Articles Posted in Defamation

On March 29, 2007, New York State’s highest court—the New York Court of Appeals—resolved a split among lower courts concerning whether securities industry employees could sue for monetary damages stemming from an employer firm’s filing of maliciously false and defamatory comments on a form U-5 termination statement.
Employers that are members of the National Association of Securities Dealers are required to file a form U-5 setting forth the reasons for the termination of a registered financial executive within 30 days of termination. As securities professionals well know, negative termination comments on a form U-5 substantially hinders their ability to secure subsequent employment in the industry, because firms rely upon those statements in assessing whether an offer of employment should be extended.
In the past, individuals adversely affected by such statements could file an arbitration with the NASD or court action seeking expungement of a maliciously false comment, as well as monetary damages based upon economic losses caused by the defamatory statement. New York’s law of defamation generally applied, which, in addition to recognizing that truth is always a defense to a claim of defamation, provides that employers are protected by a qualified privilege in making false statements about a current or former employee. Qualified privilege will insulate an employer from liability for false statements if the employer did not act with malice or with reckless disregard of its falsity. Such claims typically arise where former employers are contacted by prospective employers seeking personnel references.

Continue reading

Best Lawyers in America 2012
Best Law Firm 2011-2012
Rated by Super Lawyers Salvatore G. Gangemi