CARONE v. VENATOR GROUP INC

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Supreme Court, Appellate Division, First Department, New York.

Joseph CARONE, et al., Plaintiffs-Appellants, v. VENATOR GROUP, INC., formerly known as Woolworth Corporation, Defendant-Respondent.

Decided: October 28, 2004

BUCKLEY, P.J., MAZZARELLI, ANDRIAS, WILLIAMS, SWEENY, JJ. Scott A. Lucas, New York, for appellants. Kelley Drye & Warren LLP, New York (John M. Callagy of counsel), for respondent.

Judgment, Supreme Court, New York County (Marilyn Shafer, J.), entered April 9, 2003, which granted defendant's motion for summary judgment dismissing the amended complaint, unanimously affirmed, without costs.

Defendant employer suspended plaintiff employees, issuing a statement that, among other things, there was “concern” about unauthorized persons leaking information to analysts, and that the suspension was in connection with that internal investigation.   The statement went on to caution that the suspension was not a judgment that plaintiffs were guilty of any wrongdoing, but any employee found to have leaked information would be subject to swift disciplinary action.   Plaintiffs' offices were sealed by defendant the day after the suspension, and they were fired six weeks later, without comment.

 Plaintiffs challenge the dismissal of their defamation claims.   The statements in question were subject to the qualified “common interest” privilege, which protects good faith communications between employees and management regarding the employer's business (Present v. Avon Prods., 253 A.D.2d 183, 687 N.Y.S.2d 330 [1999], lv. dismissed 93 N.Y.2d 1032, 697 N.Y.S.2d 555, 719 N.E.2d 914 [1999] ).   Plaintiffs have not met their burden of raising a triable issue of malice, to overcome the privilege (see Shapiro v. Health Ins. Plan of Greater N.Y., 7 N.Y.2d 56, 194 N.Y.S.2d 509, 163 N.E.2d 333 [1959] ).   Their theory that management punished them in an attempt to conceal its own alleged accounting fraud is unsubstantiated by the record.   Moreover, the private investigators concluded that plaintiffs had leaked the information.   Even if management's reliance on the investigation were negligent or imprudent for some reason, that reliance would be insufficient to constitute malice, which requires a showing of reckless disregard for the truth (see Sweeney v. Prisoners' Legal Servs. of N.Y., 84 N.Y.2d 786, 622 N.Y.S.2d 896, 647 N.E.2d 101 [1995], where a failure to investigate was considered mere negligence, insufficient to support a finding of malice).