INDIANA CASE LAW UPDATE: Employment at Will; Defamation v. Parody; and the Bystander Rule

Indiana courts recently addressed Indiana’s employment at will doctrine, the mutual exclusivity of defamation and parody, and the Bystander Rule.

Employment at Will Doctrine

The employment at will doctrine permits either the employee or the employer to terminate the employment at any time for any reason. The Indiana Supreme Court examined the exceptions to this doctrine and whether an employee may maintain an action for retaliatory discharge in Meyers v. Meyers, 861 N.E.2d 704 (Ind. 2007). Meyers commenced a retaliatory discharge action alleging, in part, he had been fired because of complaints he had made about his employer’s failure to pay overtime wages and failure to deposit taxes withheld from employee payroll checks. The trial court dismissed this portion of the complaint. That decision was reversed by the Court of Appeals, but affirmed by the Supreme Court on transfer. The Supreme Court found the case to be governed by Morgan Drive Away, Inc. v. Brant, 489 N.E. 2d 933 (Ind. 1986), which held that regardless of a party’s “allegations regarding status as an employee or independent contractor, the employment at will doctrine precludes him from asserting an action for wrongful discharge in retaliation for asserting a claim for unpaid wages under Indiana Code § 22-2-4-4.” The Court recognized that a retaliatory discharge claim may be asserted in limited circumstances, such as where an employee is terminated for asserting a Worker’s Compensation claim or refusing to violate a legal obligation that carries penal consequences. The Court concluded that none of these exceptions had been established in Meyer’s action.

Defamation v. Parody

Defamation is mutually exclusive of parody. By definition, defamation requires a false statement of fact. Parody, to the degree that it is perceived as parody by its intended audience, conveys the message that it is not the original and, therefore, cannot constitute a false statement of fact. These two types of speech were discussed in Hamilton v. Prewett, 860 N.E.2d 1234 (Ind. Ct. App. 2007). There, the defendant created a website titled “Paul Hamilten – The World’s Smartest Man” which involved an individual who owned a water softener company. The website included satirical customer testimonials regarding how the fictional Hamilten’s water would attract women, cure severe facial disfigurement, or raise a low intelligence quotient to the level of a rocket scientist. The website included a disclaimer which provided “The character described in this page is fictional, any similarities to a real person is [sic] coincidence and the page is meant for humor.”

The fictional Paul Hamilten shared a name with the plaintiff, except for a single letter difference in the spelling. The defendant never denied that the fictional Hamilten was a reference to Hamilton or his water softening business. Upon discovering the website, the plaintiff sued claiming, among other things, the website had defamed him. The trial court granted summary judgment in favor of the defendant and the plaintiff appealed. The Indiana Court of Appeals, noting that this was an issue of first impression, held that the website was a form of parody and, therefore, not defamation under Indiana law. Specifically, to impose liability for defamation, a false statement of fact must be proven. Parody, in contrast, involves exaggeration or distortion and is the means by which the author “clearly indicates to his audience that the piece does not purport to be a statement of fact but is rather an expression of criticism or opinion.” The court stated defamation and parody are two mutually exclusive forms of speech. Accordingly, because of the exaggerated nature of the website statements, no one reasonably could have believed the website actually contained statements of fact. Thus, the defendant was entitled to summary judgment.

The Bystander Rule

Indiana law allows a claim for negligent infliction of emotional distress under some limited circumstances even where the plaintiff has suffered no physical injury or impact as a result of the defendant’s negligence. In fact, a bystander may recover damages based on “direct involvement” with the accident. “Direct involvement” may be proven where a plaintiff actually witnessed or came on the accident scene soon after the death or severe injury of a loved one with a relationship to the plaintiff analogous to a spouse, parent, child, grandparent, grandchild, or sibling caused by the defendant’s negligence. Factors the court may consider in determining whether public policy precludes liability for bystander recovery include the “severity of the victim’s injury, the relationship of the plaintiff to the victim, and circumstances surrounding the plaintiff’s discovery of the victim’s injury.” Each factor presents an issue of law properly decided by the court.

In Smith v. Toney, 2007 WL 739867 (Ind. 2007), the Indiana Supreme Court examined the requirements for asserting a bystander claim for negligent infliction of emotional distress. The plaintiff, Smith, was engaged to marry Welch. The couple fell asleep at Smith’s home. In the early morning hours, Welch left Smith’s home, informing Smith that he would call her upon reaching his home. Welch was involved in a fatal car accident. Later, Smith awoke, realized that Welch had not called her, and decided to drive to Welch’s home. Enroute, and almost two hours after Welch had died in the accident, Smith drove by the wreckage. Smith slowed her car but did not stop or speak to anyone. Prior to Smith driving past the accident scene, Welch’s body had been removed from the automobile, placed in a body bag, and moved to the coroner’s vehicle. Smith later told her brother-in-law that she had observed her fiancée’s hand as she drove by the accident scene.

The Court first examined the “analogous to a spouse” requirement, and concluded as a matter of law that a fiancée is not analogous to a spouse and, therefore, may not recover for negligent infliction of emotional distress. The Court next examined the circumstances under which a bystander who happens onto an accident scene involving a loved one may assert a negligent infliction claim. The Court stated that “bystander” claims are not meant to compensate every emotional trauma, but are limited to those that arise from the shock of experiencing a traumatic event. Recovery will be permitted only where the bystander witnesses the accident or aftermath of an accident “minutes” after the event and while the victim remains at the accident scene. The scene viewed by the bystander must be essentially the same as it was at the time of the accident, the victim must be essentially in the same condition as immediately following the incident, and the bystander must not have been informed of the incident before witnessing the accident scene. A claim of negligent infliction of emotional distress will not be permitted where the bystander learns of the death or injury by indirect means.

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*Stephen Arthur is a partner with Harrison & Moberly, LLP (harrisonmoberly.com), in Indianapolis, concentrating his practice in federal and state complex business litigation. He is the author of Civil Trial Practice, published by West Publishing, and co-author of Professor Harvey’s Rules of Procedure Annotated. The author wishes to thank Paul Carroll for his assistance in the preparation of this case review. The opinions and analysis expressed in this column are those of the author.