Cancelers Beware: Trying to Get Person Fired by Threatening Employer with Cutting Off Your Business Relationship May Be Tortious

Not all attempts to get someone fired are tortious—but, in some states, these particular attempts may well be.

The rules on this vary from state to state: In some states, this sort of pressure might not be actionable—if the employer is free to fire someone, and you are free to stop doing business with the employer, you're free to threaten the employer with loss of business if it doesn't fire the person. But in other states, it may be tortious "interference with prospective economic advantage." Here's an Illinois decision handed down Friday, in Grako v. Bill Walsh Chevrolet-Cadillac, Inc. (written by Justice Adrienne Albrecht and joined by Justices Lance Peterson and Linda Davenport; see also Drake v. Dickey (Ind. Ct. App. 2013) for a similar holding):

Plaintiff alleged that [defendant] Walsh [the owner of the defendant car dealership] leveraged his status as a client of her former employer [Ramza Insurance Group] to secure her termination….

Based on the pleadings and depositions within the record, Grako filed for bankruptcy protection pursuant to federal law under Chapter 13 in November 2017. In June 2018, Grako returned a vehicle purchased from Bill Walsh Chevrolet-Cadillac, Inc., and discharged the associated debt.

The record reveals that Walsh had several personal insurance policies with Ramza Insurance. It also indicates that Bill Walsh-Chevrolet-Cadillac, Inc., bore the financial brunt of Grako's bankruptcy discharge of her vehicle. Walsh, an agent of Bill Walsh-Chevrolet-Cadillac, Inc., learned of the discharge in early November 2018. To Walsh's displeasure, the process of repossessing Grako's vehicle was at his expense. On November 7, he texted Grako, "R u kidding me after all I've done for you?" After exchanging texts the following day on the financial burden to retrieve the vehicle, Walsh concluded his conversation with Grako by stating: "We are pulling all of our business from ramza tomorrow."

Around this time, Walsh communicated his discontentment with Grako to his friend Schultz. Schultz [who had a business relationship with Ramza] chronicled their conversation in a string of text messages …, serving as an intermediary messenger between the displeased Ramza Insurance client and Ramza Insurance employees. According to Schultz, Walsh asked whether Grako worked at Ramza Insurance. Schultz's message also included the following:

"We have MAJOR [expletive] problems!!! MAJOR!! Walsh is going to pull ALL their business is [sic] [Grako] works for us. She stuffed them For over $15,000!!!! [Walsh] has been texting me all night and I just replied ***. He is like MAJOR LEAGUE p*** ***. This is NOT NOT NOT good."

Grako alleges that, as a result of Walsh's pressure, Ramza fired her; and the court concluded that Grako's lawsuit against Walsh could proceed:

[Even] at-will employees possess an actionable interest in their "future relations between" employee and employer. Restatement (Second) of Torts § 766, cmt. g (1979). The tort recognizes that a person's business relationships constitute a property interest and, as such, are entitled to protection from unjustified tampering by another….

"'To state a cause of action for intentional interference with prospective economic advantage, a plaintiff must allege (1) a reasonable expectancy of entering into a valid business relationship, (2) the defendant's knowledge of the expectancy, (3) an intentional and unjustified interference by the defendant that induced or caused a breach or termination of the expectancy, and (4) damage to the plaintiff resulting from the defendant's interference.'" … [T]he record supports a reasonable inference that Grako possessed a sufficient expectation of continued employment … [and] Walsh conceded he was aware that Ramza Insurance was Grako's employer….

To be found liable for tortious interference with prospective economic advantage, a defendant's interference must be intentional and improper…. Section 767 of the Restatement lists several factors which courts consider in determining whether an alleged interferer's conduct reaches actionable impropriety, including (1) the nature of the interfering conduct, (2) the interferer's motive, and (3) the proximity or remoteness of the interferer's conduct to the interference.

