ontario Medical Association Counsel said yesterday some of its psychiatristmembers were concerned when told Scientologists had been offering passers-byon Avenue Road personality profiles. The psychiatrists felt this constitutedpracticing medicine without a license.9

The Court held that the Globes publication reflected only upon the Churchs individualmembers and not the Church itself, particularly in light of pleadings that alleged the

3 Walker v CFTO Ltd, 1987 CanLII 126 at 6 (ON CA).

4 Ibid.

5 Bai v Sing Tao Daily Ltd, 2003 CanLII 24013 at para 10 (ON CA).

6 See Raymond E Brown, The Law of Defamation in Canada, 2nd ed, loose-leaf (consulted on 10 July 2013),(Toronto, Ont: Carswell, 1999) at 18-89.

7 Ibid., at 18-85.

8 [1978] O.J. No. 3281 (Ont HCJ) (QL) (Scientology).

9 Ibid., at para 3.


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defamation was made for the purpose of causing the plaintiff [the Church] to be fined,imprisoned or both.10 The Churchs members needed to sue on their own behalves.

Scientology demonstrates that employer standing will not necessarily arise from a simplelink between the offending publication and an employees job duties; standing is based

on the precise meaning of the publication and its affect on an employers ownreputation. Although this analysis is very nuanced, in Protecting the Reputation ofCorporate Personnel, Organs and Associates, Fiona Patfield suggests that employers aremore likely to have standing for attacks on employees:

1. in their capacity as corporate personnel or associates;

2. in a way which reflects on the trading reputation of the employer; and

3. in respect of a state of affairs for which the company is in some wayresponsible.11

With attention to these three categories and by pleading carefully, employers may makea valid claim in defamation for publications that describe the actions of their employeesand adversely affect both employer and employee.12

Practical consequences. The existence of legal standing, however, does not mean that it isappropriate or advisable to launch an employer action in defamation, particularly ifemployer interests and affected employee interests are not highly aligned. An employermay be quite prepared to bring a defamation action in its own name while the one ormore employees who have been targeted want no part in an action that risks inviting a

trial of their individual reputations. In managing outsider defamation scenarios,employers must develop a strong understanding of the separate interests at stake andbe sensitive to the potential for conflict between their employees independent interestsan their own.

Is there a duty to help? If so, what does that duty entail?

Often, an employer is content to ignore or monitor an outsiders online activity whileaffected employees press for any and all legal action necessary to cause the publicationto be taken down from the internet. For the reasons described below, in most cases it

will be very difficult for an affected employee to establish an employer duty to pursuetakedown by commencing or supporting a legal action in defamation.

10 Ibid., at para 6.

11 18 UW Austl L Rev 203 1988 at 219.

12 See e.g. Kenora (Town) Police Service v Savino (1995), CPC (3d) 46 (Ont GD) and St Michael's Extended CareCentre Society v Frost (1994), 18 Alta LR (3d) 65 (QB).


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Indemnification rights in employment contracts and collective agreements typicallyonly contemplate indemnification for the burden of defending claims arising out ofemployment. A contractual right to funding for commencement of a legal claim wouldbe atypical and would raise public policy issues that are addressed by the prohibitionon champerty and maintenance.13

The more likely source of an employer duty to address outsider defamation ofemployees is the duty to provide a safe and harassment-free workplace. The ease inwhich this duty will be engaged by outsider defamation was recognized by The PublicService Grievance Board (of Ontario). In Ministry of Community Safety and CorrectionalServices. The Board dismissed a complaint by managers that alleged an inadequateemployer response to disparaging publications on an Ontario Public Service EmployeesUnion blog.14 Vice-Chair ONeil said:

In general, as a matter of common sense, I accept that a significant stream ofdisrespect coming from co-workers or those with opinions about the workplace,

whether at work, in social situations, or on-line, will likely impact the workplace,often insidiously, because it is hard to measure and any particular example maybe fleeting or hard to attribute to any particular author. 15

The resulting employer duty, Vice-Chair ONeil explained, is to take reasonablesteps.16 She held that the Ministry had taken such steps by issuing jointcommunication with the union that laid the foundation for discipline, followingwhich the offending blog was made password-protected but not taken down. Vice-Chair ONeil further held that the Ministry was not required to discipline employees ortake any particular action in response to the OPSEU blog. She said:

In respect of providing a harassment-free workplace, it is important toacknowledge that it is not humanly possible to prevent all behaviour thatamounts to harassment, defamation or disrespectful behaviour towardsemployees. There are very real limits to the power of an employer to anticipateand control such behaviour even in the workplace, let alone outside its physicalbounds. In recognition of this reality, the law does not make the employerresponsible for all actions of its employees that have a negative impact on otheremployees. In the area of harassment in the workplace, arbitral case law has

13 As discussed in Part 5 (on funding arrangements) below.

14 Lee v Ontario (Ministry of Community Safety and Correctional Services), 2013 CanLII 4672 (ON PSGB)(Ministry of Community Safety and Correctional Services).

