ROBERT BRATT & another [Note 1] vs. INTERNATIONAL BUSINESS MACHINES CORPORATION & others. [Note 2]

LIACOS, J. The United States Court of Appeals for the First Circuit has certified to us seven questions as to Massachusetts law raised by libel and invasion of privacy claims brought by

Page 509

the plaintiff Robert Bratt against the defendants. The plaintiffs' action against International Business Machines Corporation (IBM) was commenced in the Superior Court in Middlesex County in February, 1980. [Note 3] IBM filed a petition for removal to the United States District Court, District of Massachusetts, claiming diversity of citizenship, and the case was removed to that court. [Note 4]

The defendants moved in Federal court for summary judgment on all counts of Bratt's amended complaint. In November, 1982, a judge of the United States District Court for the District of Massachusetts granted the motions for summary judgment, and Bratt appealed. [Note 5] Following oral argument by the parties, the Court of Appeals for the First Circuit certified the questions of law to this court.

We conclude as follows with respect to the libel law questions. For a defendant in a libel case to lose a conditional privilege to publish defamatory material by "unnecessary, unreasonable or excessive publication," Galvin v. New York, N.H. & H.R.R., 341 Mass. 293, 297-298 (1960), the plaintiff must prove that the defendant published the defamatory information recklessly. An employer has a conditional privilege to disclose defamatory information concerning an employee when the publication is reasonably necessary to serve the employer's legitimate interest in the fitness of an employee to perform his or her job. A conditional privilege may be lost by abuse; the same standard for abuse through excessive publication applies when the defamatory material is medical information.

We also conclude, concerning the invasion of privacy claim under G. L. c. 214, Section 1B, that the disclosure of private facts

Page 510

about an employee through an intracorporate communication is sufficient publication to impair an employee's right of privacy. We further conclude that no conditional privilege exists for legitimate business communications under Section 1B. However, in evaluating whether an employer's disclosure of personal information concerning an employee constitutes an unreasonable interference with the privacy right, we would balance the employer's legitimate business interest in disseminating the information against the nature and substantiality of the intrusion. Finally, we would use the same balancing test if the information disclosed about an employee is medical information. A physician retained by the employer may disclose to the employer medical information concerning an employee if receipt of the information is reasonably necessary to serve a substantial and valid business interest of the employer.

We summarize the facts as they have been presented to us in the certification memorandum of the Court of Appeals. Bratt has been an employee of IBM since 1970 and is presently employed by the company. Bratt experienced several problems in his employment during the years 1971 through 1978. To seek resolution of these difficulties, Bratt utilized IBM's "open door policy," an internal grievance procedure which enables employees to confront higher management with their complaints should their immediate supervisors fail to resolve the problems. [Note 6]

Bratt used the open door procedure approximately four times from 1971 through 1978, to complain of not receiving promotions and salary raises that were promised him or that he believed he deserved. Bratt also utilized the open door procedure

Page 511

to complain about an evaluation of his work, which was less than he thought merited. As a result, he came to deal with the defendant Wesley Liebtag, director of personnel programs for IBM in Armonk, New York. Although Liebtag told Bratt at their first discussion that the offensive work rating would be destroyed, this did not occur until Bratt went to see Liebtag a second time.

Bratt again utilized the open door procedure when he discovered that copies of suggestions that he had made for improving certain internal company practices were missing from his files. Bratt was informed that such suggestions had not been implemented. He was troubled that these proposals, as well as his work in general, were not appreciated. Bratt again confronted Liebtag, who told Bratt that any suggestions that he made were part of his job, and he should not be seeking personal recognition for such proposals.

After the unsuccessful meeting with Liebtag, Bratt told his supervisor that he was suffering from "bad nerves," headaches, and an inability to sleep. At the supervisor's suggestion, Bratt consulted with the defendant Dr. Nugent, a general practitioner retained by IBM. Following a routine physical examination, Dr. Nugent called Bratt's supervisor and expressed her opinion that Bratt was paranoid and should see a psychiatrist immediately. Bratt's supervisor relayed this information to her supervisor who, in turn, disclosed this to Liebtag. Liebtag made a memorandum for his file, summarizing the conversation.

