California employers beware. In Tilkey v. Allstate Insurance Co., No. D074459 (Cal. Ct. App. Apr. 21, 2020) (Order), California’s Fourth District Court of Appeal recently affirmed a judgment on a theory of self-published defamation. In doing so, it held that the plaintiff, a former life insurance salesman for Allstate, was justly awarded damages based on his compulsion to recite the allegedly false allegations Allstate made for terminating his employment to prospective employers.

As set forth in the Order, having worked for Allstate Insurance for thirty years, Tilkey was fired after disclosing that he had been charged but not convicted for domestic violence against his then-girlfriend, Jacqueline Mann. Ultimately, the charges were dropped. However, prior to dismissal of all charges, Allstate terminated Tilkey’s employment, citing to violations of company policy in the form of “[t]hreats or acts of physical harm or violence to the property or assets of the Company, or to any person, regardless of whether he/she is employed by Allstate.” Order at 6 (internal quotation marks omitted). Allstate reported the reason for Tilkey’s termination on a Form U5, which was obtainable by any company that could hire for the type of role Tilkey had at Allstate. Tilkey sued Allstate for wrongful termination and compelled self-published defamation to prospective employers. The jury, following trial, returned a verdict in favor of Tilkey.

Judge Huffman of the Court of Appeal referred to the general rule that a valid defamation claim requires the publication be done by the defendant. In characterizing the exception to this rule, he defined the idea of compelled self-published defamation. As laid out in Live Oak Publishing Co. v. Cohagan (1991), 234 Cal. App. 3d 1277, 1284, compelled self-published defamation can be found “when it [is] foreseeable that the defendant’s act would result in [a plaintiff’s] publication to a third person” (internal quotation marks omitted). Order at 21. “For the exception to apply, the defamed party must operate under a strong compulsion to republish the defamatory statement, and the circumstances creating the compulsion must be known to the originator of the statement at the time he or she makes it to the defamed individual.” Id. at 22 (citing Beroiz v. Wahl (2000), 84 Cal. App. 4th, 485, 497); Davis v. Consolidated Freightways (1994), 29 Cal. App. 4th, 354, 373 (Davis); Live Oak Publishing, at p. 1285; McKinney v. County of Santa Clara (1980), 110 Cal. App. 3d, 787, 796).

Analyzing the theory of “compelled self-published defamation per se,” the Court of Appeal rejected Allstate’s claim that the doctrines of defamation per se and self-defamation were incompatible. Allstate also attempted to argue that the judgment should be reversed on the basis that there had been only one published case (McKinney, 110 Cal. App. 3d, 787), in which a compelled self-publication claim had survived summary judgment. Furthermore, Allstate argued, the case relied on out-of-state cases and possessed a unique set of facts. The California Court of Appeal, however, was not persuaded and found similarity between the set of facts in McKinney and those in the case at hand. Additionally, Judge Huffman rejected Allstate’s claims that the statements were privileged.

The Court assessed the specific facts of the case in explaining why substantial evidence supported the jury findings that Tilkey was compelled to self-publish statements that were not substantially true. The Court agreed that Tilkey would necessarily have to explain the circumstances behind his termination at Allstate, as job applications ask for such information. The Court further affirmed the defamatory nature of the statements by finding it highly unlikely that an employer in the industry would hire anyone whose U5 forms listed termination for cause.

Last, the Court turned to Allstate’s claim that its statements regarding Allstate’s basis for Tilkey’s termination were substantially true, a claim that, if upheld, would be a complete defense against civil liability, as is the case with traditional defamation. The Court disagreed, however, finding that the conduct at issue was disruptive behavior and that the “facts [did] not include evidence that Mann was ever directly threatened; nor [did they] indicate that Tilkey was threatening to physically harm Mann…” Id. at 32. Judge Huffman ultimately affirmed the finding that Allstate was liable for defamation and punitive damages but remanded for reassessment of the “proper amount of punitive damages against Allstate based on the defamation cause of action.” Id. at 49.

Despite the Court’s ruling, Allstate’s argument that there is a lack of extensive case law affirming self-published defamation is appreciable. While Courts have acknowledged self-published defamation as an exception to the traditional defamation requirements since 1890, states have been hesitant to apply the theory in the context of an employee reproducing the defamatory statements of a former employer to a third party. See Allen v. Wortham, 89 Ky. 485, 13 S.W. 73, 73 (1890) (where plaintiff’s illiteracy compelled him to have allegedly defamatory statements read by a third party). Courts, such as the Massachusetts Supreme Judicial Court in White v. Blue Cross and Blue Shield of Massachusetts Inc., 442 Mass. 64 (2004), have declined to recognize the theory of compelled self-published defamation out of fear of the unpredictable impact such an affirmation could have on at-will employment, among other policy concerns. It is for these reasons that the ruling at hand is all the more significant. Employers would be wise to take note of this decision in establishing protocol with respect to employee terminations.