15 Ibid., para 53.

16 Citing Fleet Industries v International Assn. of Machinists and Aerospace Workers, Local 171 (H. Grievance),[1997] O.L.A.A. No. 791 (M. Picher) (QL) at para 52, Worthington Cylinders v United Steelworkers of America,Local 9143 (Gamba Grievance), [2001] O.L.A.A. No. 649 (Tacon) (QL) at para 150, Ontario Public ServiceEmployees Union (Tardiel) v Ontario (Community Safety and Correctional Services), 2010 CanLII 81917 (ONGSB) at para 132.


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generally found, in the absence of a contractual provision requiring it to takeparticular action, that an employer will not be held liable unless it has beennegligent or fails to act.17

This forgiving perspective on the reasonable steps requirement is important given the

difficulty inherent in causing outsiders (who are not subject to employers authority) totake down communications from the internet. There are a variety of measuresemployers can take to support employees who are suffering workplace harms fromoutside communications short of bringing (or funding) an action in defamation.Providing counseling support or issuing internal, supportive communications, forexample, are consistent with an employers role and the duty to provide a safe andharassment free workplace.

To require employers to pursue a takedown when there are other ways to remedyworkplace harms is to suggest that employers have a duty to help employees vindicatetheir reputations a duty inconsistent with the personal nature of a defamation claim

and a duty that has not been recognized.18

What are the implications of getting involved in the takedown process?

Although there is no recognized employer duty to protect an employees reputation,many employers feel compelled to take some steps to remove the offendingcommunications from the internet. While such action may sometimes be justified,employers should understand that any degree of involvement in a matter of personaldefamation may invite reliance and significant prejudice to affected employees.

First, defamation actions are subject to short limitation periods, especially short if thepublication can be framed as a publication in a newspaper or broadcast. 19

Employer engagement may engender reliance that causes an employee to miss alimitation period.

17Ministry of Community Safety and Correctional Services, supra, at para 54. Vice-Chair ONeil finds that thisprinciple applies notwithstanding the duty in section 25(2)(h) of the Ontario Occupational Health and Safety

Act to take every precaution reasonable in the circumstances for the protection of a worker: para 67.

18

See Tipple v Canada (Attorney General), 2012 FCA 158 (CanLII) at para 17. (The Federal Court of Appealawarded Wallace damages for terminating an employee embroiled in public controversy on a not forcause basis without taking steps to protect the employee from reputational harm, but the Court suggeststhat there is no free-standing duty to protect reputation.) See also Canada (Attorney General) v Tipple,2011 FC 762 (CanLII) at para 76.

19 There are complexities related to the application of limitation periods to internet publications that arebeyond the scope of this paper. For an excellent discussion of the issues see David A Potts, Cyberlibel:Information Warfare in the 21st Century? (Toronto: Irwin Law, 2011) at 75-88. See also Shtaif v Toronto LifePublishing Co Ltd, 2013 ONCA 405 (CanLII).


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Second, employer engagement will likely deprive affected employees of a dedicated,strategic approach to removing the offending publication. Employers most oftencommit to taking a single step in the takedown process often by writing a demand onaffected employees behalves. If a demand is unsuccessful and an employer is unwillingto follow through with legal action, the affected employees position will be harmed.

Third, employer engagement may invite more backlash than invited by employeeengagement. Actions by corporations for defamation are often criticized as improperlymotivated and as an unfair exercise of economic might. Although employers mayattempt to deflect criticism by framing their actions as being taken for the benefit ofemployees, such messaging may not be effective and could establish a dangerousprecedent.20

Employers ought to recognize that there are significant implications associated withoffering assistance with the takedown process and reasons to remain at arms length.Employers that feel compelled to offer some help but that are not prepared to providefull support should consider the reliance their actions will invite. In most cases,agreeing to reimburse the employee for an initial consultation with independent legalcounsel is a preferable option.21

Is direct engagement or indirect engagement most likely to lead to a quick and costeffective resolution?