Subsequently, Bratt's latest open door grievance was denied. Bratt was so informed. One of his supervisors then called Liebtag to relay Bratt's reaction. Liebtag summarized this conversation with the supervisor and his own impressions of Bratt's behavior in a memorandum which he forwarded to two IBM managerial supervisors. The memorandum stated that Bratt went into his supervisor's office with the letter denying his latest grievance. The supervisor observed that Bratt was distraught and crying. The supervisor made an appointment for Bratt with a psychiatrist. Liebtag wrote that this latest episode indicated that Bratt appeared to have a mental problem that went beyond IBM. He concluded that the corporate medical

Page 512

director should communicate with Bratt's psychiatrist in order to obtain, within the company, an expert appraisal of Bratt's condition.

Although Liebtag averred in his affidavit that only two managerial supervisors received copies of this memorandum, Bratt contends that approximately sixteen people within IBM learned about his condition. Bratt also disputes the accuracy of his diagnosis as paranoid.

The manager's manual used by IBM provides, in relevant part, that "[p]rior approval of the employee . . . will be obtained before either disclosing or seeking confidential medical information, except in an emergency or where such disclosure is required by law." The manual also provides that confidential medical information will not be provided to "managers or Personnel" without an employee's prior consent.

Bratt's libel claim is based on Liebtag's distribution of the memoranda that he made concerning Bratt's mental condition. Bratt's claim for invasion of privacy under G. L. c. 214, Section 1B, is premised on two grounds. First, that IBM violated Bratt's right of privacy by disclosing information about his use of the open door policy to personnel who should not have received this information. Second, that there was an improper disclosure of Dr. Nugent's description of Bratt as paranoid.

1. Libel claim. a. Questions 1 and 2 [Note 7] (defendant's conditional privilege and the standard for abuse of the privilege). Massachusetts courts have recognized that a person may possess a conditional privilege to publish defamatory material if the publication is reasonably necessary to the protection or

Page 513

furtherance of a legitimate business interest. See Retailers Commercial Agency, Inc., petitioner, 342 Mass. 515, 520 (1961); Galvin v. New York, N.H. & H. R.R., 341 Mass. 293, 296 (1960). [Note 8] See also Restatement (Second) of Torts Section 594 comment f, at 266 (1977) (conditional privilege in making defamatory statements exists where publisher has lawful pecuniary interest in making the publication); comment e, at 265 (in determining whether an interest not given direct legal protection warrants protection by conditional privilege, courts should weigh publisher's interest in the defamatory matter, should it be true, against harm to plaintiff's reputation by disclosure of false information).

In Galvin v. New York, N.H. & H.R.R., supra, we recognized that an employer has a conditional privilege to use defamatory language to ascertain the identity of a person who allegedly stole goods from the business. We decided, however, that loud and repeated public accusations concerning the plaintiff constituted an abuse of the conditional privilege "by an unnecessary, unreasonable or excessive publication of the defamatory matter." Proof of "actual malice" was not a prerequisite to loss of the privilege. Id. at 297, 298.

We did not specifically state in the Galvin case whether negligence or recklessness was the threshold standard for determining whether a conditional privilege was lost by publication of defamatory matter. However, our description of the misconduct in Galvin as unreasonable or excessive, as well as something less than "actual malice," appears to favor recklessness or "malice in fact" as the standard. See also Doane v. Grew, 220 Mass. 171, 176 (1915) (conditional privilege in defamation action lost by proof of "malice in fact"; proof of "malice in fact" can be made in a number of ways). [Note 9]

Page 514

Massachusetts case law and the Restatement of Torts support the view that recklessness should be the minimum level of misconduct which results in loss of a conditional privilege. In Retailers Commercial Agency, Inc., petitioner, supra, we stated that a mercantile agency possesses a conditional privilege in communicating credit information to a client, since these agencies fulfil a legitimate business need. We stated also that an agency can abuse the privilege and become liable for transmitting defamatory credit information if the plaintiff proves that the communication was motivated by malice or was an unnecessary, unreasonable, or excessive publication. Further interpreting this rule, we stated that "[m]alice in uttering false statements may consist either in a direct intention to injure another, or in a reckless disregard of his rights and of the consequences that may result to him." Id. at 521, quoting Gott v. Pulsifer, 122 Mass. 235, 239 (1877). We also rejected the view that mere negligence would destroy the privilege: "This view . . . would place undue limitations on communications which the law seeks to protect." Retailers Commercial Agency, Inc., petitioner, supra at 522.

