Can an Employer Sue an Employee For Defamation of Character?

Workplace rumors, negative business reviews, and less-than-stellar employee reviews, are a part of doing business—but when they cross into the territory of defamation and are severe enough to cause loss of business revenue or harm to your professional reputation, you may be able to take legal action. To prove that an employee committed defamation against their employer, you must generally prove that they:

1. Made a false statement about the business,
2. Communicated or published that statement to a third party,
3. Made the statement with at least a negligible level of intent, and
4. Caused damage to the business’s reputation with their statement(s).

At Minc Law, we have proven experience litigating hundreds of defamation cases for our clients, both individuals and businesses alike. We have seen the reputational and business damage a false allegation can cause, and we help our clients form a comprehensive legal strategy to uncover anonymous defendants, file a lawsuit to recover damages, and resolve the matter quickly and discreetly.

In this article, we discuss the definition of workplace defamation, along with a few common examples. Then, we explore your options for legal recourse as an employer if you are being defamed by an employee.

Types of Employer Defamation By Employees

Today’s work landscape is a mix of digital and in-person interactions. There are countless opportunities for defamation to originate from these interactions, whether the false statements are made at the water cooler, over Zoom, or published on a popular employer review website such as Glassdoor.

What is Workplace Defamation?

Most workplace defamation occurs when an individual makes a false statement about their employer, employee, or coworker to a third party. This kind of defamation can seriously damage the victim’s professional reputation and career and damage the company’s future revenue and longevity.

What Are Some Examples of Defamation of an Employer?

The most common scenarios of defamation against a business are instigated by current or former employees. Below, we explore four frequent examples of workplace defamation.

Employer Review Websites

Online employer review sites are a commonly accepted part of the application and hiring process. Platforms like Yelp, Angie’s List, and Glassdoor help prospective employees research the company to where they are considering applying.

But not all of these reviews are trustworthy. A fabricated negative review of a business can dissuade potential talent from applying, which could give the company cause to bring a defamation claim against the poster.

It is important to note here that there is a difference between opinion and a false statement of fact. Reviewers can say “I did not like this company’s interview process” without being liable for defamation. However, if they say “I did not like this company’s interview process because they asked me illegal questions and made it clear they did not want to hire someone of my race/religion/etc.,” that statement could easily cross the line into defamation (if it is false).

Employees are entitled to share their opinions about their places of employment. But if the statement is specific enough to be proven false (for example, through employment records), it may be defamatory and actionable.

False Statements Made By the Employee to Third-Parties

In this scenario, an employee might make statements to a prospective employer, publication, or third party about how they were treated at the company. For example, the employee may falsely state that they saw the company engaging in unlawful activity or theft.

Or perhaps an employee makes a false claim in an interview with a newspaper that the catering business where they work has been frequently cited for health code violations that caused guests to become sick.

These false statements can be made to third parties online, as well. In our experience at Minc Law, we have seen some disgruntled former employees form or join Facebook groups where users can solicit positive and negative fake reviews about employers. Some of these reviews can easily cross the line into defamation.

Office Rumors

Most office rumors do not rise to the level of defamation. However, if the rumor contains actual malice or is especially harmful to the victim’s reputation, it could give rise to a defamation claim.

For example, imagine Sara is a manager at a large corporation. One of her coworkers has a grudge against her, so they spread a rumor that Sara misappropriated company money to fund a lavish vacation with one of her assistants, with whom she is having an affair. As a result of this rumor, Sara is fired and becomes the subject of a legal investigation.

If this rumor is untrue, Sara could sue her coworker for workplace defamation.

One-Star Reviews Without Commentary

A one-star review can bring down a business’s overall quality rating on the review platform where it is published. This loss in quality rating can lead to a lower ranking in search results, fewer customers, and a significant loss in revenue.

But despite the potential harm a one-star review can cause, it rarely constitutes defamation without further information. A one-star review with no commentary suggests a statement of opinion, which is protected under the First Amendment. The poster’s opinion of the business may be unfair, but it cannot be defamatory without a specific, false statement of fact.

Why Might an Employee Try to Defame an Employer?

