## Facts

- Randy Gibson worked for Philip Morris as a sales representative and was promoted to division manager in June 1989.
- Gibson kept company promotional “incentive items” (including Marlboro belt buckles) at his home for distribution in connection with his work.
- In July 1989, Gibson was demoted, and Edward Giancola became his supervisor.
- Philip Morris policy prohibited selling incentive items, and Gibson knew violations could result in discharge.
- Gibson was discharged on November 20, 1989, for alleged “falsification” and “selling incentive items.”
- The “selling” allegation was based on written statements by coworkers Beverly Brock and Charles J. Robinson (and another employee) asserting they saw Marlboro belt buckles offered for sale at a yard sale at Gibson’s home.
- Gibson denied selling any incentive items and testified he was at an all-day sales meeting on the date the coworkers claimed to have seen the yard sale.
- Gibson sued Philip Morris and the individuals for, among other claims, defamation based on the written accusations circulated within the company in connection with his termination.
- After a bench trial, the court entered judgment for Gibson on defamation and awarded compensatory and punitive damages exceeding $1 million; defendants appealed.

## Issues

1. Whether written workplace accusations that Gibson sold prohibited company incentive items constituted actionable defamation under Illinois law.
2. Whether the accusations were defamation per se (actionable without proof of special damages) or only defamation per quod.
3. Whether internal employment-related communications were conditionally privileged, and if so, whether the privilege was defeated by malice or abuse.
4. Whether the evidence supported the compensatory and punitive damages awards.

## Decision

- The appellate court affirmed the judgment for Gibson.
- The court held the accusations were defamation per se because they imputed dishonesty and a lack of integrity in Gibson’s employment by alleging dischargeable misconduct.
- The court upheld the trial court’s findings on falsity and publication, deferring to credibility determinations made in the bench trial.
- Although internal investigatory communications may be conditionally privileged, the court found sufficient evidence that any privilege was overcome by malice or abuse.
- The court sustained both compensatory and punitive damages as supported by the record and consistent with Illinois standards for defamation awards.

## Legal Principles

- Statements are defamatory per se in Illinois when they impute an inability to perform job duties or a want of integrity, or otherwise prejudice a person in their occupation.
- Accusing an employee of job-related dishonest conduct that warrants termination can constitute defamation per se without requiring proof of special damages to establish liability.
- Publication may be satisfied by communication of defamatory statements within a corporate chain of command when shared to effect workplace action such as discipline or termination.
- A conditional (qualified) privilege may apply to employment-related internal communications made on a proper occasion and to proper parties, but it is defeated by malice or abuse, including knowing falsity or reckless disregard for truth.
- Punitive damages may be awarded in Illinois defamation cases upon proof of malice or reckless disregard, and will be upheld when supported by evidence and not the product of passion or prejudice.

## Conclusion

The Illinois appellate court affirmed liability and substantial compensatory and punitive damages where coworkers’ internal written accusations falsely attributed dischargeable, job-related dishonesty to an employee, making the statements defamatory per se and defeating any conditional workplace privilege through proof of malice or abuse.


Gibson v. Philip Morris, Inc., 685 N.E.2d 638 (Ill. App. Ct. 1997)