Several media outlets recently reported on former ING Financial Services trader Anthony Rotondi, who was ejected from a New York Knicks game at Madison Square Garden (MSG) on January 7, 2014.
The allegations are that he was attending the game with his supervisor and two clients using his employer’s season tickets. During the fourth quarter, Mr. Rotondi allegedly heckled All-Star power forward Carmelo Anthony, shouting, “Carmelo, you stink!” If true, this would arguably be one of the more banal heckles directed at Mr. Anthony. A trier of fact may also note that MSG has often hosted some of professional sports’ most accomplished hecklers, including the critically acclaimed director Spike Lee. Mr. Rotondi was reportedly upset that the Knicks had blown a 14-point fourth-quarter lead against the struggling Detroit Pistons, though the Knicks rallied in the final minutes to secure a narrow victory.
What happened next is disputed. At some point, Mr. Rotondi was removed from MSG and charged with criminal offences, including tampering with a sports contest and criminal trespass. The lawsuit alleges that MSG did not simply eject Mr. Rotondi from the arena but also contacted his employer, alleging that he used profane and vulgar language, was abusive with security, and refused to produce his ticket when asked.
This unusual situation raises interesting legal questions, particularly concerning liability for pure economic loss due to negligent misstatement, a principle first developed by the British House of Lords in the seminal 1964 case Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd., [1964] AC 465.
Before Hedley Byrne, a plaintiff could not recover damages resulting from a negligent misstatement made by a party with whom the plaintiff had no contractual relationship. In that case, the plaintiff, an advertising agency, received a large order from a company called Easipower. Before accepting the order, Hedley Byrne asked the defendant, Heller & Partners Ltd., about Easipower’s creditworthiness. Heller & Partners, responsible for Easipower’s banking, confirmed that Easipower was creditworthy, which proved false as Easipower became insolvent, leaving Hedley Byrne with a substantial unpaid bill. The House of Lords held that the relationship between Heller & Partners and Hedley Byrne was sufficiently close that Heller & Partners ought to have known Hedley Byrne would rely on their information, and that financial loss could result from inaccuracy.
While this principle is infrequently applied in employment law, Mr. Rotondi’s claim may present an example of a recoverable claim for pure economic loss against a third party. For instance, it is debatable whether “Carmelo, you stink!” constitutes profane or vulgar language. It is not difficult to imagine a prime-time sitcom character uttering a similar phrase. If MSG represented to ING that Mr. Rotondi used profane language and this representation was false, Mr. Rotondi could argue that MSG misled his employer, and that these misleading representations directly resulted in his termination.
Similarly, if Mr. Rotondi was not abusive with security, and MSG communicated otherwise to his employer, ING might be responsible for his lost wages. Analogous claims arise in the context of employee references. Many employers prefer to provide a simple “confirmation of employment” letter rather than a qualitative recommendation because if a subsequent employer relies on a misleading positive reference and suffers losses as a result of the employee’s incompetence, liability could potentially extend to the party who gave the recommendation.
The takeaway is clear: legal advice should be sought before making representations about an employee or former employee to an employer or potential employer. Third parties may be held liable for employment-related damages if their communications are misleading and result in the loss of employment.