In February 2018, Janet Tidwell—the CEO of Holston Methodist Federal Credit Union—was fired following an audit. According to Ms. Tidwell, she was actually terminated because she confronted the Chairman of the credit union’s Board of Directors and the Chair of its Supervisory Committee about the Board being out of compliance with its bylaws. Several months after Ms. Tidwell was fired, the Board Chairman also (allegedly) reported at a special board meeting that the credit union’s income had been negative for 2017, even though it was not. Whatever the reason for Ms. Tidwell’s termination, in an email to the credit union’s members announcing her departure, the credit union’s Board of Directors stated:
For over 62 years our members have put their trust in our staff, including the leadership provided by our Board of Directors and our management team, to serve their financial needs. Today, HMFCU Board of Directors would like to continue to earn that trust by announcing the departure of Janet Tidwell as CEO.
Over the years Holston Methodist Federal Credit Union has provided trustworthy service to thousands of members with a wide range of financial needs. We are dedicated to maintaining that trust and high quality service for many years to come. We remain firm in our Mission Statement, “To be a safe and sound credit union which provides unique, beneficial service to the membership in the spirit of mutual and authentic caring.”
Ms. Tidwell ultimately sued the credit union, the Board Chairman, and the Chair of its Supervisory Committee regarding the above events, asserting several claims. First, she claimed that her firing violated the Tennessee Public Protection Act—Tennessee’s whistleblower and retaliatory discharge law.[1] Second, Ms. Tidwell alleged that the email announcing her departure defamed her and placed her in a false light. Third, Ms. Tidwell alleged that the Chairman’s report about the credit union’s income defamed her and placed her in a false light as well. After all of her claims were dismissed in the trial court for failure to state any legally cognizable claim for relief, she appealed to the Tennessee Court of Appeals, which similarly held that every claim in Ms. Tidwell’s lawsuit must be dismissed outright as a matter of law.
As to her whistleblower claim, the Court of Appeals observed that Ms. Tidwell did not “allege that she reported her employer’s alleged wrongdoing to anyone besides [the credit union’s Board Chairman and the Chair of its Supervisory Committee].”[2] Such a defect is fatal to a whistleblower claim, however, which requires a report to someone other than the alleged wrongdoer. As the Tennessee Supreme Court explained in Haynes v. Formac Stables, Inc.:
[T]he public policy underlying [Tennessee’s] whistleblower protections precludes relief for an employee who merely reports unlawful activity to the person responsible, even when that person is the manager, owner, or highest authority within the company.
* * * *
When an employee reports wrongdoing only to the wrongdoer—who is already aware of his or her own misconduct—there has been no exposure of the employer’s illegal or unsafe practices. Such an employee necessarily fails to ‘blow the whistle’ in a meaningful fashion because the employee has made no ‘effort[ ] to bring to light an illegal or unsafe practice.’[3]
Consequently, Ms. Tidwell’s retaliatory discharge claim was dismissed for failure to state a claim.
The Court of Appeals easily dispatched Ms. Tidwell’s defamation and false light claims as well. Regarding the allegedly defamatory email, the Court explained:
[T]he email is not capable of conveying a defamatory meaning. First, the statements are factually true because Plaintiff was indeed departing the credit union, and Plaintiff does not allege that any part of the email is false. See Stones River Motors, 651 S.W.2d at 719. Second, the words of the email are not reasonably construable as holding Plaintiff up to public hatred, contempt, or ridicule. Davis, 2015 WL 5766685 at *3. Accordingly, we conclude that no cause of action for libel arises from Plaintiff’s allegations concerning the email announcement of her departure from the credit union.
For the same reason, the email could not be considered “highly offensive to a reasonable person,” either—a requirement to sustain a false light claim.[4] Further, the theory underlying Ms. Tidwell’s false light claim—that because the statements in the email were the same as those that had been used by a different credit union after its executive was convicted of theft, the email implied that she was a criminal—was something known only to one of the people she was suing. As a consequence, the Court of Appeals held that “a recipient of the email announcement at issue here could not have understood that similar misconduct was being imputed to Plaintiff,” and thus, “[t]he statements in the email announcement are not susceptible to inferences that would cast Plaintiff in a false light.”[5]
Last, as to the statements made during the specially called Board meeting several months after Ms. Tidwell’s termination, the Court of Appeals found that this theory of liability was not cognizable, either, for multiple reasons.
