Cease and Desist Letter to Former Employee and New Employer ≠ Libel

A recent case from the District of Columbia addresses whether an employee has a claim for libel against a former employer and its attorney for sending the employee and their new employer a cease and desist letter. In Murphy v. Livingsocial, the employee signed a Confidentiality, Intellectual Property, Noncompetition Agreement (the “Agreement”) when she was hired by Livingsocial. Two years later, the employee accepted a job with a competitor. Livingsocial first sent the employee a letter reminding her of her obligations under the Agreement. Then, when it appeared the employee was assisting her new employer in soliciting Livingsocial employees, Livingsocial sent the employee another letter demanding that she cease and desist. Livingsocial also sent a letter to the HR director of the new employer regarding the solicitation of Livingsocial employees, outlining the employee’s obligations under the Agreement, and demanding that the new employer cease and desist further solicitation.

In response, the employee sued Livingsocial and the in-house attorney who signed the cease and desist letter for libel per se, alleging that the letter sent to her new employer falsely imputes an inability to perform or a want of integrity by the employee in the discharge of her employment. Livingsocial moved to dismiss the libel per se claim on the grounds that the statements in the letter were absolutely privileged because made by an attorney in anticipation of litigation. The Court agreed and dismissed the claim. The Court also found that because the Agreement expressly authorized Livingsocial to communicate the terms of the Agreement to prospective employers, the employee consented to Living social’s right to send the cease and desist letter, and thus could not claim libel.

In Oregon, a statement in a cease and desist letter like that written by Livingsocial’s in-house attorney will also likely be absolutely privileged, provided it is sent only to the parties who would be involved in the threatened legal action, and as long as the statements made are not made for an improper purpose.

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