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Judges Allow Libel Suit Over Exec’s Mass Email

(CN) - In a libel ruling that hinged on actual malice, the 1st Circuit allowed a former Staples employee to sue an executive for libel after he emailed 1,500 other employees about his reasons for firing the plaintiff.

Alan Noonan was fired from his job as office-supply salesman for allegedly padding expense reports. He also lost his severance benefits and stock options because he was fired "for cause."

Executive Vice President Jay Baitler sent an email to 1,500 employees, announcing that Noonan had violated the company's travel and expense policy.

The company's investigation revealed that Noonan often estimated his travel expenses in advance and occasionally shifted the decimal point two places to the right, resulting in items such as a $1,129 meal at an airport McDonald's, instead of a $11.29 meal.

Noonan sued for libel and breach of contract, and the district court granted summary judgment to Staples.

On appeal, the Boston-based federal appeals court ruled that Noonan had actionable case for libel, even though the statements in the email were true.

"Under Massachusetts law, even a true statement can form the basis of a libel action if the plaintiff proves the defendant acted with actual malice," Judge Torruella wrote.

Torruella reversed the district court's ruling after finding that Baitler had demonstrated actual malice in his mass email.

"In Baitler's 12 years with the company," Torruella wrote, "he had never previously referred to a fired employee by name in an email or other mass communication."

However, because Noonan was fired for cause, Torruella held that he was not entitled to his severance benefits or stock options.

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