Fired Is One Thing. Branded a Thief Is Another: Defamation Risk in California Terminations
Estimated reading time: ~10 minutes
Most wrongful termination lawsuits do not start with dramatic public accusations. They begin in a private meeting, often at the end of a workday, when an employer breaks the bad news and explains why an employee is being let go. In that moment, some employers believe that the stronger and more forceful the language, the stronger the legal footing for the termination. In California, that instinct can needlessly increase legal risk.
The words used during a termination matter. They can determine whether the decision remains a routine at-will discharge or evolves into a defamation claim. Defamation allegations are increasingly pleaded alongside other employment claims when the termination involves accusations of misconduct.
Under California Civil Code sections 44 through 46, defamation is a false and unprivileged statement of fact that harms a person’s reputation. Libel refers to written statements. Slander refers to spoken ones. In the employment context, the risk most often arises during termination meetings, in written termination summaries, and occasionally during reference discussions.
Not every negative statement about an employee is defamatory. The law draws a critical distinction between statements of opinion and statements of fact. An opinion expresses a judgment or evaluation that cannot be objectively proven true or false. A factual assertion, by contrast, makes a claim about what actually occurred and can be tested against evidence.
When a manager says, “We were dissatisfied with your performance,” that is an evaluative judgment. It may be disputed, but it is not the type of statement that can be objectively proven true or false in the same way that a concrete accusation can. Similarly, saying, “You did not meet productivity expectations,” or “You failed to follow company procedures,” typically reflects performance standards and policy compliance. Those statements are generally low-risk in the defamation context because they are tied to workplace expectations and managerial judgment.
The legal exposure increases dramatically when the language shifts from performance evaluation to accusations of criminal, quasi-criminal, or morally stigmatizing conduct.
California law recognizes a category called defamation per se. Simply put, this means certain false accusations are considered so inherently damaging that the law presumes harm to reputation. The employee does not need to prove specific economic losses in order to seek damages for reputational injury.
Under Civil Code section 46, slander per se includes false statements that charge someone with a crime or that directly injure a person in their profession, trade, or business. If an employer falsely calls an employee a “thief,” accuses them of “fraud,” or alleges “embezzlement,” that is an accusation of criminal conduct. It is also professionally disqualifying in almost any context because honesty is a basic requirement for virtually every position. If untrue, it falls squarely within the category of defamation per se.
The same analysis can apply to allegations of “sexual harassment.” While not every instance of workplace misconduct constitutes a crime, being labeled a sexual harasser can directly and severely damage a person’s professional standing. In many industries, such a label can effectively end a career. If the accusation is false, it may qualify as a statement that directly injures the employee in their profession, placing it within the defamation per se category.
There is an enormous legal difference between saying, “You failed to adhere to our respectful workplace policies” and saying, “You committed sexual harassment.” The first describes a policy violation. The second applies a socially and professionally stigmatizing label. If that label is false, the employee does not have to prove specific economic harm such as a lost job offer in order to pursue general damages for reputational injury.
This distinction becomes even more significant when we consider what happens after the termination.
California recognizes what is known as the coerced self-publication doctrine. Ordinarily, defamation requires that the defendant publish the statement to a third party. A plaintiff cannot create a claim simply by repeating the statement themselves. However, California courts recognize a narrow exception when an employer makes a defamatory statement only to the employee, the employee is under strong pressure to repeat it to others, and it is reasonably foreseeable that this repetition will occur. This principle is reflected in the standard California Civil Jury Instructions given to juries in defamation trials, which are provided below for reference.
Termination scenarios fit squarely within that framework. It is entirely foreseeable that a discharged employee will be asked by prospective employers why they left their prior job. If an employer falsely tells an employee, “You were terminated for theft,” or “You were fired for sexual harassment,” it is predictable that the employee will have to repeat that explanation in job interviews. Under the coerced self-publication doctrine, that foreseeable repetition can satisfy the publication requirement for defamation.
The reputational harm does not stop there. A prospective employer who hears that an applicant was terminated for theft or sexual harassment may hesitate to hire, not out of malice but out of self-protection. Employers are aware of their own exposure to negligent hiring claims. If they knowingly hire someone with a documented history of serious misconduct and harm results, they may face liability. As a result, stigmatizing labels can effectively foreclose future employment opportunities.