Concerning an interferer's motive, it may become important to determine whether an interferer was motivated "by a desire to interfere with the other's" business expectancy. If that desire was the sole motive behind the interference, it is "almost certain" to qualify as improper interference. As the Restatement makes plain, the "motive to injure another or to vent one's ill will on him [or her] serves no socially useful purpose." …

Although an individual has no legal obligation, barring a contract, to do business with another, there remains a "general duty not to interfere intentionally with another's reasonable business expectancies of trade with third person, whether or not they are secured by contract" unless such interference is not improper. Thus, Walsh's animosity towards Grako would be a legitimate reason to refuse to give Ramza Insurance his continued business. However, tortious interference arises when the individual takes an additional step; in this context, when pressure—financial or otherwise—is exerted to affirmatively induce a breach of agreement…. [T]he evidence before us presents numerous factual questions regarding Walsh's conduct and its possible impact over Grako's termination that precludes entry of summary judgment in defendants' favor….

Note that this ruling stemmed from a threat to cut off your own business relationship. Merely encouraging the employer to fire an at-will employee, or encouraging people not to do business with the employer, would generally not be actionable (and might even be protected by the First Amendment). See, e.g., Moore v. Hoff (Minn. Ct. App. 2012).

I'm generally skeptical of the legal theory on which Grako and similar cases rest; I think that, if T (here Ramza) is free to cut off relations (employment or otherwise) with P (here Grako), and D (here Walsh) is free to cut off relations with T, it's hard to see why D shouldn't be free to threaten T with such a cutoff as a means of pressuring T to stop doing business with P. But, as Grako shows, some state laws do make some such threats legally actionable, and I thought this was worth noting.

Christopher Jahnke (Frankfort Law Group) represents Grako.

Comments

[Jonathan Affleck]

Martin McMahon and I discussed the possibility of a civil RICO complaint against a Zionist that tries to cause employment termination of a critic or opponent of Zionism.

Most such incidents take place in the context of a pro-Israel organization that supports the state of Israel. Israel almost certainly commits genocide according to 18 U.S. Code § 1091 – Genocide. To tell the truth, I was skeptical because civil RICO is complex and hard to litigate.

While al-Tamimi v. Adelson was mostly a complaint to recover damages and torts from genocide and other extra-territorial US crimes under the Alien Tort Statute, Martin included a count of civil RICO not for interference with employment but for conspiracy in criminal acts against Palestinians in the occupied Palestinian Territories.

[VinniUSMC]

Shut. Up. Nazi. Scum.

[Cheerio]

The time may have come to simply add socio-political opinions (or some such) to our federal employment nondiscrimination laws. There can be exceptions for bona fide occupational qualifications (e.g., working for a group that promotes/opposes a given cause, etc.).

We could also have an exception for truly fringe/extreme views, if desired, by limiting this protection to views that don’t offend a genuine social *consensus* (that is, views that at least a substantial portion of the population shares). While there would of course be gray areas at the margins of such a qualitative cutoff, it would at least clearly exclude efforts to treat certain causes/positions as if they’re consensus norms without first actually persuading both the mainstream left and the mainstream right.

[Á àß äẞç ãþÇđ âÞ¢Đæ ǎB€Ðëf ảhf]

Or stop adding to the pile of shit excuses and get back to freedom of association.

[Ed Grinberg]

The time may have come to simply add socio-political opinions (or some such) to our federal employment nondiscrimination laws.

On the contrary, I'd say the time has come to simply get rid of our employment-nondiscrimination laws.

[Cheerio]

It would be interesting to have a law banning the firing of anyone in response to social pressure, *if* such pressure is based on speech unrelated to the job. Ironically, making controversial statements would then *increase* your job security, as any subsequent termination would immediately become suspect!

[Ruqt]

An employee is an agent of his/her employer, correct? When commenters refer to "unrelated" to job, what is unrelated in an agency relationship? X beats her husband, deals drugs, gets a swastika tatoo, writes letters to the editor advocating looting, banning gay relationships, return of Nazi party, destruction of Israel/Palestine/USA. Not job related? Really?

