Employer's Defamation Allegations Against Law Firm Over Online Comments Fail

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By Patrick Dorrian

Oct. 25 --An employment law firm--representing a human resources director who was fired by an Ashley, N.J., furniture dealer allegedly because she is a lesbian--can't be held liable by the company for statements made by firm lawyers and their client on various blogs, a federal district court ruled Oct. 23 ( Perez v. Factory Direct of Secaucus, LLC, 2013 BL 293575, D.N.J., No. 2:13-cv-00327, unpublished opinion 10/23/13).

Dismissing defamation and other state law claims by Factory Direct of Secaucus LLC and two company executives against the Ottinger Firm PC, the U.S. District Court for the District of New Jersey found that comments in articles posted on the firm's website as well as other sites wouldn't support a finding of liability because, among other things, the blog posts just described the lawsuit the firm had filed on behalf of Isabel Perez.

Perez, a former HR director with the company, allegedly was asked about her religious views and marital status by Chief Executive Officer Eugene Chrinian and Director of People Services and Development Kathy Martin before and during her two-week tenure with Factory Direct in 2012. According to Perez, after noticing a Human Rights Campaign decal on her car, Martin told Perez that she would “speak to God” regarding Perez's continued employment with the company and then fired her the next day.

A blog post appearing on AOL also included a quote attributed to Perez, which stated that Chrinian asked Perez, who is married to a woman, about the ring she was wearing and “what she felt about hiring gay people and African Americans.”

Judge Dennis M. Cavanaugh said that comment, and similar quotes attributed to Perez, didn't support Factory Direct's defamation, false light invasion of privacy or tortious interference with prospective economic advantage claims even if, as the company contended, the source of the quotes was former Ottinger attorney Gregory Filosa.

Factory Direct failed to adequately plead the first element of defamation, Cavanaugh said, which requires it to show that Ottinger made a false and defamatory statement concerning the company.

He said the same analysis applied to the company's false light claim. And under New Jersey common law, the judge added, when a tortious interference claim is founded on allegedly defamatory statements and the underlying defamation claim fails for lack of evidence, the tortious interference claim fails as well.

Employee Asked If She Is 'Real Christian.'
Factory Direct, doing business as Ashley Furniture Homestore, hired Perez to work as an HR director beginning Sept. 25, 2012. She reported directly to Martin.

According to Perez, Martin and Chrinian made a number of derogatory racial comments during her job interview, which included Martin referring to blacks as “Brownies” and whites as “creamies.” Martin also allegedly inquired about Perez's religious views, and Chrinian asked Perez about her marital status.

In addition, after Perez told Martin and Chrinian that she is a Christian, Chrinian allegedly asked Perez whether she meant that she is a “real Christian.” During another pre-employment meeting with Martin, Perez claims, Martin took hold of Perez's hands and began to pray to God, made a number of derogatory remarks about homosexuals and stated that she is often possessed by Jesus.

The biased comments allegedly carried over into Perez's employment with the company, as Martin purportedly made a number of discriminatory remarks on Perez's first day, including referring to an employee as a “nigga.” Moreover, two other HR employees reportedly informed Perez that Martin referred to them as “nigga,” “lesbo,” “fag” and other names.

Perez claims that when she asked Martin to refrain from making those type of remarks, Martin replied that Perez needed to be more understanding of Factory Direct's culture. She also claims that Martin continued her practice of praying before meetings.

On Oct. 5, 2012, Martin allegedly approached Perez in the company parking lot and asked Perez about a decal for the Human Rights Campaign on Perez's car. According to Perez, when she explained that the decal is the “equality symbol,” Martin asked if that meant the decal was for “the gays” and stated that she was no longer sure that she made the right decision in hiring Perez. Martin continued that she would “speak to God” about whether Perez could continue to work for Ashley.

Perez was fired the next day, with Martin purportedly telling her that God had spoken to Martin and instructed her that Perez should be let go. Martin allegedly added that Perez's beliefs “just don't fit” with the company's culture.

Lawsuit Sparks Blog Posts
Ottinger filed a complaint against Factory Direct on behalf of Perez Jan. 17, 2013, alleging that the company subjected Perez to discrimination, harassment and retaliation based on her sexual orientation and her job bias complaints, in violation of the Civil Rights Act of 1866 (42 U.S.C. § 1981) and New Jersey's Law Against Discrimination.

A few days later, the law firm posted to its website a blog post titled “Fired for Being Gay.” The article stated that: “On Friday, our employment firm filed an employment discrimination case against Ashley Furniture for firing our client over her sexual orientation. The case has generated media interest (Huffington Post, Courthouse News Service) due to the outrageous nature of the alleged conduct and also because gay rights is becoming a national issue.”

