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7th Circuit

In his 16 years as an in-house lawyer with CNA Financial Corp., Dan Popko had a spotless record. He started out as an attorney with Continental Insurance Co. in 1983 and remained with the company when it merged with CNA in 1995. He eventually became a trial specialist in the company's Downers Grove, Ill., office. His performance reviews were consistently glowing.

The one thing that marred Popko's career was a personal feud with his direct supervisor, Steven Tefft. In 1998 CNA put the squeeze on the legal department's budget, and made plans to eliminate some attorneys. Rumors circulated that Tefft's position would be one of those eliminated. Around that time, Tefft conducted Popko's annual performance review, and gave him a significantly worse review than any he had received in the past. Regardless of the tense situation, Popko left on his long-planned two-week honeymoon in early July 1999.

Michael Rathsack, who represented Popko on his appeal, believes the decision leaves the corporate privilege intact while extending defamation law to an area where it's sorely needed. He argues that if employees in a situation such as Popko's aren't allowed to sue for defamation, false information could follow them for the rest of their careers.

"Our argument was that if there's anywhere you need the protection of the right to sue for defamation, it's within your place of work," Rathsack says. "If you come up with 15 scenarios in which someone calls you a thief--one at work and 14 outside of work--I'm sure that the most damaging one is inside the work context. There is a corporate privilege, but it's qualified."

staff Writer

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