White v. Blue Cross and Blue Shield of Massachusetts, Inc., SJC-09157 (MA 6/11/2004)

• Decision Date: 11 June 2004
• Docket Number: SJC-09157
• Citation: 442 Mass. 64
• Parties: ROY ALBERT WHITE vs . BLUE CROSS AND BLUE SHIELD OF MASSACHUSETTS, INC.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

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ROY ALBERT WHITE vs. BLUE CROSS AND BLUE SHIELD OF MASSACHUSETTS, INC.

SJC-09157

Supreme Court of Massachusetts.

February 2, 2004.

June 11, 2004.

Present: Marshall, C.J., Greaney, Ireland, Spina, Cowin, & Sosman, JJ.

Libel and Slander. Actionable Tort.

Civil action commenced in the Superior Court Department on July 9, 2002.

A motion to dismiss was heard by Patrick J. Riley, J.

The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

Harvey A. Schwartz for the plaintiff.

Joseph Halpern for the defendant.

Ben Robbins, for Associated Industries of Massachusetts & another, amici curiae, submitted a brief.

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 liable 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 , 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...