Our cases have recognized that a conditional privilege may be abused, and lost, in a number of ways. See Restatement (Second) of Torts Section 599 comment a, at 286 (1977). In Tosti v. Ayik, 386 Mass. 721, 726 (1982), we stated: "One manner of such abuse is publication with knowledge of falsity or with reckless disregard of the truth. [Note 10] In Sheehan v. Tobin, 326 Mass. 185, 192 (1950), we stated: "The rule long established by this court is `that an occasion which would justify such a communication may be abused in such a manner as to deprive the party making it of the excuse of privilege . . . The jury may . . . [find for the plaintiff] from proof that the defendant knew the charges to be false, or had no reason to believe them to be true [and] also from the terms in which the communication

Page 515

is made.'" Id., quoting Atwill v. Mackintosh, 120 Mass. 177, 183 (1876). [Note 11] Cf. Ezekiel v. Jones Motor Co., 374 Mass. 382, 390-391 (1978) (defendant employer could lose privilege of communicating reasons for plaintiff's discharge to union grievance board if statements made out of actual malice or reckless disregard for plaintiff's discharge to union grievance board if statements made out of actual malice or reckless disregard for plaintiff's rights). The policy reasons behind the recognition of a conditional privilege impel us to conclude that whatever the manner of abuse, recklessness, at least, should be required.

We therefore conclude that loss of a defendant's conditional privilege in a defamation action through "unnecessary, unreasonable or excessive publication" requires proof that the

Page 516

defendant acted recklessly. Accordingly, we answer the first question, "Yes." To the second question we respond, "No."

b. Question 3 [Note 12] (conditional privilege where medical information published; standard for abuse of the privilege). Massachusetts case law has not determined the issue whether the same standard for abuse of the conditional privilege would apply to a defendant employer when the defamatory material published is medical information. Precedents in other jurisdictions, as well as treatise authority, persuade us that the same standard should be used. Several courts have recognized that "[e]mployers . . .have a legitimate need . . . to determine whether or not their employees are professionally, physically, and psychologically capable of performing their duties." Hoesl v. United States, 451 F. Supp. 1170, 1176 (N.D. Cal. 1978), aff'd 629 F.2d 586 (9th Cir. 1980). [Note 13] See Cochran v. Sears, Roebuck & Co., 72 Ga. App. 458, 461 (1945). It appears equally settled that "a communication respecting

Page 517

the character of an employee . . . is qualifiedly privileged if made in good faith by a person having a duty in the premises to one who has a definite interest therein." Leonard v. Wilson, 150 Fla. 503, 505 (1942), quoting 33 Am. Jur. Libel Section 173, at 168 (1941). See Doane v. Grew, 220 Mass. 171, 177-178 (1915) (person discussing character and capabilities of former servant with prospective employer has qualified privilege); Sheehan v. Tobin, supra at 190-191 (conditional privilege exists where publisher and recipient have common interest and communication reasonably calculated to further that interest). Restatement (Second) of Torts Section 596, at 274-276 (1977) (same). Thus, courts have considered as conditionally privileged disclosures by employers of defamatory medical information concerning employees which is relevant to the employees' fitness to perform their work. See Hoesl v. United States, supra at 1176; Leonard v. Wilson, supra at 505, 509; Cochran v. Sears, Roebuck & Co., supra. We accept the principle that an employer can lose this privilege only if the plaintiff proves that the disclosure resulted from an expressly malicious motive, was recklessly disseminated, or involved a reckless disregard for the truth or falsity of the information.