[M L]

They are only agents in the course of carrying out their official duties.

[Ruqt]

Correct, they are only agents when a judge or jury decide their actions, inactions, are within the course of their duties. You may want to review the case law on what can be found to be within an employee's" "official duties."

[M L]

I would, but I don’t have time for frolics and detours right now. 🙂

[Kristian H.]

If you feel strongly enough to try to get someone fired (for whatever reason), just stop doing business with the entity, and let them know why. If they solicit your business, say ‘No, and here’s why…’ If you don’t otherwise have any business with them, STFU.

[Á àß äẞç ãþÇđ âÞ¢Đæ ǎB€Ðëf ảhf]

Control freaks will never settle for leaving anyone alone as long as they have a government able to interfere and politicians eager to pander for more votes.

[SimonP]

Sloppy, sloppy. Are you pushing an agenda, Eugene?

Note that this ruling stemmed from a threat to cut off your own business relationship. Merely encouraging the employer to fire an at-will employee, or encouraging people not to business with the employer, would generally not be actionable (and might even be protected by the First Amendment).

While Grako certainly is addressing a situation where the defendant threatened to cut off their own business relationship, as a means to harm the plaintiff, nothing in the opinion you’ve excerpted requires that element, and indeed the sources cited in the excerpt make clear that this is not a requirement for the tort. So it’s not clear on what principled basis you have for distinguishing “mere encouragement.”

You point to Moore as supporting the claim that “mere encouragement” would not generally be actionable, but that is over-construing that case by a great deal. The court in Moore simply found that the evidence presented at trial was insufficient to support the claim that the defendant had specifically sought to have the plaintiff fired. All that the record supported, in that case, was that the defendant was engaged in a series of inquiries in order to publish true statements about the plaintiff. Moore thus can be validly taken to stand for the proposition that (i) true but unflattering public statements about a person that result in getting that person fired will not be actionable and (ii) truthfully informing an employer about a person’s unflattering activities will not be actionable, absent further evidence that those communications were intended to get the person fired, will not be actionable. Whether truthful statements communicated to an employer with the intention of getting a specific employee fired could be actionable is not resolved by Moore.

And, no, I don’t think one can take it so easily as granted that the First Amendment protects trying to get someone fired by pressuring an employer with truthful, unflattering information about the person. Moore cites the First Amendment concern when considering the defendant’s blog post, and considers the defendant’s communications with the plaintiff’s employer to be part of gathering information for that blog post. That much, I think, seems right. Gathering and publishing truthful information about someone should be constitutionally protected. But “interference” goes a step further. You’re at that point no longer serving a public “right to know” so much as you are intentionally trying to harm someone’s economic interests by focusing and targeting that concededly “truthful” information at them. That conduct is not constitutionally protected, nor should it be.

[Eugene Volokh]

SimonP: Did you have a chance to read the full Grako opinion? I didn't quote it, because the post was already long, but it acknowledges that "truthful statements serve as an absolute defense if the purported interference involves the conveyance of information" (citing the Restatement, so it's not just a weird Illinois twist). That's true even when the defendant is indeed intentionally trying to get someone fired (since it's an absolute defense). The court also cites a past Illinois case that rejected liability for mere statements of "opinion."

The Grako court went on to summarize,

[T]he primary interference alleged is the coercion Walsh purportedly exerted over Ramza Insurance in threatening to pull his business.... Therefore, the allegations within
Grako’s complaint involve interference distinct from “merely giv[ing] truthful information” concerning her bankruptcy and its effect on Bill Walsh Chevrolet-Cadillac, Inc.’s finances.

It is that threat that made Walsh's actions potentially actionable.

