White v. Blue Cross & Blue Shield of Massachusetts, Inc.

Marshall, C.J.

Roy Albert White, a former employee of Blue Cross and Blue Shield of Massachusetts, Inc. (Blue Cross), commenced an action in the Superior Court seeking to hold Blue Cross hable for allegedly defamatory statements made to White while he was employed by Blue Cross and subsequently communicated by White to prospective employers. A Superior Court judge allowed Blue Cross’s motion to dismiss for failure to state a claim for which relief can be granted because White conceded that Blue Cross had not communicated the defamatory statements to any third party. Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974). White appealed, and we transferred the case here on our own motion to consider whether we should recognize the doctrine of compelled self-publication defamation.¹ We decline to do so, and affirm the judgment.

1. Background. As alleged in his complaint,² White was previously employed as a “quality initiatives manager” for Blue Cross. In January, 2002, he attended a meeting with representatives of Milton Hospital and Winchester Hospital to plan a conference for a health care financial management association.

On March 19, 2002, White was called to a meeting with Patrick Cuniff, Blue Cross’s director of human resources, and Allen Hinkle, its vice-president of innovation, quality, and cost. Hinkle informed White that a complaint had been received from Winchester Hospital to the effect that White, while in the presence of representatives from the other hospitals, had divulged the details of a confidential financial settlement between Blue Cross and Winchester Hospital. Hinkle told White he would be discharged immediately because of this conduct. White denied the accusation, and claims that he did not even know about any settlement between Blue Cross and Winchester Hospital, let alone divulge its details to anyone. Despite White’s request that Blue Cross investigate the matter further, Cuniff did not do so, allegedly acting on the advice of a lawyer.

White subsequently applied for numerous jobs in health care management, to no avail. This was predictable, he alleges, because most prospective employers inquired about his reason for leaving Blue Cross. Because he refused “to lie,” he was “compelled,” he says, to reveal that he was discharged “for allegedly disclosing confidential financial information.”

As noted earlier, White does not claim that Blue Cross communicated the alleged defamatory statements (the accusation that he improperly divulged confidential information) to any third person.³ He argues that his own disclosure of Hinkle’s accusation to prospective employers permits him to recover from Blue Cross for defamation because such disclosure should have been reasonably foreseeable by Blue Cross.

2. Discussion. To prevail on a claim of defamation, a plaintiff must establish that the defendant was at fault for the publication of a false statement⁴ regarding the plaintiff, capable of damaging the plaintiff’s reputation in the community, which either caused economic loss or is actionable without proof of economic loss. See Ravnikar v. Bogojavlensky, 438 Mass. 627, 629-630 (2003). See also Restatement (Second) of Torts § 558 (1977). The publication element of defamation requires that the defendant communicate the defamatory statement to a third party. Id. at 629; Hiles v. Episcopal Diocese of Mass., 437 Mass. 505, 519 (2002). Some courts, however, have recognized compelled self-publication as an exception to that requirement. Self-publication claims have arisen most frequently in the employment context where, as here, a discharged employee is called on to explain to prospective employers the circumstances of his discharge. See 1 R.D. Sack, Libel, Slander, and Related Problems § 2.5.2, at 2-81 — 2-82 (3d ed. 1994 & Supp. 2003). See also McKinney v. County of Santa Clara, 110 Cal. App. 3d 787, 795-796 (1980); Theisen v. Covenant Med. Ctr., 636 N.W.2d 74, 83-85 (Iowa 2001); Grist v. Upjohn Co., 16 Mich. App. 452, 483-484 (1969); Lewis v. Equitable Life Ins. Soc’y, 389 N.W.2d 876, 886-888 (Minn. 1986). The exception to the requirement of third-party publication is warranted, it is reasoned, because of “the strong causal link between the actions of the [employer] and the damage caused by the republication.” McKinney v. County of Santa Clara, supra at 797.

Recognition of the doctrine of compelled self-publication defamation is far from unanimous. Some State courts of last resort have rejected it. See Gore v. Health-Tex, Inc., 567 So. 2d 1307, 1308-1309 (Ala. 1990); Cweklinsky v. Mobil Chem. Co., 267 Conn. 210, 226 (2004); Gonsalves v. Nissan Motor Corp. in Haw., 100 Haw. 149, 171-173 (2002); Sullivan v. Baptist Memorial Hosp., 995 S.W.2d 569, 571-574 (Tenn. 1999); Lunz v. Neuman, 48 Wash. 2d 26, 33 (1955).⁵ This is also the view of the Restatement. Restatement (Second) of Torts § 577 comment m (1977) (rejecting self-defamation except where plaintiff repeats statement but is unaware of defamatory nature).⁶ On the other hand, the highest courts of four States have adopted the doctrine. See Theisen v. Covenant Med. Ctr., Inc., 636 N.W.2d 74, 83-84 (Iowa 2001); Lewis v. Equitable Life Assur. Soc’y, 389 N.W.2d 876, 886-887 (Minn. 1986)⁷; Overcast v. Billings Mut. Ins. Co., 11 S.W.3d 62, 70 (Mo. 2000); Hedgepeth v. Coleman, 183 N.C. 309, 313-314 (1922).⁸ After a Federal District Court predicted that the Supreme Judicial Court of Maine would adopt the doctrine, Carey v. Mt. Desert Island Hosp., 910 F. Supp. 7, 11-13 (D. Me. 1995), the court declined to reach the question. Cole v. Chandler, 752 A.2d 1189, 1193 (Me. 2000).⁹