Thus, our answer to question 3 is, "Yes."

2. Breach of privacy claim. a. Question 1 [Note 14] (intracorporate communications and the right of privacy). General Laws

Page 518

c. 214, Section 1B, inserted by St. 1974, c. 193, Section 1, provides, in pertinent part, that "[a] person shall have a right against unreasonable, substantial or serious interference with his privacy." This court has interpreted Section 1B to proscribe the required disclosure of facts about an individual that are of a highly personal or intimate nature when there exists no legitimate, countervailing interest. See, e.g., Cort v. Bristol-Myers Co., 385 Mass. 300, 307-308 (1982); id. at 312 (Abrams, J., concurring) (reasonableness of requiring employee to disclose personal facts must be weighed against employer's valid business interests). Cf. Commonwealth v. Wiseman, 356 Mass. 251, 261-262 (1969) (prohibiting general public viewing of film depicting State mental patients to protect patients' privacy, yet allowing film to be shown in medical, academic, and legal settings, since public interest in improving State institutional facilities outweighs privacy interest).

Although we have never decided directly whether an intracorporate communication amounts to a sufficient publication under Section 1B, our dicta in privacy cases and our decision on this issue in a libel case prove instructive. In Bander v. Metropolitan Life Ins. Co., 313 Mass. 337, 348 (1943), we decided that a defamatory communication between agents of the same corporation, with reference to some aspect of corporate business, constitutes a publication for purposes of maintaining a libel action. Accord Arsenault v. Allegheny Airlines, Inc., 485 F. Supp. 1373, 1379 (D. Mass.), aff'd, 636 F.2d 1199 (1st Cir. 1980), cert. denied, 454 U.S. 821 (1981). Cf. Riceman v. Union Indem. Co., 278 Mass. 149, 151-152 (1932) (defendant surety company's transmittal of defamatory material in letter sent to different division of company sufficient to sustain allegation of publication). In Cort v. Bristol-Myers Co., supra, we indicated that to require intracorporate disclosure from employees of unreasonably intrusive, personal information in response to an employer's questionnaire would constitute a violation of the principles of G. L. c. 214, Section 1B. Id. at 306-307, 308 n.9. Although no Section 1B action could be maintained in the Cort case because questions asked were not inappropriate, and, possibly because the employees refused to answer, or gave

Page 519

frivolous responses to, certain questions, we acknowledged that a factual situation could exist where an intracorporate disclosure of intrusive facts would give rise to an invasion of privacy claim. Id. at 307, 310. Cf. Broderick v. Police Comm'r of Boston, 368 Mass. 33, 44 (1975), cert. denied, 423 U.S. 1048 (1976) (answering police commissioner's questionnaire regarding alleged misconduct would not infringe police officers' privacy rights because officers relinquished these rights by publicly engaging in conduct under investigation).

We conclude that the disclosure of private facts about an employee among other employees in the same corporation can constitute sufficient publication under the Massachusetts right of privacy statute. [Note 15]

Thus, we answer question 1, "Yes."

b. Questions 2 and 3 [Note 16] (legitimate business communications balanced against right of privacy). Massachusetts case law does not recognize a conditional privilege, as such, for legitimate

Page 520

business communications under the right of privacy statute. We have concluded previously, however, that because Section 1B proscribes only unreasonable interferences with a person's privacy, legitimate countervailing business interests in certain situations may render the disclosure of personal information reasonable and not actionable under the statute. See, e.g., Cort v. Bristol-Myers Co., supra at 308, 310; id. at 312 (Abrams, J. concurring); Commonwealth v. Wiseman, supra at 262. Cf. Hastings & Sons Publishing Co. v. Treasurer of Lynn, 374 Mass. 812, 817-818 (1978) (even if payroll records of municipal employees considered highly personal information, their disclosure, under public records statute, not unreasonable, given paramount right of public to know salaries of public servants).