If engagement is warranted, the approach should be strategic, with a view to achievingquick and cost effective resolution. Against this objective, employers that have chosen

to address outsider disparagement should weigh the merits of engaging directly withthe outsider and attempting to achieve takedown through indirect means.

Direct engagement with an outsider ordinarily starting with a takedown demand and athreat of legal action requires commitment. Very strong engagement from the startmight lead to an early takedown and resolution, but if not, employers will face thestrong bias against the granting of interlocutory relief in defamation actions.22 Based on

20 We discuss St Lewis v Rancourt, 2013 ONSC 1564 (CanLII) below in addressing the issue of champerty.Note that the University of Ottawa was careful to note the atypical circumstances that led it to offerfunding for a professors defamation action (at para 15), likely to minimize the precedential effect of its

funding decision.21 Experienced defamation counsel will likely give employees a frank description of the significant risksand personal costs of pursuing a defamation action. See generally Roger D. McConchie and David A.Potts, Canadian Libel and Slander Actions, (Toronto: Irwin Law, 2004) at ch 2 (Defamation Actions to Avoid)and ch 3 (Should you sue?).

22 Anti-discrimination legislation may provide a somewhat more expeditious avenue for relief, but theexpression must be proscribed by the applicable statute. In Taylor-Baptiste v Ontario Public ServiceEmployees Union, 2012 HRTO 1393 (CanLII), for example, the Human Rights Tribunal of Ontario held thatsexist comments made about a manager by a union president and others on a union blog were not


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judicial respect for a defendants freedom of expression and right to trial by jury,23 acourt will only provide interlocutory relief if the words in question are so clearlydefamatory and so obviously impossible to justify that the verdict of a jury accepting aplea of justification as a defence would of necessity have to be set aside as a perversefinding on appeal.24

The restricted availability of interlocutory relief in a defamation action is a significantconstraint associated with a direct engagement strategy. Many outsiders are angry,many are mentally ill, many have few assets to risk in a civil dispute and many chooseto represent themselves; the incorrigible outsideris a reality. When dealing with such acharacter, employers must be prepared to back up the threat of action set out in aninitial demand with demonstrated action well into the litigation process. This oftenundermines the quick and cost effective resolution objective.

Indirect engagement. Attempting takedown by contacting a service provider that ishosting the publication (an intermediary) or the police instead of the outsider couldlead to a quick and cost effective resolution, but the chances of succeeding with thistype of indirect and less confrontational strategy are limited.

Intermediary liability in Canada is governed by the common law. An intermediary maybe liable in defamation if it is a publisher a concept recently delineated by theSupreme Court of Canada in Crookes v Newton.25 The majority in Crookes held that thepublication of a neutrally-worded hyperlink that directs internet users to a defamatoryposting is not a defamatory publication itself.26 The majority stressed that anintermediary only should be treated as a publisher if it has control over both thecontent and whether the content will reach an audience at all.27

It remains to be seen how the publication rule crafted by the Supreme Court of Canadain Crookes will apply to the wide variety of internet services provided by intermediaries,though it clearly leaves significant scope for intermediary liability. Intermediaries may

proscribed by the Ontario Human Rights Code, noting (at para 40) There were no Code-basedreverberations in the workplace and the applicants principal concern was about the bringing of herpersonal life into the workplace. Compare, Perez-Moreno v Kulczycki, 2013 HRTO 1074 (CanLII), wherethe Tribunal held that an individual violated a mangers right to be free from discrimination by posting adiscriminatory message on his Facebook.

23 Holley v Smyth, [1998] 1 ALL ER 853 at 862 (CA Eng).

24 Canada Metal Co v Canadian Broadcasting Corp (1975), 7 OR (2d) 261 at para 3 (Div Ct), cited recently inAsselin v McDougall, 2013 ONSC 1716 (CanLII) at para 30. But see Henry v Stockhouse Media Corp, [1999]BCJ No 3203 at paras 8 and 13 (SC) (anonymous nature of express weighs in favour of interlocutoryinjunction) and McLeod (Maslak Mcleod Gallery) v Sinclair, 2008 CanLII 67901 at paras 36-41 (ONSC) (orderto post public notice of dispute granted in lieu of takedown).

25 Crookes v Newton, 2011 SCC 47, [2011] 3 SCR 269 (Crookes).




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therefore react positively to a takedown demand in order to avail themselves of theinnocent publication defence.