An employee may try and defame their current or former employer for countless reasons. Some of the most common include:

• Extortion—Trying to obtain a monetary advantage from the company in exchange for removing false statements;
• Revenge—They felt mistreated or wronged by the company and are now exaggerating statements to damage the business; or
• Exaggeration out of anger—They actually had a negative experience with the company (like a contentious termination or dissatisfactory wages), but they left an online review that was embellished to the point of falsifying facts.

What Can Happen Due to Employer Defamation?

The potential consequences of employer defamation could be catastrophic. Depending on the severity and publicity of the claims, they could lead to:

• Lost advertising and sponsorships,
• Humiliation and bad press,
• Damage to the brand’s reputation and standing in the community,
• Other reviewers being comfortable leaving negative reviews,
• Regulatory investigations leading to lost licenses or professional certifications,
• Damage to employee morale,
• Difficulty retaining and hiring talent,
• Loss of existing clients and business, and
• Loss of future business and clients.

Employer Recourse in the Event of Employee Defamation

If you have been defamed by an employee and are suffering reputational and business harm as a result, you have legal options. This section provides a few tips for responding to employee defamation effectively.

What Can an Employer Do When Defamed?

If the defamer is a current employee, you can terminate or take disciplinary action against them. You can also take mitigative measures to reduce the effects of defamatory statements. Such measures might include drafting a press release or reporting the defamatory statement, review, or profile to the platform where it was published.

Before you take any action, it is wise to evaluate the situation and look for the most effective (or cost-effective) solution. And if you plan to take public action like issuing a press release or firing the employee, consider your business’s reputation and whether pursuing this action could lead to more unwanted attention.

If you plan to terminate the employee, it is best to talk to an employment law attorney to make sure you are not violating any contractual agreements. You may also want to contact the relevant local or industry labor bureau for guidance on your options, especially if your employee is a labor union member.

What Might Happen to the Employee Who Defamed Their Employer?

Defamation can lead to severe repercussions for all parties involved. The employer who is defamed may face loss of business and a damaged reputation, but the employee risks unintended blowback as well. Especially if the employee is still currently employed at the company they are defaming, they could face several consequences like:

• Probation,
• Disciplinary action,
• Being reassigned to a different department,
• Termination of employment,
• Legal repercussions, and
• A defamation lawsuit.

What Legal Action Can Be Taken in Case of Workplace Defamation?

If your business is the victim of a defamatory statement made by an employee, you may have legal remedies available to you such as a defamation lawsuit, an injurious falsehood lawsuit, or a tortious interference lawsuit.

However, it is important to consult with an employment law attorney before taking any adverse actions related to employment defamation. And before taking legal action, you should also consult with a defamation attorney about what legal claims are available to you.

How to Prove an Employee Defamed an Employer

Like individuals, defamed businesses have legal claims and remedies available to them under defamation laws. However, businesses also benefit from making more specialized claims for damages and relief that are unavailable to individuals under traditional libel laws.

State laws vary considerably, but common legal claims include:

• Business defamation,
• Injurious falsehood/trade libel, and
• Tortious interference.

Compared to traditional libel torts, business defamation claims can sometimes have additional benefits and remedies, such as a longer statute of limitations, more readily available awards of attorneys’ fees, and statutory provisions that provide multiple damage awards.

Who Can Help You Sue a Former Employee For Defamation?

Lawsuits should not be taken lightly, especially when they involve the employee/employer relationship. Before you decide to file a defamation lawsuit, you should consult with an employment law attorney to ensure it is within your rights to do so. These complex employment issues are in their realm of expertise.

Once you decide to move forward with pursuing litigation, you should reach out to an attorney, whose area of law includes defamation, copyright, online harassment, and extortion. Look for a legal team experienced in filing defamation lawsuits in your state with knowledge of the law on this subject.

If the defamatory statements about you or your business took place online, you should also look for a tech-savvy defamation lawsuit attorney who understands the latest investigational tools, web monitoring platforms, and various social media and review sites’ reporting procedures.

Reach out to the lawyer you are considering to make sure you are on the same page about your goals. Ensure these questions are clear to both of you:

• Is your goal simply to have the defamatory content taken down?
• Is your goal to hold the perpetrator liable for their actions?
• Do you want/need to recover damages for the harm your business has suffered?
• Have you considered all alternatives to litigation that might meet your goals more effectively?
• Do you want to suppress the content with online reputation management strategies and techniques?