We acknowledged in Cort, however, that "in the area of private employment there may be inquiries of a personal nature that are unreasonably intrusive and no business of the employer and that an employee may not be discharged with impunity for failure to answer such requests." [Note 17] ld. at 308 n.9. In evaluating whether the information sought from employees could amount to an unreasonable interference with their right of privacy, we stated that the employer's legitimate interest in determining the employees'effectiveness in their jobs should be balanced against the seriousness of the intrusion on the employees' privacy. Id. at 308. Cf. Cefalu v. Globe Newspaper Co., 8 Mass. App. Ct. 71, 77 (1979) (right of privacy based on concept that certain conduct of individual is personal and confidential, and of no concern to public). An employer thus may seek certain personal information concerning an employee when the importance of the information in assessing the employee's

Page 521

efficacy in his work outweighs the employee's right to keep this information private. [Note 18]

In response to question 2, we conclude that no conditional privilege for legitimate business communications exists under the Massachusetts right of privacy statute. However, an employer's obtaining and disclosing of personal information concerning an employee may not amount to an unreasonable interference with the employee's right of privacy in violation of Section 1B. In determining whether there is a violation of Section 1B, it is necessary to balance the employer's legitimate business interest in obtaining and publishing the information against the substantiality of the intrusion on the employee's privacy resulting from the disclosure. [Note 19]

Therefore, we answer question 2, "No," with qualifications. Based on our answer to question 2, we decline to answer question 3.

c. Question 4 [Note 20] (employer's interest in medical information balanced against employee's privacy right and interest in

Page 522

confidentiality of medical data disclosed to physician). We have stated that no conditional privilege for legitimate business communications exists under our right of privacy statute. However, we would balance an employer's valid business interest with the employee's right to privacy in determining whether disclosure of private facts about an employee resulted in an actionable invasion of privacy. We would adhere to the same balancing test when medical information about an employee is disclosed by an employer.

We recognize a patient's valid interest in preserving the confidentiality of medical facts relayed to a physician. [Note 21] See Hannaway v. Cole, 2 Mass. App. Ct. 847, 848 (1974). [Note 22]

Page 523

patient should be entitled to freely disclose his symptoms and condition to his doctor in order to receive proper treatment without fear that those facts may become public property. Only thus can the purpose of the relationship be fulfilled." Hague v. Williams, 37 N.J. 328, 336 (1962). [Note 23]

Although "ordinarily a physician receives information relating to a patient's health in a confidential capacity . . . , except where the public interest or the private interest of the patient so demands[,] . . . disclosure may, under . . . compelling circumstances, be made to a person with a legitimate interest in the patient's health." Id.

In determining whether an employee's privacy right under Section 1B is violated by his physician's disclosure of personal medical data to his employer, we would consider the degree of intrusion on privacy and the public interest in preserving the confidentiality of a physician-patient relationship balanced against the employer's need for the medical information. See, e.g., Hague v. Williams, supra (where patient's physical condition

Page 524

made basis of a legal claim, physician's extrajudicial disclosure warranted so as to ensure just result). Horne v. Patton, 291 Ala. 701, 708-709 (1973) (physician's duty not to make extrajudicial disclosures of medical data concerning plaintiff subject to exceptions where public interest or interests of patient warrant disclosure); Clark v. Geraci, 29 Misc. 2d 791, 793-794 (N.Y. Sup. Ct. 1960) (physician's duty to government and, in any event, plaintiff's consent to have doctor reveal part of his medical history to government employer justified doctor's disclosure of plaintiff's alcoholism). As we already noted, an employer may have a substantial and valid interest in aspects of an employee's health that could affect the employee's ability effectively to perform job duties. See, e.g., Pitcher v. Iberia Parish School Bd., 280 So. 2d 603, 608 (La. Ct. App. 1973) (school board could require teachers to provide annual certification by physician of their fitness to teach); Clark v. Geraci, supra at 793 (government employer may have valid interest in medical facts concerning employee which affect his capacity to do his job). In response to question 4, we conclude that when medical information is necessary reasonably to serve such a substantial and valid interest of the employer, it is not an invasion of privacy, under Section 1B, for a physician to disclose such information to the employer.