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Guess Bigger: $370M Defamation Verdict

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By Neetal Parekh on August 03, 2009 12:31 PM

A Los Angeles jury returned a verdict in defamation case against Guess Jeans co-founder Georges Marciano in favor of five former employees--to the tune of $370M.  The plaintiffs filed the defamation action as a response to a suit by Marciano who accused the five of stealing his emails, embezzling money and conspiring to sell costly art and wine from his collection.  And though that case was dismissed in December 2008 for the mogul's failure to comply with court procedure, the case against Marciano made it all the way...deep into to his designer jeans' back pockets.

Presiding Superior Court Judge Elizabeth White initially found Marciano liable for defamation in Marciano's counterclaim against the five former employees.  The employees claimed that not only did he accuse them of stealing, he also relayed the claims of accusation to police and passed on the same in other distributed communications.  One former-employee noted that the public accusations made against him made it difficult for him to find employment after working for Marciano.

Upon the finding of liability, a jury deliberated damage amounts and ultimately awarded each former employee $74 million, for a total of $370 million.

According to an attorney for two of the former-employees, the verdict served as a "message to every employer...that employees, even when they have been discharged, are entitled to respect and dignity and fair treatment". 

Defamation involves a statement that is false, published, and one that causes injury to the plaintiff.  Written defamation is libel, whereas spoken defamation is slander.  Employers must be aware of avoiding defamatory statements against employees and former-employees even in situations when the employer suspects wrongdoing on the part of employees.  Employers should consult with human resource specialists or attorneys in determining how to communicate, and when not to directly communicate, with employees when the employer-employee relationship takes a hit.

Marciano is expected to appeal the verdict.

 

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