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Q: My company recently discovered that a well-liked employee had been embezzling money from us for some time. We terminated him immediately and contacted the police to press charges. But we didn’t tell the other employees why he was let go because we didn’t want to do anything to jeopardize our investigation or the possibility of prosecution.

However, now we’re seeing a drop in morale because the other employees can only speculate as to why he was fired without warning. We want to tell them what happened, but we don’t want to give the guy a defamation claim against us. What can we do?

A: First off, always remember that truth is an absolute defense against a defamation claim.

In other words, as long as what you say is true, there is no defamation liability, regardless of how bad it makes the other person look.

However, “truth” is a factual defense, and it usually takes a trial to determine whether what you said was true from a legal perspective. Anyone who has been all the way through trial, particularly if he or she paid for the lawyers, will likely tell you that you don’t want to say something if it means you’ll have to go all the way through a trial to defend yourself.

With that said, you ask a good question. The law holds that statements that a person has committed theft are defamatory “as a matter of law.” Many people assume this means that anytime you say someone committed theft, you automatically defame them. This is not the case.

“As a matter of law,” in this context, simply means the person making the claim doesn’t need to prove the statement would cause a reasonable person harm or damages. It’s presumed that if you untruthfully accuse someone of theft, it causes him or her harm. This makes it easier for people to bring defamation claims based upon accusations of theft as opposed to other reasons for terminations.

Fortunately, Oregon law provides employers additional protection, giving them a qualified privilege to make statements that either protect their interests or are on a subject of mutual concern.

Oregon case law has held that statements made to employees to protect morale falls within this definition. Accordingly, for your former employee to prove a defamation case against you, he won’t just have to prove you said something untrue. He’ll have to prove you knew it was untrue when you said it or that you had no reason to believe it was true. This makes a huge difference from a litigation perspective.

If your former employee brings a claim for defamation because you tell the other employees about his theft, as long as there is enough evidence that a reasonable person could conclude he stole from the company, you’re entitled to the qualified privilege and the case will likely be decided on motions long before it goes to trial.

If you terminated the employee for theft, you should have enough evidence that the theft occurred that this won’t be a problem. However, if you simply suspected him of theft and fired him before gathering the evidence – which, by the way, is still lawful from an employment standpoint – I would recommend you not make any statement to the employees about his suspected theft until you actually have enough evidence to support it.

Finally, there is also a statutory qualified immunity for information an employer discloses about a former employee’s job performance to a prospective employer at the request of the prospective employer or the employee. That should come in handy if the terminated worker applies for another job and, foolishly, provides your contact information to the prospective employer.

Mitch Baker is of counsel at the Portland office of Fisher & Phillips and specializes in labor and employment law and employment discrimination. Contact him at 503-242-4262 or [email protected].