That dynamic amplifies the damage. Being told, “We are letting you go because your performance did not meet expectations,” is painful but survivable in the job market. Being told, “You were fired for theft,” or “You were terminated for sexual harassment,” can be professionally devastating. The foreseeability of that impact strengthens both the practical and legal dimensions of a defamation claim.
It is also important to remember that California is an at-will employment state under Labor Code section 2922. In most private-sector contexts, an employer may terminate an employee for any lawful reason, or for no reason at all, so long as the reason is not prohibited by law. The defensibility of the termination does not depend on dramatic language. Calling someone a thief does not make the termination more lawful. It simply increases the legal risk if the accusation cannot be proven true.
From a risk-management perspective, precision is more effective than provocation. If the issue is inaccurate time reporting, say that. If the issue is failure to comply with written policies, describe the policy and the conduct. If the investigation substantiated specific inappropriate behavior, state the factual findings rather than applying an inflammatory label. Expressions of managerial dissatisfaction and documented policy violations are generally safer than moral condemnations or criminal accusations.
Equally important, and notwithstanding the at-will nature of most California employment relationships, is an adequate and well-documented investigation into the facts of alleged employee misconduct before the decision to discharge is made. A good-faith investigation supported by evidence helps demonstrate that the employer had reasonable grounds for its conclusions and did not act with malice. In employment-related defamation cases, malice generally means the employer knew the assertion was false, acted with reckless disregard for whether it was true or false, or was motivated by hatred or ill will. Thoroughly documented investigative findings can be critical to preserving the employer’s qualified privilege and defending against defamation claims.
Beyond doctrine, there is a human reality. People rarely like being fired. They are far more likely to consult an attorney when they feel their integrity has been attacked. Words such as “thief” or “sexual harasser” do more than justify a termination. They can ignite a dispute and make litigation feel like the only way to clear one’s name.
None of this means employers must always euphamize or obscure clearly proven misconduct. If a thorough, well-documented investigation substantiates blatant theft, fraud, or egregious sexual misconduct, accurate language describing what occurred is not defamatory. Truth is a complete defense. The risk arises when labels outpace the facts and rhetoric exceeds what the investigation actually supports. Precision and proportionality are the goal.
Some employment law practitioners advise employers to provide no specific reason for termination at all, relying solely on the at-will nature of employment. From a defamation standpoint, that approach generally reduces risk because no factual accusation is made. However, in situations involving recent protected activity or other legally sensitive circumstances, the absence of a contemporaneous explanation can complicate the defense of later retaliation or discrimination claims. The strategic decision is not simply whether to speak or remain silent, but whether the employer can articulate a reason that is accurate, supported by documented facts, and capable of being maintained consistently if later challenged.
In California workplaces, defamation risk often turns on language. Performance-based opinions are usually safe. False factual accusations of crime or professional disgrace are not. Employers do not strengthen their legal position by using the harshest possible terminology or framing the termination decision in hyperbole. They strengthen it by being accurate, measured, and precise.
Practical Takeaways for California Employers
- Distinguish performance criticism from factual accusations. Expressions of dissatisfaction with performance, productivity, or policy compliance are generally far less risky than statements accusing an employee of criminal or professionally disqualifying conduct.
- Do not use stigmatizing labels unless the documented facts justify the terminology. Terms such as “theft,” “fraud,” or “sexual harassment” carry significant legal and reputational consequences. If those labels are accurate and supported by a well-documented investigation, they may be appropriate. If they are exaggerated or conclusory, they can create defamation exposure.
- Assume termination explanations will be repeated. It is foreseeable that former employees will be asked why they left prior employment. Under California’s coerced self-publication doctrine, statements made only to the employee may later satisfy the publication element of defamation if repetition is reasonably foreseeable.
- Investigate before you characterize. A thorough, good-faith investigation supported by evidence helps demonstrate reasonable grounds for conclusions and supports the employer’s qualified privilege.
- Be precise, not provocative. Dramatic language does not strengthen an at-will termination. Accuracy, proportionality, and restraint reduce both legal exposure and the likelihood of emotionally driven litigation.
Employers should consult with a qualified and experienced California employment attorney before making termination decisions or characterizing alleged misconduct in a manner that could affect an employee’s professional reputation. Careful legal guidance at the front end can prevent costly disputes later.