Interference with Contract

Student sues official who informed a potential employer of his arrest.

Church Law & Tax Report

Interference with Contract

Student sues official who informed a potential employer of his arrest.

Key Point 8-24. A reference letter is a letter that evaluates the qualifications and suitability of a person for a particular position. Churches, like other employers, often use reference letters to screen new employees and volunteers. Churches often are asked to provide reference letters on current or former workers. The law generally provides employers with important protections when responding to a reference letter request. However, liability may still arise in some cases, such as if the employer acts with malice in drafting a reference letter.

A Texas court dismissed a lawsuit brought by a university student against a school official who informed a prospective employer of the student’s arrest for public lewdness. A university student (the “plaintiff”) was working toward a degree in elementary education. While on his way to a student teaching assignment at an elementary school, he stopped at a men’s restroom in a public park. Another man followed him into the restroom, the two had sex, and they were subsequently arrested and charged with public lewdness. The restroom in the park was under surveillance because of numerous complaints about drug use and lewdness around children. The plaintiff pleaded no contest to the offense and was placed on deferred adjudication.

School officials decided that the plaintiff could obtain his teacher certification if two requirements were met: (1) he must make “full disclosure” about his arrest to his prospective employer, and (2) the employer must confirm in writing to university officials that he had “fully disclosed” his arrest.

The plaintiff applied for a fourth grade teaching position at a public school. He informed the principal that he had been arrested for public lewdness, but provided no other details. He prepared a letter for the principal to sign that was addressed to the university, affirming that he had been “totally forthcoming about his arrest record and has provided all documentation related to his arrest.” Because the letter “raised flags” of concern, the principal Brown placed a reference-check call to the university concerning the plaintiff. A university official (the “defendant”) referred to the existence of a newspaper article discussing the arrest. The official later testified that she told the principal about the newspaper article so that she would have the information and not be “blindsided” if a parent were to inquire about the incident.

The elementary school conducted a routine criminal background check on the plaintiff, which showed that he had received deferred adjudication for public lewdness. The plaintiff, however, had answered “No” to a question on his application that asked if he had “ever been convicted of a felony or offenses involving moral turpitude and/ or received probation or deferred adjudication.” Although the plaintiff had already been assigned a classroom and placed in paid training, the school ultimately declined to allow him to teach.

The plaintiff sued the defendant for interference with contract. The court noted that interference with contract requires proof of (1) the existence of a contract subject to interference; (2) a willful and intentional act of interference; (3) the act was the cause of plaintiff’s damages; and (4) actual damage or loss. The court concluded that the defendant’s reference to a newspaper article concerning the plaintiff during his conversation with the school principal was not a “willful and intentional act of interference.” It noted:

A willful act involves more than simple participation in some act with a breaching party. The defendant must knowingly induce one of the contracting parties to breach its obligations. There must be some act interfering with a contract or act persuading a party to a contract to breach; for example, offering better terms or other incentives. Liability for intentional interference may not be based on a simple finding that the defendant performed certain acts; there must be a finding that the defendant performed certain acts with the knowledge or belief that interference with a contract would result from that contract.

The act at issue in this case is the telephone conversation between [the defendant and the school principal] during which the defendant mentioned the newspaper article. Plaintiff alleges in his petition that the defendant “made it clear that she believed that hiring or retaining plaintiff as a teacher would embarrass both the school and the university ….” The principal stated that the defendant did not read her the article or provide her a copy …. This is the entirety of the evidence on which the plaintiff relies to support his assertion that the defendant advised the school that hiring the plaintiff would create problems; he refers to no other evidence that the defendant expressed any opinion to the principal, the only school administrator with whom she had contact, concerning his employment, and our review of the record finds no other evidence. In the defendant’s deposition, she said that she responded to the principal’s question about the plaintiff because she thought that she should have the information to “avoid being blindsided” by a parent who might have seen the article. The defendant had no previous relationship with the principal. The record does not show any further contact with the principal or any other school administrator to whom she could have communicated a negative recommendation about the plaintiff.

The court concluded that no jury could conclude that the defendant “performed an act intended to knowingly induce the school to breach its contract with the plaintiff, or that the conversation with the principal was done with the knowledge or belief that it would interfere with the plaintiff’s TISD contract. Accordingly, the defendant conclusively negated the element of tortious interference that requires a willful and intentional act …. The plaintiff produced no countervailing evidence that the defendant offered the school some inducement to breach its contract with the plaintiff or that her reference to a newspaper article served as a negative inducement for the school to breach the contract.”

The court further noted that the plaintiff had “admitted that the defendant was not acting maliciously but in the best interests of the university and the teacher education program,” which precluded a finding of willful and intentional interference with contract.

Application. Note the following considerations:

1. According to the principle of “interference with contract,” a former employer may be liable if it intentionally interferes with an existing employment relationship. To illustrate, assume that a church dismisses an employee (Jill) because of embezzlement, and Jill is later hired by another church. The pastor of the former employer discovers that Jill is now working for another employer, and he calls the employer and shares details about Jill’s embezzlement. Based on this unsolicited communication Jill is dismissed by her new employer. She later sues her former church and pastor for “interference with contract.” To prove interference with contract, Jill must demonstrate the existence of a contract (an employment relationship), and some intentional act by her former church or pastor that interfered with that contract.

2. Interference with contract requires malicious intent. The defendant must have willfully and intentionally engaged in conduct that interfered with another’s employment contract. In this case, the court concluded that the defendant’s reference to a newspaper article in her conversation with the principal could not reasonably be construed an act “intended to knowingly induce the school to breach its contract with the plaintiff.” In support of this conclusion, the court referred to the following facts: (1) the defendant did not read the article to the principal or provide her a copy; (2) the defendant expressed no opinion to the principal concerning the plaintiff’s employment; (3) the defendant communicated with no other school employee; (4) the defendant did not initiate the contact with the principal; (5) the defendant’s sole purpose in referring to the newspaper article was to prevent the principal from “being blindsided” by a parent who might have seen the article; (6) the defendant had no previous relationship with the principal; (7) the defendant had no further contact with the principal or any other school administrator to whom she could have communicated a negative recommendation about the plaintiff.

3. Some courts have extended the principle of interference with contract to the pre-employment stage, referring to this as “interference with prospective contractual relations.” This requires proof of the following elements: (1) a “reasonable probability” that the plaintiff would have entered into the prospective relationship or contract; (2) a wrongful act by the defendant that prevented the relationship from occurring; (3) the defendant did such act with a conscious desire to prevent the relationship from occurring, or knew that the interference was certain or substantially certain to occur as a result of the defendant’s conduct; and (4) the plaintiff suffered actual harm or damage as a result of the defendant’s interference.

4. Some courts have ruled that the so-called “ministerial exception” prevents them from resolving interference with contract claims involving clergy. 2008 WL 5264886 (Tex. App. 2008).

This Recent Development first appeared in Church Law & Tax Report, September/October 2009.

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