Any false or improper comment made, whether written or verbal, that damages an employee's reputation or brings him or her into contempt or ridicule in front of a prospective employer or other employees is considered defamatory and illegal under federal law. An example of defamation would be if your boss tells another supervisor that you're lazy and that you show a lack of loyalty to the company. If the false attack on your character or reputation causes you to be terminated as a result, you have the right to sue for wrongful termination. In order to win a defamation claim, employees generally must prove that the remarks made were untrue and show that an employer didn't act in good will when providing the negative information to another employer or to other employees in the workplace. Employees who are successful at winning a defamation lawsuit may be awarded punitive damages for lost earnings, mental anguish, or pain and suffering. Concerns about defamation in the workplace should not serve to deter employers from voicing their opinions. It's important to remember that a statement made as an opinion, rather than as an allegation of fact, is not defamatory. Furthermore, statements that are substantially true can't be considered defamatory either. Employers can reduce the risk of being sued for defamation by restricting the dissemination of potentially defamatory information such as charges of stealing or lying to those who truly need to know it. When providing references, employers are advised to be truthful and objective and stick to job-related facts.