February 3, 2025

Hearn v. Pacific Gas & Electric Company (Jan. 24, 2025, A167742, A167991) __Cal.App.4th__ (2025 WL 299389)

An employer became aware of employee performance issues and initiated an investigation by an independent investigator. The investigator’s report stated that the employee “violated the [employer’s] Code of Conduct by misusing company time, misstating work activities, falsifying timecards and charged meals that he was not entitled to.” The employer circulated the report internally, and the employee was terminated.

The employee filed an action against the employer alleging defamation. In connection with the defamation claim, the employee alleged the statements in the investigator’s report were false and defamatory and that he was terminated due to the false statements. The jury found the employer liable for defamation, and the employer appealed.

The Court of Appeal reversed, holding that the employee could not recover for defamation because it arose from the same conduct giving rise to his termination and the only result was the loss of employment. In addition, the employee did not seek any damages separate from his loss of employment, such as reputational harm. The alleged damages arising from the defamation related solely to the employment termination.