Lawsuit Against JPMorgan Executive Raises Question of Defamation of Defendants

By Jill Kahn Marshall

Over the last few weeks, a lawsuit brought by a former JPMorgan Chase banker alleging sexual harassment and assault against the bank and a senior executive within its leveraged finance division has made headlines. The salacious complaint alleges that the executive subjected the plaintiff to sexual harassment, sexual assault, and retaliation during his employment. It also alleges that the bank defamed the plaintiff when it made derogatory claims about him to others in the financial services industry post-employment. JPMorgan and the executive have denied the allegations, and the bank has stated that an internal investigation found no evidence substantiating the plaintiff’s claims.

Although the plaintiff filed the complaint anonymously as “John Doe,” the defendant executive was publicly identified as required in civil litigation. The plaintiff’s identity has since also been reported in the media. Regardless of whether the allegations are ultimately proven true or false, the litigation has already generated significant reputational consequences for both the senior executive and the bank. The now-public dispute took another turn after reports emerged that JPMorgan had allegedly offered the plaintiff $1 million to resolve the matter prior to litigation. While settlement negotiations are generally understood not to constitute admissions of liability under Federal Rule of Evidence 408 and its state and local counterparts, public disclosure of those discussions can nevertheless alter how allegations are perceived outside the courtroom.

In high-profile employment disputes, reputational injury often occurs long before any adjudication on the merits. The consequences of public allegations may extend far beyond the litigation itself, implicating career prospects, professional credibility, and institutional standing. For this reason, defendants may wish to file counterclaims alleging defamation, particularly where the plaintiff himself asserts defamation claims.

However, defendants face significant legal obstacles when attempting to sue for defamation based on allegations made in a lawsuit. One of the most significant barriers is the litigation privilege, a doctrine recognized in most jurisdictions that broadly protects statements made in the course of judicial proceedings from defamation liability. The purpose of the privilege is to allow parties and attorneys to speak freely in court filings and litigation without fear that those statements will later become the basis for another lawsuit. Importantly, the privilege generally applies whether the allegations are ultimately proven true or false.

Courts have consistently held that allegedly false statements made in litigation should be addressed within the litigation itself, not through separate defamation lawsuits. As long as the statements are related to the legal proceeding, they are typically protected by an absolute privilege. That protection extends not only to statements made in court, but also to allegations contained in complaints and other publicly filed documents.

There are limited exceptions. A party may still bring claims for malicious prosecution or abuse of process if it can be shown that the lawsuit was filed without a legitimate basis or for an improper purpose. But those claims are difficult to prove. For example, malicious prosecution claims generally require proof that the underlying lawsuit ended in the defendant’s favor and that the claims lacked probable cause from the beginning. In practice, this means that even when allegations cause serious reputational harm, defendants often have little recourse through defamation claims.

The highly publicized dispute between Blake Lively and Justin Baldoni further illustrates the strength of the doctrine. Baldoni filed a $400 million defamation lawsuit arising from Lively’s sexual harassment and retaliation allegations against him, but the court dismissed the claims on the basis of the litigation privilege. The dismissal underscores courts’ reluctance to allow defamation suits based on statements made during judicial proceedings, even when those statements receive extensive public attention and blowback for the defendants.

In an era where allegations filed in court can instantly become front-page news, the litigation privilege reflects a deliberate policy choice: encouraging plaintiffs to come forward with legitimate claims, even when doing so may result in substantial reputational harm to the accused.

This article is intended as a general discussion of these issues only and is not to be considered legal advice or relied upon. For more information, please contact RPJ Partner Jill Kahn Marshall, who counsels individuals and corporations in the areas of employment law, litigation and dispute resolution, and healthcare. Ms. Marshall is admitted to practice law in New York and Massachusetts, as well as the District Courts for Massachusetts and the Southern and Eastern Districts of New York.