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Character Assassination Not Covered By Worker’s Comp
by Ron Davis

Did a drug-store chain and its personnel falsely accuse one of the company’s employees in Rhode Island of getting kickbacks from shopping centers and other retail property owners?

The employee certainly believes they did indeed make such false accusations. And he recently cleared another hurdle in his effort to prove that the accusations, if actually made and if untrue, were a defamation of character.

At the time of the alleged accusations, the employee was an assistant vice president of real estate for the company. While serving in that capacity, he was told that at least two other employees of the drug-store chain had spread a rumor that shopping centers and property owners had been improperly funneling payments to him for procuring leases with his employer.

Apparently, the rumor regarding the kickbacks allegedly received by the officer reached top management of the drug-store chain. And shortly after that, he was fired.

The employee sued, claiming not only defamation, but also "intentional infliction of emotional distress and violations of state and federal employment-discrimination laws."

In response, the drug-store chain contended that because its former employee was covered under worker’s compensation laws while he worked for the company, he could not sue. In fact, such laws do restrict payments for any injuries received by an employee to worker’s compensation. In other words, an injured employee relinquishes the right to pursue any type of lawsuit based on his injury.

But is this employee’s alleged "injury" of the type covered by worker’s compensation?

The Rhode Island Supreme Court has answered that it isn’t. Explained the justices, "Certain intangible injuries—such as damage to an employee’s reputation or community standing—do not fall within the worker’s compensation law’s purview and no worker’s compensation legal remedy is available to compensate such an injured employee. Under these circumstances, the employee is free to bring a defamation lawsuit to redress such wrongs." (790 A.2d 368 [R.I. 2002])

Decision: February 2002
Published: March 2002



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