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

UPDATED: Sep 30, 2022

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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