As to Moore, you say, "Whether truthful statements communicated to an employer with the intention of getting a specific employee fired could be actionable is not resolved by Moore." But Moore said (emphasis added),

Hoff's communication with Allen is too intertwined with Hoff's constitutionally protected blog post to accurately characterize it as independent tortious conduct.... The fact that Hoff's underlying goal in conveying this information was to get Moore fired does nothing to disentangle the protected statement from any tortious conduct. We therefore conclude that there is too great a risk of infringing on Hoff's constitutional right to publish this information if he is held liable for Moore's subsequent employment termination.

[SimonP]

I hadn't meant to imply that "conveying truthful information" with a specific intent that it would be acted on in a particular way was sufficient to be actionable (and I realize my comment wasn't clear about that). In Grako, more was required - a threat to pull business. In Moore, the putative "threat" was to drag the employer into a smear campaign that the employer would otherwise prefer to avoid. I am saying that such a threat distinguishes it from merely "conveying truthful information"; the only reason that claim failed in Moore was that it was evidently factually unsupported.

But your statement in the OP went further: "Merely encouraging the employer to fire an at-will employee, or encouraging people not to business with the employer, would generally not be actionable (and might even be protected by the First Amendment)." "Encouraging the employer to fire" goes beyond "conveying truthful information" about an employee.

[Eugene Volokh]

SimonP: So your view is that saying to an employer "I encourage you to fire Jane Schmane because she said the following racist statement" (assume the allegation is accurate) is tortious and unprotected by the First Amendment -- even when the firing would itself be legal -- though just saying to an employer "I want to let you know that Jane Schmane said the following racist statement" isn't tortious?

That doesn't seem correct to me, or consistent with Grako, which treated "exchange of information" in the context of the truthful-information defense as including "opinion" (¶ 42). Likewise, the case cited by Grako for this proposition (Soderlund Bros.) says,

There is no liability for interference with a prospective contractual relation on the part of one who merely gives truthful information to another. (Restatement (Second) of Torts § 772, Comment b, at 50 (1979).) Matters of fact are distinguishable from expressions of opinion, and the latter cannot form the basis of an action of fraud (Marino v. United Bank of Illinois, N.A. (1985), 137 Ill.App.3d 523, 92 Ill.Dec. 204, 484 N.E.2d 935) or an action of commercial disparagement (see Prosser & Keaton on Torts § 128, at 968 ("[a] number of cases have subscribed to the view that opinion statements of competitors are not actionable")).

And Soderlund applies this reasoning to the interference with business relations tort as well.

Finally, NAACP v. Claiborne Hardware Co., on which Moore relied, expressly involved interference with another's business by encouraging people to stop dealing with other people (though as consumers rather than employers); the Court held that the First Amendment protected the speech there. Putting all this together makes me think that courts wouldn't distinguish "I encourage you to fire Jane Schmane because she said the following racist statement" from "I want to let you know that Jane Schmane said the following racist statement" for First Amendment purposes.

[Harvey Mosley]

IANAL so I have a question. If Walsh had simply cancelled his policies without the threats and only told the agency why after he had been asked would that create liability?

[Eugene Volokh]

Great question, which the Restatement (Second) of Torts § 766 comment l deals with in detail (whether or not you think it's satisfactory):

A refusal to deal is one means by which a person may induce another to commit a breach of his contract with a third person. [This may include] A ... induc[ing] B to break his contract with C by threatening not to enter into, or to sever, business relations with B unless B does break the contract. [The same logic under the Restatement applies to termination of an at-will contract as to the breach of a contract. -EV]

This situation frequently presents a nice question of fact. While, under the rule stated in this Section, A may not, without some justification[,] induce B to break his contract with C, A is ordinarily free to refuse to deal with B for any reason or no reason. The difficult question of fact presented in this situation is whether A is merely exercising his freedom to select the persons with whom he will do business or is inducing B not to perform his contract with C. That freedom is not restricted by the relationship between B and C; and A’s aversion to C is as legitimate a reason for his refusal to deal with B as his aversion to B. If he is merely exercising that freedom, he is not liable to C for the harm caused by B’s choice not to lose A’s business for the sake of getting C’s.