White acknowledges that some appellate authority counsels against his argument, but invites us to adopt the doctrine of compelled self-publication where the employee claims that the employer knew or should have known that the defamatory statement was false. We conclude that, even in these circumstances, adoption of the doctrine is ill-advised. We recognize the conundrum faced by discharged employees who are required by prospective employers to explain the circumstances of their discharge. But as the leading authority on defamation has explained, compelled self-publication defamation in the employment context is “troubling conceptually.” 1 R.D. Sack, supra at 2-84. “It is the termination and the reasons for it, not the communication, about which the plaintiff is actually complaining . . . .” Id. at 2-85. Any harm arising from the employee’s discharge is more appropriately dealt with under principles of employment law, and not under the law of libel and slander. Id.

It is surely for that, among other reasons, that several courts have pointed to the doctrine’s unpredictable effect on at-will employment. See Cweklinsky v. Mobil Chem. Co., supra at 225-226; Gonsalves v. Nissan Motor Corp. in Haw., supra at 172.

As the United States Court of Appeals for the Seventh Circuit noted, recognition of the doctrine of self-defamation, when combined with the doctrine of defamation per se,¹⁰ “gives employees who regret not having negotiated an employment contract a tort surrogate for it.” Rice v. Nova Biomedical Corp., 38 F.3d 909, 912 (7th Cir. 1994), cert. denied, 514 U.S. 1111 (1995). White could have demanded an employment contract with Blue Cross, but did not do so. The law should not permit him to secure indirectly what he failed to negotiate directly. And contrary to the suggestion of the dissent, post at 79, compelled self-defamation is not “a natural extension of Massachusetts case law,” but a dramatic departure from the principles governing employment at will.

White no doubt would counter that the harm he has suffered is occasioned not by his discharge, but by his failure to obtain alternative employment, an entirely foreseeable consequence, he argues, of Blue Cross’s failure to investigate the truthfulness of Winchester Hospital’s charge against him. But recognition of the doctrine of self-publication would run counter to another important aspect of employer-employee relations, an employer’s privilege to “disclose defamatory information concerning an employee when the publication is reasonably necessary to serve the employer’s legitimate interest in the fitness of an employee to perform his or her job.” Bratt v. International Business Machs. Corp., 392 Mass. 508, 509 (1984). Communications between former and prospective employers concerning an employee are similarly privileged. See Burns v. Barry, 353 Mass. 115, 118-119 (1967). These privileges serve the important public purpose of promoting the free flow of information in the workplace, and are lost only when the employer recklessly makes “unnecessary, unreasonable or excessive” publications. Bratt v. International Business Machs. Corp., supra at 509, 515 n.11. There is no such claim here.

Recognition of the doctrine of compelled self-publication defamation brings with it the potential to stifle communication in the workplace. See Cweklinsky v. Mobil Chem. Co., supra at 220; Gonsalves v. Nissan Motor Corp. in Haw., supra at 172; Sullivan v. Baptist Memorial Hosp., supra at 573. Defamation litigation is costly. The expenditure of time, resources, and money required to defend a claim of compelled self-defamation inevitably will induce self-censorship by employers. See, e.g., King v. Globe Newspaper Co., 400 Mass. 705, 708 (1987), cert. denied, 485 U.S. 940 and 485 U.S. 962 (1988) (“costs of litigation may induce an unnecessary and undesirable self-censorship”). The consequent harm to employees will be significant. Performance evaluations, which often inform discharge decisions, are a standard feature of modem management practices, and are widely endorsed as valuable to employees and employers alike. See, e.g., J. Katzenbach, Peak Performance: Aligning the Hearts and Minds of Your Employees 203-207 (2000). Beneath a dangling sword of defamation, employers are unlikely to provide employees with any reasons for employment decisions, including discharge, depriving employees of any opportunity to contest those decisions. See Sullivan v. Baptist Memorial Hosp., supra at 574. There is surely nothing more harmful to a discharged employee who must tell a prospective employer, “I don’t know why I was fired. I was never given a reason.” A person in White’s position can at least counter a false accusation if he is informed of it.

