Labor & Employment Law Daily Company president faces punitives for saying he had reason to believe fired manager started plant fire
Tuesday, May 1, 2018

Company president faces punitives for saying he had reason to believe fired manager started plant fire

By Lorene D. Park, J.D.

Denying in part a motion to dismiss a defamation per se claim against a company president who allegedly told others he had reason to believe that an employee started a fire at the plant from which she was terminated, a federal district court in Virginia concluded that the statement, if proven, would have injured her in her profession. She could also pursue punitive damages given that the president had been informed that the fire was started by an HVAC unit known to be having problems. The employee’s claim that her wife was fired by the same company in retaliation for her discrimination charge also survived the employer’s motion because it was reasonably related to her EEOC charge and so was adequately exhausted. However, the company president could not be individually liable for retaliation under the ADA so that claim failed (Via v. Communications Corporation of America, Inc., April 26, 2018, Conrad, G.).

Took medical leave. The employee and her wife both worked for the employer in managerial roles. In February 2016, she was diagnosed with fibromyalgia and major depressive disorder. Her rheumatologist recommended she take between one and three months off work and she was granted 12 weeks of FMLA leave. She was also assured that if she could not return immediately following the expiration of her leave, her position would remain available. Though she was expected to return May 9, 2016 her psychologist and family physician both believed she needed additional time off and sent notices recommending an additional eight weeks of leave.

Terminated. In a May 6 meeting with the company president and the HR director, she advised them of her need for additional leave and the president hugged her and said “it will all work out.” Neither executive indicated the employee’s job would be in jeopardy if she took additional leave but she was terminated by a letter dated May 12, 2016. The letter indicated her job could not be held open and she was terminated effective May 16. She filed an EEOC charge alleging disability discrimination, including failure to engage in the interactive process, failure to accommodate her, and failure to allow her to return to work. She filed suit on July 17, 2017.

Plant burned down. On August 26, the employee and her wife attended an all-day social event. Upon returning, her wife received a frantic call from a crew member reporting a fire at the printing plant. The employee’s wife called the employer’s director of production and headed to the plant, which ultimately burned to the ground. Crew members working at the plant had reported smelling smoke in the data processing area and then discovering a fire burning in an enclosed machine shop that had recently been constructed in the middle of the facility. After interviewing witnesses and reviewing mechanical drawings of the plant, the chief of the county fire department determined that the fire had erupted in the HVAC unit on the plant’s roof above the machine shop, causing the roof to collapse and spreading fire below. A machine technician advised the chief that the HVAC unit had not been working right for about two weeks.

Company president accuses plaintiff. The location of the fire and its cause were communicated to the company president, who visited a store the next day and discussed the fire with another customer. He was asked if he knew the cause, and he said he thought it was arson. The customer mentioned he had smelled electrical smoke in the air the night of the fire and the president replied: “I have reason to believe that a disgruntled employee that I had dismissed is responsible for the fire. She is litigating with me and had ample opportunity to cause the fire.” He also said, “I feel bad for her, but… then I found out that her family owns a restaurant in Culpeper at the corner of Route 15 and 3.” The customer responded: “You mean you’re talking about Sandy Via?” He explained that he knew the family that owned the restaurant, which was the only one at that corner. Astonished, the president asked: “Is she a friend of yours?” and the customer replied: “Yes, Sandy and her family are friends.” The company president replied, “Well, maybe I shouldn’t have said anything,” but he went on to add “I think she had ample opportunity, and I think she holds a grudge against me because the last time I saw her she flipped me the bird.”

Wife fired. The employee’s wife was fired on September 2. According to the employee, this was in retaliation for her EEOC charge and lawsuit and the defendants intended her wife’s termination to cause continued financial and emotional hardship. In her second amended complaint, the employee added a claim that her wife was fired in order to retaliate against her for seeking redress under the ADA.

Retaliation claim exhausted as related to EEOC charge. Denying the employer’s motion to dismiss the retaliation claim, the court first concluded that the employee exhausted her administrative remedies. Though the claim was not mentioned in her discrimination charge, under Fourth Circuit precedent, a claim of retaliation for filing an EEOC discrimination charge is “like or reasonably related to… and growing out of such allegations,” and is therefore exhausted.

No individual liability, punitive damages for retaliation. That said, the ADA did not allow the employee to pursue a retaliation claim against the company president individually, who was not an “employer” under the Act, so that claim was dismissed. Furthermore, compensatory and punitive damages were not available for alleged violations of the ADA’s anti-retaliation provision so any request for such damages was also dismissed.

Arson accusation as defamation per se. The employee’s defamation per se claim against the company president survived. Contrary to the defendants’ argument, the employee identified the statements at issue, alleging the president told a store customer and the store’s owner that she had committed arson at the plant. And while the defendants challenged the employee’s assertion that the false accusation of arson prejudiced her in her profession or trade, the court could not agree. In its view, the accusation that she committed arson at the facility where she previously worked as a manager “would be an obtrusive stumbling block to her gaining other employment.”

Also rejected was the defendant’s argument that the president’s statements about the fire were nonactionable opinions. To the contrary, he indicated he had “reason to believe” she was responsible for the fire and had “ample opportunity” to cause it, implying he knew of facts that led to the conclusion she committed arson. The allegations also supported punitive damages. He was told the fire started in an HVAC unit known to be in disrepair yet he still said he had reason to believe the employee started the fire. This made plausible the claim that he made the accusations with knowledge of their falsity or reckless disregard for their falsity.

Interested in submitting an article?

Submit your information to us today!

Learn More
Employment Law Daily

Labor & Employment Law Daily: Breaking legal news at your fingertips

Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on labor and employment legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.

Free Trial Learn More