The innocent publication defence is available to subordinate distributors who canshow that they have no knowledge of an alleged libel, are aware of no circumstances

to put them on notice to suspect a libel and committed no negligence in failing to findout about the libel.28 It was recently applied in the context of online disparagement bythe Court of Appeal for British Columbia in Carter v B.C. Federation of Foster Parents

Association, a case in which the defence failed because the administrator of an onlineforum did not respond to a takedown demand.29

Carterillustrates that there is a sound legal basis for compelling intermediaries toremove disparaging content from their websites. Regardless, pursuing takedownthrough an intermediary is a very limited remedy in practice; the offending contentmay simply migrate to internet sites controlled by other intermediaries, includingintermediaries operating entirely outside of Canada. There is no guarantee thataddressing an outsider by contacting an intermediary will not lead to a time consumingand expensive exercise of internet Whac-a-Mole.30

Another indirect engagement tactic is to contact the police. Though employers oftenhesitate to seek police assistance in addressing internal matters because policeinvolvement can cause a loss of control over an internal investigation, loss of control isnot risk associated with seeking police assistance with an outsider defamation scenario;employers have little control over these matters to start. A warning by the police mayalso have a significant positive effect.

The police, however, are likely to be interested in a limited range of behavior, in partbecause of the legal context surrounding the two Criminal Code defamation offences.

The simple criminal libel offence31 has been ruled to be unconstitutional in Alberta,32

Saskatchewan,33 Ontario34 and Newfoundland.35 This has cast such doubt on thevalidity of the provision that, in 2012, after Fredericton police laid libel charges against a

28 Crookes, supra, para 20.

29 2005 BCCA 398 (CanLII) (Carter).

30 See Whac-a-Mole online: Wikipedia .

31 Criminal Code, RSC, 1985, c C-46, s 301.

32 R v Finnegan, [1992] AJ No. 1208 (QB).

33 R v Lucas, 1995 CarswellSask 130 (QB).

34 R v Gill, 1996 CarswellOnt 1314 (Gen Div).

35 R v Byron Prior, 2008 NLTD 80 (CanLII).


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blogger who made comments about a police officer, the New Brunswick JusticeDepartment dropped the charges with reference to the prevailing case law.36

The aggravated criminal libel offence survived a constitutional challenge at theSupreme Court of Canada in 2011.37 It is narrow, however, and proscribes the

publication of a defamatory libel that one knows is false.38

Given this context, it is not surprising that criminal defamation charges are rare.

The police are more likely to respond to behavior that resembles criminal harassment knowing or reckless prescribed conduct that causes a person (responding reasonably inall the circumstances) to fear for his or her safety or the safety of anyone known to himor her. The prescribed conduct includes:

(a) repeatedly following from place to place the other person or anyoneknown to them;

(b) repeatedly communicating with, either directly or indirectly, the otherperson or anyone known to them;

(c) besetting or watching the dwelling-house, or place where the otherperson, or anyone known to them, resides, works, carries on business orhappens to be; and

(d) engaging in threatening conduct directed at the other person or anymember of their family.39

In light of this definition, police assistance may only be forthcoming in outsiderdefamation scenarios that are associated with more than mere reputational harm. Thisis suggested by the Department of Justices handbook for police and crown prosecutors,which states, One of the biggest distinguishing factors in determining whethermalicious use of technology consists of criminal harassment in bullying-type cases willbe whether the online conduct is merely annoying, or whether it causes the target tofear for his or her physical or psychological safety.40

36 Grant Bucker, Rare criminal libel charge against Fredricton blogger dropped (10 May 2012), online: J-Source .

37 R v Lucas, 1998 CanLII 815 SCC.

38 Criminal Code, supra, s 300.

39 Ibid., s 264(2).

40 Department of Justice Canada, A Handbook for Police and Crown Prosecutors on Criminal Harassment ,(Ottawa: Department of Justice Canada, 2012) at 19.


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Is a funding arrangement appropriate and lawful?

If an employer feels that providing an affected employee with assistance is warranted, itmay do so by way of an agreement to fund the employee for some or all of the costs ofpursuing an action as an alternative to joint engagement.