Blue Cross was well within its rights to give White any reason, a false reason, or no reason at all for his termination. Cort v. Bristol-Myers Co., 385 Mass. 300, 305 (1982) (“an employer has no duty to give any reason at the time of discharging an employee at will”). But at-will employees, no less than others, benefit immensely from open communications concerning their performance, prospects for advancement, and related matters, even if discharge results.

White argues that the “compulsion” element of the doctrine, that White was actually compelled to communicate the false information and that such compulsion was foreseeable to Blue Cross, will curtail any explosion of defamation litigation. We are not so sanguine. It is all but inevitable that a discharged employee will be called on to explain the circumstances of his discharge to prospective employers. And discharged employees will inevitably feel compelled to describe negative performance evaluations as reckless or false, whether communicated directly at the time of discharge, or contained in the employee’s personnel file. The calculation of damages for self-defamation will also be unpredictable, and entirely within the control of the discharged employee. See, e.g., Olivieri v. Rodriguez, 122 F.3d 406, 409 (7th Cir. 1997), cert. denied, 522 U.S. 1110 (1998) (noting that employee retains control over publication and may “blurt out” to multiple prospective employers “ground of his discharge in the most lurid terms” to increase damages). Recognition of the doctrine also creates a perverse incentive for a plaintiff not to mitigate damages. See Cweklinsky v. Mobil Chem. Co., 267 Conn. 210, 223-224 (2004); Sullivan v. Baptist Memorial Hosp., 995 S.W.2d 569, 574 (Tenn. 1999).

There are, in addition, pragmatic reasons why the doctrine should be rejected. The search for future employment may extend over a considerable period. Even a discharged employee who secures new employment may later move to a new position, and will be called on to explain once more the circumstances of an earlier discharge. If the discharged employee is free to commence an action any time he claims to be harmed from self-disclosure of the “defamation,” procedural rules, such as the statute of limitations become meaningless. See 1 R.D. Sack, supra at § 2.5.2, at 2-84 (compelled self-publication permits discharged employees “to control the manner and timing of the defamation as a litigation tactic” and “could also allow the plaintiffs effectively to void the statute of limitations”). As the dissent frankly notes, post at 73 n.1, the discharged employee may publish and republish the alleged defamatory statement “for the remainder of his professional life.”¹¹

We are mindful of the harm White may have suffered. The reason for Ms discharge, if false, may have damaged the professional career of an innocent person. But where there was no legal obligation on Blue Cross to investigate Winchester Hospital’s accusation about WMte, and no obligation on Blue Cross so much as to inform White of the accusation, Cort v. Bristol-Myers Co., supra at 305, Blue Cross cannot reasonably be characterized as a “wrongdoer.” Post at 73. WMte is in any event not bereft of remedies to compensate for any harm he has suffered. He may, for example, bring an action against Winchester Hospital for defamation, intentional interference with advantageous relations, or both. See, e.g., Buster v. George W. Moore, Inc., 438 Mass. 635, 652 (2003). If defamation law is to provide a remedy for WMte, the correct party to be charged with culpability must be, as it always has been, the originator of the defamatory statement communicated to a third party.

Judgment affirmed.

1 The defamation doctrine at issue is variously called “compelled self-publication,” see, e.g., Cweklinsky v. Mobil Chem. Co., 267 Conn. 210, 212 (2004); “self-defamation,” see, e.g., Austin v. Inet Techs., Inc., 118 S.W.3d 491, 499 (Tex. Ct. App. 2003); “defamation by self-publication,” see, e.g., CIM Ins. Corp. v. Masamitsu, 74 F. Supp. 2d 975, 990 (D. Haw. 1999); and “forced republication,” see, e.g., Atkinson v. Stop-N-Go Foods, Inc., 83 Ohio App. 3d 132, 135 (1992).

2 We accept as true the allegations in the complaint, and such reasonable inferences as may be drawn from it in favor of the plaintiff. See Eyal v. Helen Broadcasting Corp., 411 Mass. 426, 429 (1991).

3 The complaint included one count sounding in defamation, alleging a communication of the accusation by Cuniff to other members of the Blue Cross staff. Prior to this appeal, White filed a stipulation of dismissal of that count.

4 By statute, Massachusetts permits a plaintiff to recover for a truthful defamatory statement published in writing (or its equivalent) with actual malice, G. L. c. 231, § 92, except as confined by the requirements of the First Amendment to the United States Constitution. See Ravnikar v. Bogojavlensky, 438 Mass. 627, 629 n.3 (2003); Shaari v. Harvard Student Agencies, Inc., 427 Mass. 129, 131-132 (1998).

