Employee Defamation Advice: Get The Receipts Before Suing

employee defamationAllstate, the insurance firm, lost a multi-million-dollar employee defamation claim. Yes, an appeal is in the works; this case is far from over. However, let’s review the suit to see what lessons it reveals, thus far.

An SEC-Related Employee Defamation Lawsuit: A Play In Seven Bullet Points

  • Plaintiffs: A group of employees fired from Allstate’s pension plan equity division.
  • Defendants: Allstate Corporation
  • Background Information: Apparently, Allstate accused four employees of manipulating stock trades and amassing bonuses that ultimately shorted the company over $200 million. The workers, however, insisted they executed their trades well within bounds, merely sticking to the age-old trading adage — “buy low, sell high.” Ultimately, Allstate fired the four employees and filed and SEC complaint.
  • Legal Claim: The employees felt the SEC complaint was erroneous and played a big part in ruining their careers.” In turn, they filed an employee defamation lawsuit.
  • Defense: In its defense, Allstate said the SEC complaint was accurate and didn’t harm the plaintiffs.
  • Court Ruling: In the end, the jury sided with the employees, ordering Allstate to pay about $27 million.
  • Main Takeaway: Be careful with post-termination paperwork and reporting. If you plan to file an SEC complaint or U-5 [LINK], make sure you have substantial supporting evidence. Play it safe and run them by an employment defamation lawyer before submitting.

5 Things To Know Before Pursuing An Employee Defamation Lawsuit

It’s true: winning a libel or slander case, in a U.S. court, isn’t easy. Plaintiffs must have rock solid arguments to walk away the winner. So, what constitutes a “rock solid” defamation case in the United States?

  1. Truth. United States defamation laws are defendant-friendly (as opposed, to, say, Canada, which has plaintiff-friendly standards [LINK]). So, to win a slander or libel claim, proof is essential! Have enough to convince a judge or jury that the defendant is lying.
  2. Prove It’s You. Believe it or not, many people lose defamation claims because they can’t prove they’re the person being referenced. This is especially prevalent in literary defamation lawsuits involving fiction works based on real life events.
  3. Harm. Harm is a primary pillar of U.S. defamation law. (The exception? Defamation per se cases, which you can read about here.) Plaintiffs must prove material harm to win a slander or libel claims. Legally speaking, “harm” isn’t just hurt feelings or a bruised reputation. Typically, defamation plaintiffs must provide evidence that their business or bank account took a hit because of the contested statements.
  4. Negligence. And lastly, to win a U.S. slander or libel lawsuit, plaintiffs must demonstrate that the defendants acted either negligently or with actual malice [LINK].

Consult With An Employee Defamation Attorney

Are you dealing with a work-related slander or libel issue? To do more research, on your own, check out additional resources here, here and here. If you’re ready to consult with a lawyer about an employee defamation issue, please get in touch.

Good luck, and may the legal force be with you.

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