Compliance February 20, 2009

Appellate Court Reverses Course in Staples Defamation Case

February 20, 2009 (PLANSPONSOR.com) - In an unusual move, a federal appellate court has reversed its own ruling and asserted a defamation case against office supply retailer Staples should move on to a trial.
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The latest pronouncement from the   1st U.S. Circuit Court of Appeals in a dispute over the firing of a Staples salesman sent the case back to a lower court with instructions to hold further proceedings to find out whether a mass e-mail about the circumstances of the employee’s discharge was evidence of the employer’s actual malice.

While plaintiff Alan S. Noonan does not contest the content of the Staples e-mail – that he was let go for padding expense reports – Noonan has contended the message to about 1,500 employees nonetheless constituted defamation based on a century-old Massachusetts state law. That law holds that a statement can represent defamation even if it is factually correct if it was maliciously published.

The first time the 1 st  Circuit heard the Noonan case, the judges in August 2008 agreed with the lower court’s order in favor of Staples. Noonan asked the judges to reconsider, a move that led to the latest ruling (See Appellate Panel Backs Staples Options Cutoff ).

The appellate court also affirmed the district court’s summary judgment on the plaintiff’s claims that Staples breached its severance and stock option agreements.

The latest opinion in Noonan vs. Staples, Inc ., is available here .

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