First, as previously, the statement could not be construed as a serious threat to Ms. Tidwell’s reputation.
Additionally, the Court of Appeals explained:
[T]o constitute “publication” or “publicity,” which are essential elements of libel and false light invasion of privacy[, i]t is well settled that “communication among agents of the same corporation made within the scope and course of their employment relative to duties performed for that corporation are not to be considered as statements communicated or publicized to third persons.”[6]
Here, however, because “members of the credit union, the Board, Defendant Shell as Chairman of the Board, the Supervisory Committee, and Defendant Lee as Chair of the Supervisory Committee, were business associates in the “‘need to know’ pipeline[,]” the Court of Appeals held that “the communication of the information contained in the audit report to individuals within the credit union does not constitute a “publication” or “publicity.”[7]
Taken together, the Court of Appeals’ opinion in Tidwell v. Holston Methodist Federal Credit Union represents a refreshingly thorough and skeptical review of frivolous speech-based tort claims. Beyond its solid analysis, several aspects of the opinion are commendable. To begin, the Court of Appeals reaffirmed the material difference between defamation claims and claims for defamation by implication or innuendo, which are distinct but are nonetheless frequently conflated. See id. at n.2 (“In her brief, Plaintiff argues that a ‘defamation by implication or innuendo claim’ purportedly arises from the email announcement. Such a claim was not presented to the trial court and is not pleaded in Plaintiff’s amended complaint, so we will not consider it.”). Further, the Court of Appeals refused to allow the Plaintiff to alter her allegations during appeal through novel argumentation in order to avoid dismissal and trigger costly discovery—a frequent tactic in SLAPP-suits as well. See id. at n.6 (“Plaintiff now alleges for the first time that Defendant Shell, through the Board, presented the findings of the audit report to the Holston Conference at large. Plaintiff cannot craft new allegations on appeal.”). Further still, and perhaps most importantly, by appropriately finding that, notwithstanding a plaintiff’s allegations of reputational harm, a statement must clear a high bar of objective severity in order to be libelous and survive a motion to dismiss, the Court of Appeals has helped guard against future SLAPP-suits going forward, which now trigger an automatic award of attorney’s fees when dismissed for failure to state a claim as a result of the Tennessee Public Participation Act—Tennessee’s new anti-SLAPP statute.
Read the Court of Appeals’ unanimous opinion in Tidwell v. Holston Methodist Credit Union, et al., authored by Judge John W. McClarty, here.
Daniel Horwitz is a free speech lawyer who represents clients across Tennessee. If you would like to purchase a consultation from him, you can do using the form below.
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[1] See Tenn. Code Ann. § 50-1-304(b).
[2] JANET TIDWELL v. HOLSTON METHODIST FEDERAL CREDIT UNION, ET AL., No. E2019-01111-COA-R3-CV, 2020 WL 3481537 (Tenn. Ct. App. June 25, 2020).
[3] Haynes v. Formac Stables, Inc., 463 S.W.3d 34, 40 (Tenn. 2015) (quoting Collins v. AmSouth Bank, 241 S.W.3d 879, 885 (Tenn. Ct. App. 2007)).
[4] The Tennessee Court of Appeals has never held directly that the “reasonably construable as holding Plaintiff up to public hatred, contempt, or ridicule” standard required to sustain a defamation claim and the “highly offensive to a reasonable person” standard required to sustain a false light claim are identical, though it frequently considers the requirements in tandem. See, e.g., Loftis v. Rayburn, No. M2017-01502-COA-R3-CV, 2018 WL 1895842, at *8 (Tenn. Ct. App. Apr. 20, 2018) (“For the reasons we found the statements in Mr. Myers’ article fail to imply a defamatory meaning, we also find they are not susceptible to the requisite inferences casting Mr. Loftis in a false light. See West, 53 S.W.3d at 645 n.5. We do not believe a reasonable person would be justified, in the eyes of the community, of being seriously offended and aggrieved by the statements at issue.”).
[5] Tidwell, 2020 WL 3481537.
[6] Id. (quoting Woods v. Helmi, 758 S.W.2d 219, 223 (Tenn. Ct. App. 1988) (interpreting Freeman v. Dayton Scale Co., 19 S.W.2d 255 (Tenn. 1929))).
[7] Id.