The author of the Huffington Post article referenced in Ottinger's blog also provided a link to her article on a Google+ Web page the author maintained, and Ottinger founding partner Robert Ottinger posted two comments on the Google+ Web page. The first comment stated, “As the firm representing Ms. Perez in this case, we appreciate you spreading the news on Google plus!”; the second comment stated, “As one of the lawyers working on this case. I could not agree more. This is an important issue. Obama even mentioned gay rights in his speech yesterday -- good sign.”

In addition, a Lacrosse Tribune interview with Perez was posted on a website maintained by the Winona Daily News; an online blog called The Proactive Employer published a story on the case; and AOL ran an article titled “Furniture Chain Exec Allegedly Fired Lesbian Because 'God' Spoke to Her.” The AOL article including six quotes attributed to Perez, three of which were repeated in The Proactive Employer post, including “I had just given up everything to join an organization, thinking I could change the culture.”

The AOL article also referred to Chrinian's alleged questioning about Perez's ring and feelings about hiring blacks and gays and included a statement by Filosa, who was one of the Ottinger lawyers representing Perez at the time. Filosa was quoted as saying, “A company's managers are entitled to exercise their own beliefs in their personal lives,” but that “it is illegal under NJ law for a private employer to terminate an employee because of their sexual orientation, regardless of the employer's religious beliefs.”

Court Dismisses Third-Party Complaint
In addition to filing an answer to Perez's complaint, Factory Direct, Chrinian and Martin also filed a third-party complaint against Ottinger, alleging that the firm's blog post and other Internet commentary about Perez's claims amounted to defamation, false light/defamation by implication and conspiracy and tortious interference with prospective economic advantage under New Jersey law. Granting the law firm's motion to dismiss, Cavanaugh disagreed.

To establish defamation under New Jersey law, the judge said, a plaintiff is required to show that the defendant made a false and defamatory statement regarding the plaintiff, that the statement was communicated to others, and that the defendant acted negligently or with actual malice. A statement's “content, verifiability, and context” are all examined to determine whether it is defamatory, he said.

The court added that “verifiability” goes to whether a statement is one of fact or opinion. “Because mere opinions cannot be proven as true or false, they do not give rise to liability unless 'they imply false underlying objective facts,' ” it wrote.

Here, the court found, the Ottinger blog post could not be considered defamatory because it merely described the complaint the firm had filed on behalf of Perez and thus was a true assertion of fact. Moreover, the context of the post and its inclusion of the phrase “alleged conduct” made “clear to a reasonable reader that the statements within the Post describe disputed facts in a lawsuit,” the court said.

Attorney Ottinger's comments on the Google+ posting also were not defamatory because it couldn't be reasonably argued that Ottinger was adopting the entirety of the Huffington Post author's article, the court concluded. Even if he did, it added, his first comment was a “simple expression of appreciation” and his second comment was “pure opinion,” not a mixture of fact and opinion.

“A 'pure' opinion exists when 'the maker of the comment states the facts on which he bases his opinion of the plaintiff and then states a view as to the plaintiff's conduct,' ” Cavanaugh wrote. “Pure opinions are not actionable, because when 'the facts supporting [an] author's opinion [are) disclosed, readers [are] reasonably able to draw their own conclusions as to whether those facts justif[y] that opinion.' ”

The court found that the Winona Daily News posting, the AOL article, and The Protective Employer story also failed to rise to the level of actionable defamation for the same reason--they mostly consisted of quotes attributable to Perez rather than her law firm, which was the only party being sued by Factory Direct. “[A] plaintiff alleging defamation must show that the defendant made a false and defamatory statement,” the court said.

The lone statement by Filosa included in the AOL Web post likewise was not defamatory, Cavanaugh added, because “it is a description of a legal standard, and is therefore true.” He also found that Factory Direct did not support its contention that Filosa was the source of the quotes by Perez included in the AOL and Protective Employer articles.

Denise R. Glatter of the Ottinger Firm in New York represented Perez and the firm. Tracy A. Wolak in Haddonfield, N.J., and Steven B. Harz in Hackensack, N.J., both of Archer & Greiner, represented Factory Direct, Chrinian and Martin.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Text of the opinion is available at http://www.bloomberglaw.com/public/document/PEREZ_v_FACTORY_DIRECT_OF_SECAUCUS_LLC_et_al_Docket_No_213cv00327/1.

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