Can an employer tell a customer why you were fired, especially if it wasn’t true?

I was fired from my job last month. The owner of the company hired a new office girl, then she fired me because she said that I stole from the company which I did not. A customer then came in and asked about me and the owner told her (i.e. I was fired because I stole money). Was this legal for my employer to do?

Asked on March 30, 2016 under Employment Labor Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

1) A company may always tell the truth about why an employee left employment, even if the truth is bad for the employee, unless there is some written agreement (e.g. a separation and release agreement) which prevents them from doing ths.
2) However, they cannot lie about you. Telling a lie or factual untruth which damages your reputation is defamation, and you could potentially sue them for compensation. They could have shared a negative opinion of you, such as "John/Jane Doe was a lousy employee," but stating that you stole is a factual untruth, not an opinion. If you wish to explore this option (suing for defamation), discuss the matter with a personal injury attorney. Many such lawyers will provide a free consultation to evaluate a case; you can ask about this before making the appointment.


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