July 30, 2014

Defamation vs. Unjust Enrichment

Posted in Defamation, Libel, Slander, Unjust Enrichment tagged , , , , at 9:23 am by Tom Jacobson

Although Jesse Ventura’s lawsuit against Chris Kyle’s Estate was hyped as a “defamation” trial, $1.3 million of the $1.8 million jury verdict was actually an award for “unjust enrichment.”  So, what is unjust enrichment?

In Minnesota one is unjustly enriched if s/he knowingly received or obtained something of value for which s/he in equity and good conscience should pay. And, unlike in a defamation case where damages are based on harm to the plaintiff’s reputation and the plaintiff’s humiliation and embarrassment, damages in an unjust enrichment case are based on the defendant’s profit from his/her wrongful acts.

In the Ventura trial the jurors were instructed to not even consider the unjust enrichment claim unless they first determined that defamation had occurred. Because they found defamation, they were then told to consider: whether the Kyle Estate knowingly received a benefit from the defamatory story; and whether the Estate is not entitled to the benefit received because of circumstances that would make it unjust for it to retain that benefit without compensating Ventura. Because the jury found that unjust enrichment occurred, they were then instructed to award Ventura the amount of money by which they found the Estate had been unjustly enriched.

Defamation and unjust enrichment claims can arise in any employment setting. For example, a supervisor’s false statement about a former employee could lead to a defamation claim. And, an employer’s failure to pay an employee for a benefit the employee provided to the employer could result in an unjust enrichment claim.

For more information about this article, please contact me at  taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2014 Swenson Lervick Syverson Trosvig Jacobson Schultz, PA

Advertisements

August 15, 2011

Fired & defamed: MN CEO wins $4 million award

Posted in Breach of Contract, Contracts, Defamation, Libel, Slander, Termination for Cause, Wrongful Termination tagged , , at 11:12 pm by Tom Jacobson

Firing its CEO and claiming it was for cause when it really was not proved to be a costly mistake for Minnesota-based Advanced BioEnergy, LLC.  According to a report in Minnesota Lawyer, ABE’s founder and former CEO, Revis Stephenson III, recently won a $4 million arbitration award after the company falsely claimed he was terminated for cause.

Stephenson’s contract with ABE provided that if he was fired without cause, he would be paid a severance worth approximately $800,000.00, but if he was fired for cause, he would be paid nothing.  The agreement also defined “cause.” ABE fired Stephenson and said it was for cause,  and Stephenson challenged the company’s decision.  The case went to arbitration, and the arbitrator found that the company did not have cause to terminate Stephenson but had only called it that to save money.  Moreover, the arbitrator concluded that ABE defamed Stephenson by falsely claiming it had cause for firing him.  The arbitrator awarded Stephenson $1 million for defamation, and the parties later agreed to a $4 million settlement for all claims.

As the arbitrator in this case noted, a false “for cause” label can hurt an employee’s job prospects.  Therefore, employers who want to dismiss an employee for cause need to make sure that’s the true reason because a false “for cause” characterization could lead to a claim for defamation.

For more information about this case, see CEO receives $4M award for defamation, Minnesota Lawyer, Aug. 5, 2011, or contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

January 19, 2011

Firing over false gun rumor costs Rochester, MN hotel $476,326.00

Posted in Breach of Contract, Contracts, Defamation, Firearms / Guns, Libel, Slander, Workplace Violence, Wrongful Termination tagged , , , , at 10:26 am by Tom Jacobson

Two weeks ago, I commented on the case of a Minnesota casino employee who was fired for bringing a gun to work (Packin’ heat at work:  Is it always employment misconduct? http://bit.ly/fSLNWC).  There, the Minnesota Court of Appeals upheld a determination that the employee’s actions were misconduct which disqualified him from unemployment benefits.

But what if an employer fires an employee based on the mistaken belief that he brought a gun to work and threatened to kill management, his union representative and himself if things didn’t go his way?  For the Rochester, MN Marriott hotel, the mistake was very costly, for it resulted in a $476,326.00 jury verdict in favor of a discharged bellhop, Jeff Moen.  The case was Moen v. Sunstone Hotel Properties, Inc. d/b/a Marriott Hotel.

The gun rumor started circulating in October, 2007.  When management learned of it the next day, they took immediate steps to fire Moen.  This included informing the supposedly threatened union representatives and interviewing the co-workers who had heard the rumor.  When Moen reported to work, he was frisked by a police officer, escorted to a conference room and fired.  Both the hotel and the union then sought restraining orders and barred him from the hotel and the union hall.

The problem for the hotel was that the rumor was false.  In a subsequent investigation by Moen’s attorney, the bellman who allegedly heard Moen’s gun threat denied ever hearing or repeating it.

Moen sued for breach of his union contract and defamation.  The jury awarded him $157,326.00 in lost wages, $200,000.00 for past damage to reputation and $119,000.00 for future damage to reputation.

The case points out the difficult question that arises when an employer is confronted with threats of potential workplace violence:  to what extent must the employer investigate the threat before taking action?  If the employer reacts too cautiously, and it turns out that the threat is real, the result could be disastrous.  If, as in Jeff Moen’s case, the employer reacts too aggressively, the result could be costly.  It appears that to avoid this result, Marriott should have dug a little deeper to get to the underlying source of the rumor before actually firing Moen.

For more detail about the case, see Fired bellhop gets $476K for defamation, says Olmsted County District Court, http://bit.ly/gWngAs.

If you have any questions about this post, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

%d bloggers like this: