New #TheyLied Libel-by-Implication Case, Related to Firing of Service Employees International Union Official

From Fells v. SEIU, decided yesterday by the D.C. Court of Appeals in an opinion by Judge Joshua Deahl, joined by Judges Corinne Beckwith and John Fisher; not as colorful as the inimitable Memphis Pub. Co. v. Nichols (Tenn. 1978), but still an interesting modern example of the libel-by-implication doctrine:

Kendall Fells was a high-level employee within the Service Employees International Union (SEIU). After his seemingly forced resignation, SEIU issued a press statement tying his departure to an "ongoing investigation" that was triggered by another executive's sexual misconduct, namely, sleeping with subordinates. In announcing Fells' departure, the statement explained that Fells' own "abusive behavior towards … predominantly female staff" was brought to light by that investigation. Fells sued SEIU for defamation and related claims. He contends that SEIU's statement falsely implied that he was forced out due to sexual misconduct, when in fact, there is no dispute that Fells' departure was not related to any sexual misconduct….

We conclude, contrary to the trial court's view, that a reasonable jury could find SEIU's statement falsely implied that Fells was ousted for sexual misconduct….

The core facts are not in dispute. Kendall Fells held various staff and leadership roles over the course of his thirteen-year career with SEIU. At the time of his resignation, Fells was interim President of the National Fast Food Workers' Union, a labor organization within SEIU that grew out of the "Fight for $15" minimum wage movement that he championed. While Fells was in that role, SEIU's President, Mary Kay Henry, began actively encouraging employees to report sexual harassment and abuse amid the #MeToo movement. As a result of several accusations involving inappropriate sexual relationships with subordinates, SEIU suspended its Executive Vice President, Scott Courtney, who resigned shortly thereafter. SEIU's spokesperson told BuzzFeed News that Courtney engaged in "sexual misconduct and abusive behavior," as revealed through a still-ongoing "internal investigation launched to look into … sexual misconduct and abusive behavior towards union staff."

Ten days later, Fells resigned, seemingly under threat of termination. SEIU's spokesperson issued a statement to multiple news outlets regarding Fells' and another employee's contemporaneous departure, indicating that those "personnel actions" were the result of its aforementioned "ongoing internal investigation" and pertained to "serious problems related to abusive behavior towards staff, predominantly female staff." The statement in its entirety read as follows:

As a result of information that has come to light through our ongoing internal investigation, today SEIU took action on two senior staff. These personnel actions are the culmination of this stage of the investigation, which brought to light the serious problems related to abusive behavior towards staff, predominantly female staff. We know that progress does not stop with these personnel actions alone. [SEIU] President Henry has taken important steps toward ensuring that our workplace environment reflects our values, and that all staff is respected, their contributions are valued, and their voices are heard.

Several media outlets then published articles connecting Fells' and Courtney's resignations and, in at least one instance, expressly attributing Fells' ouster to sexual misconduct allegations. In fact, as SEIU concedes, Fells' departure was not related to any claims of sexual misconduct….

The court concluded that SEIU's statement was "[1] in furtherance of the right of advocacy [2] on issues of public interest," and thus presumptively covered by the District's anti-SLAPP Act; and "[b]ecause SEIU made a prima facie showing in support of its special motion to dismiss under the Anti-SLAPP Act, the burden shifts to Fells to show that his defamation claim was 'likely to succeed on the merits.'" But the court went on to say that "Fells demonstrated a likelihood of success on the merits so that his defamation claim may proceed," which is to say that he "present[ed] an evidentiary basis that would permit a reasonable, properly instructed jury to find in the plaintiff's favor":

Fells has no viable claim for express defamation—SEIU's statement did not expressly state he was terminated for sexual misconduct—leaving him to resort to a theory of implied defamation.

Defamation by implication concerns not what somebody literally stated, but what their statement implies…. [I]t is not enough that a statement can "be reasonably read to impart the false innuendo, but it must also affirmatively suggest that the author intends or endorses that inference." Evidence that supports such a finding includes "suggestive juxtapositions, turns of phrase, or incendiary headlines."

The SEIU statement at issue provided that Fells' termination was "the culmination of this stage of the investigation, which brought to light the serious problems related to abusive behavior towards staff, predominantly female staff." Recall that "the investigation" referenced was triggered by allegations that another recently ousted executive, Scott Courtney, was having inappropriate sexual relationships with subordinates. Fells argues that tethering his departure to the same internal investigation that led to Courtney's ouster days earlier indicated that he, too, had engaged in sexual misconduct, at least absent any indication to the contrary…. "[A] defendant does not avoid liability [for implied defamation] by simply establishing the truth of the individual statement(s); rather, the defendant must also defend the juxtaposition of" its statements …. We agree that a jury could reach that conclusion.

SEIU counters that the internal investigation was not exclusively about sexual misconduct. It highlights that, upon Courtney's resignation, SEIU's spokesperson described the investigation as one "look[ing] into questions about [1] potential violations of our union's anti-nepotism policy, [2] efforts to evade our Code of Ethics and [3] subsequent complaints related to sexual misconduct and abusive behavior towards union staff." {SEIU seemingly refers to "nepotism" in a broad sense when discussing Courtney's departure and the investigation surrounding it to include preferential treatment not just of family members, but of friends or sexual partners as well.} It is hard to see how that changes the calculus. Sexual misconduct, nepotism, and ethical breaches may all be of a piece, and in the context of the investigation prompting Courtney's resignation, it appeared that they were. In light of that context, the most natural reading is that the investigation was into higher-ups giving preferential treatment to subordinates who acquiesced to their sexual advances—or disfavoring those who did not—checking each box of sexual misconduct, nepotism, and ethical breaches.

But even if that were not enough, there is a second problematic juxtaposition in SEIU's statement suggesting that Fells engaged in sexual misconduct. It says that his ouster stemmed from "abusive behavior towards staff, predominantly female staff." When coupled with the earlier reference to an investigation that resulted in another high-level executive's departure for sexual misconduct—and especially in the midst of the roiling #MeToo movement—a reasonable jury could conclude that this statement indicated Fells' misconduct was sexual in nature, and that SEIU intended to so imply. Indeed, a Breitbart article drew that exact inference, with a headline positing: Four SEIU Officials Out of a Job Because of Sexual Misconduct Charges.

The Supreme Court of Minnesota found a similar juxtaposition potentially defamatory in Phipps v. Clark Oil & Refining Corp. (Minn. 1987). In that case, a gas station attendant alleged that he was fired for refusing the request of a customer—who happened to be "handicapped"—to put leaded gasoline into a vehicle designed for unleaded gasoline. Gas station representatives then made factually accurate statements indicating that he had been fired "for failing to provide … service to a handicapped customer." While technically true, the customer's handicap had nothing to do with the employee's refusal to assist them, and Phipps held that there was a triable question of fact as to whether the inclusion of the word "handicapped" gave rise to a false inference that the attendant refused to help the customer because of their handicap. Similarly here, it is not obvious why SEIU mentioned that the abuse was predominantly of women, and came to light as part of the investigation into Courtney's sexual misconduct, if not to imply that Fells had engaged in conduct of the same nature. A jury could reasonably adopt Fells' position that doing so amounted to defamation….

Congratulations to my friend Erik S. Jaffe (who is also a colleague of mine at Schaerr | Jaffe LLP, where I'm a part-part-part-time academic affiliate), who argued the case, on the victory. Note that I am writing this post solely in my academic capacity, and not out of any connection with Schaerr | Jaffe (the case came up in my daily Westlaw query for interesting new First Amendment cases).