Proceeding by way of a funding arrangement:

May save time and energy associated with being on the front lines of an action

May lead to an action that is better framed (i.e., as being about harm to anindividuals reputation)

May be perceived more favorably by the public

Employers that are interested in providing employees with funding should be aware ofthe risks they may face because they are not in direct control over the action and shouldbe aware of their exposure to uncertain and potentially substantial costs. Limitations tosupport and other protections may be bargained, though it may be difficult to reconcilean employers desired limitations and protections with the principle that justifies theemployers support and with the degree of independence that must be reflected in alawful funding arrangement.41

The legal restrictions on funding arrangements (under the law of champerty andmaintenance) are another reason for employers to be cautious. In St Lewis v Rancourt, for

example, the University of Ottawa agreed to fund the legal costs of a defamation actionbrought by a professor who had issued a report exonerating the University from anallegation of systemic racism and who the defendant referred to in a blog post as theUniversity Presidents house negro.42 The professor approached the University andsaid that she had to sue the defendant.43

The University gave two reasons for offering the professor its support:

The defendants defamatory remarks about the professor were occasioned bywork, which she had undertaken at the request of the University and in thecourse of her duties and responsibilities as an employee of the University; and

41 See Metzler Investment GMBH v Gildan Activewear Inc, 2009 CanLII 41540 (ON SC) (in which Leitch J.objected to various provisions of a commercial funding agreement in light of their impact on theplaintiffs independence in managing the litigation).

42 2013 ONSC 1564 (CanLII).

43 Ibid. (The words had to sue are used by the Court at paras 5, 14 and 100.)


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The defendants racist attack upon the professor took the case out of the ordinaryand created a moral obligation for the University to provide support for aprofessor in defence of her reputation.44

In dismissing the defendants motion to strike the action because it was based on an

allegedly unlawful funding arrangement the Ontario Superior Court of Justice notedthat the professor would have pursued her action without the Universitys support, thatthere was no agreement that the University would share in the proceedings and that theabove-noted purpose for providing support was proper.45 The Court concluded:

...St. Lewis was an employee and made her own decision to commence a libelaction to defend her reputation and the University, as her employer, agreed topay for her legal costs because her reputation was damaged in the course of heremployment. I find that the University had a legitimate reason for assisting St.Lewis and there is no evidence that the University agreed to fund St. Lewis libelaction for an improper purpose or based on an improper motive.46

Providing employer support to employees who are disparaged by outsiders out of asense of duty (moral or otherwise) is therefore legitimate, though in each case all thecircumstances relating to the funding arrangement will be open to judicial scrutiny. Acourt will exercise this scrutiny with a view to distinguishing legitimate support foraccess to justice from officious intermeddling or stirring up strife. 47

Assuming the employer has been defamed, is it nonetheless precluded from seekinga remedy in court?

An employer that has been defamed by an outsider and who has standing to sue in itsown name should consider two particular bases by which an action may still beprecluded: (1) preclusion based on the absolute privilege enjoyed by a citizen whoelects to criticize government and (2) preclusion based on the Weberdoctrine ofexclusive arbitral jurisdiction.

Government actions. Courts in British Columbia and Ontario have held that statementsabout a democratically elected government are subject (at common law) to absoluteprivilege and may not form the basis of a defamation lawsuit.

44 Ibid., para 15.

45 Ibid., paras 86, 93 and 96.

46 Ibid., para 93.

47McIntyre Estate v Ontario (Attorney General), 2002 CanLII 45046 (ON CA) at para 27. See Whitcombe vManderson, 2009 CanLII 72030 (ON SC) for a case in which the Ontario Superior Court of Justice refusedto strike a defamation action because it was funded by a Charter-bound and democratically-electedmunicipal government.


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The Weberdoctrine has also been applied to preclude defamation actions by employees,though the context in each case will govern.55 In Johnston v Anderson, for example, theCourt of Appeal for British Columbia treated a group of employees who wrote aderogatory newsletter about a manager as outsiders because they prepared thenewsletters on their own time from home and made an attack on the manager that the

Court characterized as personal rather than work-related.56 In this context the Courtallowed the managers action to proceed.

Conclusion

The above discussion illustrates the complexities that employers face in addressingoutsider defamation scenarios. Although this paper sets out various costs and risks toemployer engagement with outsiders and argues that employers likely have no duty toengage, it does not prescribe tolerance as the single acceptable strategy nor does itsuggest that an employers sense of moral duty to employees is misplaced. Employers

should treat every outsider defamation scenario in accordance with its context, therelevant moral or ethical imperatives and all the detailed legal considerations set outabove.

September 4, 2013

55 See e.g. Venneri v Bascom, 1996 CanLII 7972 (ON SC) and Richards v Catney, 2005 CanLII 45403 (ON CA).

56Johnston v Anderson, 1999 BCCA 66 (CanLII) at paras 2 and 12. (It is questionable whether this judgmentis consistent with current notions about the scope of an employers duty to provide a safe andharassment-free work environment.)

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Questions to ask when employees are disparaged by outsiders