Defamation lawsuit can proceed

In a former employee’s defamation action based on allegedly false accusations by a former co-worker, the court lacked jurisdiction over the California-based co-worker, but respondeat superior claims against the employer could move forward, the 4th U.S. Circuit Court of Appeals has ruled.

Ian Auckland was fired after his former co-worker, Hilary Zachry, alleged he made an unwelcome, sexually explicit comment to her. Auckland sued Zachry and his former employer, Gilead Sciences, bringing state law defamation claims.

The district court dismissed the claims against both defendants, finding that it lacked personal jurisdiction over Zachry — who lived and worked in California — and that Auckland failed to state a claim for vicarious liability against Gilead.

On appeal, the 4th Circuit affirmed in part and reversed in part.

“We agree that the district court lacked personal jurisdiction over Zachry,” Judge Pamela A. Harris wrote in an unpublished opinion June 9. “But we conclude that Auckland sufficiently stated a claim for vicarious liability against Gilead under
Virginia law, which recognizes a presumption in favor of vicarious liability under conditions satisfied at this stage in the case.”

Judge DeAndrea Gist Benjamin joined the 24-page opinion in Auckland v.
Gilead Sciences, Inc. (VLW 026-2-209), while Judge J. Harvie Wilkinson III filed an opinion concurring in part and dissenting in part.

Neither Thomas E. Strelka of Virginia Employment Law in Roanoke, who represented Auckland, nor Boston attorney Jonathan M. Albano of Morgan, Lewis & Bockius, who represented the defendants, responded to a request for comment.

Defamation claims dismissed

Auckland worked for Gilead, a biopharmaceutical company, for over nine years. Gilead is headquartered in California, but Auckland lived in Southwest Virginia and worked remotely from his home.

In 2023, Auckland applied for a preceptorship program Gilead started through its Key Accounts Team, which Auckland had to apply for. Later that summer, he attended a work conference in Nashville, Tennessee, and met Zachry, a Key Accounts Team member who lived and worked in California and served as a mentor for the program.

Auckland and Zachry had one brief conversation, during which he told her that he had applied for the preceptorship program. According to Auckland, nothing about the conversation was remarkable and the two did not speak again.

Although Auckland was accepted into the program, a few weeks later the company’s human resources department informed him that he was being investigated for allegedly telling Zachry “I want to rip your panties off” during their Nashville conversation. He denied making any such comment but was terminated.

After his termination, Auckland spoke with another Gilead employee, Buffy
Moran, who told him Zachry did not want him to receive the preceptorship position and devised a plan to remove him from consideration so that her preferred candidates would be chosen instead.

To carry out this plan, Auckland alleged, Zachry falsely told another co-worker that Auckland made the alleged sexually explicit comment to her in Nashville.

Auckland sued Zachry and Gilead in the Western District for defamation.

The district court granted the defendants’ motion to dismiss: Zachry for lack of personal jurisdiction and Gilead for failure to state a claim that it could be held vicariously liable for Zachry’s conduct.

Auckland appealed.

Insufficient minimum contacts

Beginning with Zachry, the court affirmed dismissal for lack of personal jurisdiction, finding that she did not have sufficient “minimum contacts” with Virginia
such that requiring her to litigate there would not “offend traditional notions of fair play and substantial justice.”

Auckland argued that Zachry had regular, work-related contact with Moran, whom she knew to be a resident of Virginia,
and engaged in a specific text message conversation with Moran where she communicated about her allegedly defamatory accusations.

“The first class of activities — general work communications with Moran — cannot support specific personal jurisdiction over Zachry in this case,” the court wrote. “[T]he relevant question is not only whether the defendant directed activities at the forum state, but also whether those ‘contacts with the forum state form the basis of the suit.’ … Zachry’s general work related communications with Moran are unconnected to, and in no way form the basis of, Auckland’s defamation claims against Zachry — and are thus irrelevant to the personal jurisdiction inquiry here.”

For similar reasons, the specific text conversation identified by Auckland did not establish personal jurisdiction over Zachry.

“The problem for Auckland is that the single conversation he relies on contains no mention of the allegedly defamatory statements at issue, as evidence from jurisdictional discovery established,” the court said. “Because the purportedly defamatory statements were not discussed, this conversation could not ‘form the basis’ for Auckland’s defamation suit.”

Vicarious liability claim revived

Under Virginia law, an employer can be vicariously liable for the tortious act of its employee if the employee was performing her employer’s business and acting within the scope of her employment.

Plaintiffs claiming vicarious liability under Virginia law also benefit from “a unique presumption,” the court explained. Once the complaint alleges the existence of an employment relationship at the time of the employee’s tort, the law recognizes a rebuttable presumption that facts exist that would satisfy the test for vicarious liability.

While the district court recognized the presumption, it did not seem to have actually applied it, the court said.

Zachry’s allegedly defamatory accusation may well have been within the scope of her employment if a Gilead policy encouraged employees to report sexual harassment, or Gilead otherwise provided guidance on when or how to report sexual harassment, the court said, as the allegations in the complaint made it possible to hypothesize that Zachry’s alleged defamation occurred while she was performing a specific job-related service.

“It is easy to imagine that preceptors had some role in selecting program participants,” the court wrote. “And if that is so, then the conduct alleged by Auckland — making a false accusation in order to oppose a disfavored candidate and to advance more favored candidates — would fall squarely within this portion of Zachry’s job responsibilities.”

The court acknowledged that the rebuttable presumption was just that — rebuttable — and that Gilead would have an opportunity to marshal “positive facts” to rebut the presumption.

“We hold only that in light of Virginia’s
rebuttable presumption and at this early
stage of litigation, Auckland’s amended complaint adequately states a claim for vicarious liability against Gilead,” the court concluded.

Judge Wilkinson disagreed, writing that “[r]espondeat superior has limits, and this case is a textbook example of where they apply.”

Auckland v. Gilead Sciences, Inc.

Issue           Did a Virginia federal court have personal jurisdiction over a California-based co-worker in a defamation suit, and did the plaintiff sufficiently allege vicarious liability against the employer for the statements?

Answer      No and yes (4th U.S. Circuit Court of Appeals)

Attorneys  Thomas E. Strelka, Virginia Employment Law, Roanoke (plaintiff); Jonathan M. Albano, Morgan, Lewis & Bockius, Boston (defendants)

• Auckland v. Gilead Sciences, Inc.