5 Other States have rejected the doctrine by statute. For example, in Colorado, the doctrine was adopted by Churchey v. Adolph Coors Co., 759 P.2d 1336, 1343-1345 (Colo. 1988), but subsequently eliminated by statute. See Colo. Rev. Stat. Ann. § 13-25-125.5 (West 1997). See also Volm v. Legacy Health Sys., Inc., 237 F. Supp. 2d 1166 (D. Or. 2002) (noting that Or. Rev. Stat. § 30.178[2] [2003], adopted in 1997 in response to Downs v. Waremart, Inc., 324 Or. 307 [1996], precluded compelled self-defamation in employment context).

6 Contrary to the dissent, post at 74-75, illustrations to the Restatement (Second) of Torts § 577 comment m (1997) do not support dispensing with the long-established requirement that the defendant must publish the defamatory statement to a third party. The Restatement’s illustrations merely underscore that a defendant cannot invoke as a pretext defense that a defamatory letter was intended for the plaintiff alone where the defendant knows that the plaintiff, because he is blind, for example, must disclose it to a third party. See Restatement (Second) of Torts § 577 comment m, illustration 10. Here, White was fully aware of the statements he published to prospective employers. Unlike the illustrations, he was not required to republish the reason for his discharge because he did not understand it.

7 In Minnesota, the doctrine recognized in Lewis v. Equitable Life Assur. Soc’y, 389 N.W.2d 876, 886-887 (Minn. 1986), is limited by statutes that disallow compelled self-defamation claims in certain circumstances. See Minn. Stat. Ann. § 181.962(2) (West 1993) (barring self-defamation claims based on employee’s review of own personnel file); Minn. Stat. Ann. § 181. 933(2) (West 2004) (barring self-defamation claims based on employee’s request of reason for discharge in writing).

8 The doctrine arguably has been adopted in Alaska. See Odom v. Fairbanks Memorial Hosp., 999 P. 2d 123, 130-131 (Alaska 2000) (affirming dismissal of defamation claim by physician against hospital for reporting termination, as required by law, to national practitioner data bank); id. at 133-134 & n.1 (Fabe, J., concurring in part and dissenting in part) (noting that, although court’s opinion does not so state, remaining claims for defamation were based on theory of self-publication).

9 Miller v. Butler, 6 Cush. 71 (1850), is cited in Annot., Publication of Allegedly Defamatory Matter by Plaintiff (“Self-Publication”) as Sufficient to Support Defamation Action, 62 A.L.R.4th 616, 625-626 (1988), for the proposition that Massachusetts has accepted the doctrine of compelled self-defamation. The Miller case, however, did not involve self-publication. Only one Massachusetts appellate decision has cited Miller v. Butler, supra, for the proposition that it may support the claim of self-defamation, but only to question the “vitality” of compelled self-defamation in Massachusetts. O’Connell v. Bank of Boston, 37 Mass. App. Ct. 416, 422 n.3 (1994).

10 Defamatory statements that harm a plaintiff’s professional or business reputation are actionable without proof of economic loss. See Ravnikar v. Bogojavlensky, supra at 630.

11 The Massachusetts cases relied on by the dissent do not concern self-publication by a plaintiff of a defamatory statement. See post at 75-76, citing Bander v. Metropolitan Life Ins. Co., 313 Mass. 337, 347-348 (1943) (sufficient evidence for jury to find defendant liable where, as defendant anticipated, supervisor read letter from company addressed to plaintiff); Rumney v. Worthley, 186 Mass. 144, 145-146 (1904) (sufficient evidence for jury to find defendant liable where he had “good reason to believe” that plaintiff’s daughter, a clerk in his store, would open and read letters pertaining to business before delivering letter to plaintiff); Miller v. Butler, 6 Cush. 71, 74 (1850) (letter containing defamatory statements mailed by defendants to third person). Because in those cases there was evidence that the defendant knew precisely the third party who would (and did) read the defamatory statement in a letter intended for the plaintiff, the defendant could not defend on the ground that the letter was addressed to the plaintiff alone. See Miller v. Butler, supra (addressee); Bander v. Metropolitan Life Ins. Co., supra (supervisor); Rumney v. Worthley, supra (clerk). See also note 6, supra. There was in those cases no issue as to whether the plaintiff would republish the defamatory statement again and again and again, to anyone of his choosing. See Burt v. Advertiser Newspaper Co., 154 Mass. 238, 247 (1891) (under Miller v. Butler, supra, defendant “is not bound to anticipate the general probability of such acts, any more than a particular act by this or that individual”).