On the other hand, if A, instead of merely refusing to deal with B and leaving B to make his own decision on what to do about it, goes further and uses his own refusal to deal or the threat of it as a means of affirmative inducement, compulsion or pressure to make B break his contract with C, he may be acting improperly and subject to liability under the rule stated in this Section.

Illustration 1. Upon hearing of B’s contract with C, A ceases to buy from B. When asked by B to explain his conduct, A replies that his reason is B’s contract with C. Thereupon B breaks his contract with C in order to regain A’s business. A has not induced the breach and is not subject to liability to C ....

Illustration 2. Upon hearing of B’s contract with C, A writes to B as follows: “I cannot tolerate your contract with C. You must call it off. I am sure that our continued relations will more than compensate you for any payment you may have to make to C. If you do not advise me within ten days that your contract with C is at an end, you may never expect further business from me.” Thereupon B breaks his contract with C. A has induced the breach and is subject to liability ....

[Harvey Mosley]

Thanks for the reply and clear explanation.

[Commenter_XY]

That illustration #2 is a lot closer to reality. Trouble is: prove it. And then collect. All I'll say is: Good luck.

Contracts can be terminated for nearly any reason, or no reason at all, depending on how they are written.

We are dealing with an analogous situation with a client. The client has stated: This person's social media posts are beyond the pale. Remove this person, or else. Puts us between a rock and a hard place. We are now moving that person to another client account. It could have been much worse.

[Flight-ER-Doc]

Dear 'Business Name';

I have unfortunately learned that an employee of yours one (terrorist scums name) believes I should not exist. This troubles me.

I would not wish to be served by such a person, I will no longer be dealing with your business beyond those contractually required, and future contracts will not be entertained.

Thank you for your past service and current understanding.

/signed/ NEVER AGAIN

[Rev. Arthur L. Kirkland]

Would you endorse similar letters aimed at professors who traffic in racism, gay-bashing, transphobia, and other forms of bigotry?

[Kristian H.]

Yes, I much prefer that to the Masterpiece Cake saga of trying to get the state to force a behavior.

[Flight-ER-Doc]

Very much so. Why?

[questioner7]

" if T...is free to cut off relations...why D shouldn't be free to threaten T with such a cutoff as a means of pressuring" -- isn't that how extortion law works? Publishing true negative info about someone, protected speech; threatening to publish it unless something is done, criminal extortion.

[Ed Grinberg]

Here's how Black's Law Dictionary defines the crime of "blackmail" (also known as "extortion" or "criminal coercion"):

Unlawful demand of money or property under threat to do bodily harm, to injure property, to accuse of crime, or to expose disgraceful defects.

A "threat" to not do business with someone (or to end an existing business relationship) is not a recognized basis for prosecution.

[Scottro]

So if we cut through the legalese, it comes down to a pissed-off Walsh acting like an ass in trying to get revenge on someone by getting them fired from a job without cause and not based on their job performance. Walsh was using economic blackmail for his petty revenge.
I'm glad the law decided against him and I hope prohibitions of this kind of petty economic blackmail are codified into future law.

[Ed Grinberg]

if T...is free to cut off relations (employment or otherwise) with P..., and D...is free to cut off relations with T, it's hard to see why D shouldn't be free to threaten T with such a cutoff as a means of pressuring T to stop doing business with P.

Indeed.
The government should not interfere with private commercial or employment relationships in any way. A should be free to end his commercial / employment relationship with B (or refuse to enter such relationship in the first place) for any reason whatsoever. A should also be free to "threaten" to end his commercial relationship with B for any reason whatsoever.
(The "interference" in the case discussed in the OP consists of allowing the dismissed employee to sue the "threatener.")