When considering suing a former employee for defamation, finding a defamation attorney who will truly listen and serve your needs is crucial.

What Evidence is Needed to Prove Business Defamation?

As the plaintiff in a defamation lawsuit, you must establish proof of actual harm to your business or professional reputation. Such objective evidence may include:

• Lost income or revenue,
• Lost clients,
• Foregone bonuses, and
• Added expenses.

Your evidence should show the damage caused by the false statement and that a third party saw or heard the statement. You should also provide external information putting the statement into context, along with any other proof that can help show that the statement is indeed false.

Plaintiffs can document evidence of harm by:

• Taking screenshots,
• Printing documents,
• Saving a time-stamped HTML version of entire web pages (using CTRL+S on Windows or CMD+S on Mac),
• Backing up emails, and
• Using professional-grade preservation tools such as Page Vault and VisualPing.

On top of documentary evidence, you may need to prove defamation by providing witnesses to testify to the harm you suffered.

Fact witnesses give testimony from firsthand knowledge about the facts directly at issue in the case, while expert witnesses have special education or experience that makes them qualified to help the jury or judge understand the facts at hand. Additionally, character witnesses can sometimes testify to your positive character attributes (or the defendant’s negative ones).

How Do You Prove Defamation of Character of a Business?

Defamation is defined as a false statement made to a third party that damages the victim’s reputation (or the reputation of their business). The most common types of defamation are slander, which is spoken defamation, and libel, which is written.

To bring a successful claim of business defamation, you will generally need to prove the following elements:

• A false statement of fact was made about the business,
• The statement was communicated to a third party,
• The statement was made with at least a negligent level of intent, and
• It caused damage to the business’s reputation.

1. A False Statement Was Made About the Business

A defamatory statement must be an untrue statement of fact, which is both unsubstantiated and unprotected under the law. Also, a reasonable person must understand that the statement is about the plaintiff or business.

2. The Statement Was Communicated to a Third Party

To be considered defamation, the statement must be spoken to or read by a third party. If it was only shared between the plaintiff and defendant, it does not qualify as defamation.

3. The Statement Was Made With at Least a Negligent Level of Intent

To succeed in a defamation claim, the plaintiff must prove that the defendant acted with negligence—in other words, they did not take a reasonable amount of care before making the statement.

4. The Statement Caused Damage to the Business’s Reputation

Finally, the statement must have caused damage to the plaintiff’s reputation. In business defamation, damage generally takes the form of identifiable losses to the company’s bottom line.

How Do You Prove Injurious Falsehood?

Injurious falsehood takes place when the defendant makes a false and malicious statement about the plaintiff that causes harm or expense to a business. It is also referred to as commercial disparagement or business disparagement.

Injurious falsehood is generally categorized as:

• Slander of title—A false statement about a title of property made with reckless disregard for truthfulness;
• Trade libel or product disparagement—A false statement, published with malice, about the plaintiff’s product or goods; or
• Food libel or disparagement (“veggie libel”)—The same as trade libel, except that the statement alleges the food products are unfit for human consumption.

How Do You Prove Tortious Interference?

Tortious interference occurs when someone—usually a competitor—commits a wrongful act (tort) by interfering with a company’s business activities, such as stopping a deal from taking place. Some cases of tortious interference include posting enough negative reviews that a business loses customers and revenue.

To succeed in a tortious interference claim, most states require the plaintiff to prove the following core elements:

• Contract: A valid relationship or contract exists between at least two parties,
• Knowledge: The defendant had knowledge of the contract,
• Inducement: The defendant intended to induce one of the parties to breach the existing contract,
• Not privileged: The defendant’s interference was not privileged or protected by law,
• Actual breach: A contract breach really took place, and
• Damages: The non-breaching party suffered measurable harm.

Process Of Suing a Former Employee For Defamation

Defamation law varies from state to state; therefore, the exact process for filing a defamation lawsuit against an employee depends on the jurisdiction. But generally, potential plaintiffs follow these steps when filing a defamation lawsuit:

• Ensure you have a valid claim of defamation;
• Decide where you can (and should) file a lawsuit;
• Collect and preserve evidence of the harm your business suffered;
• Comply with all pre-suit filing requirements; and
• Draft, file, and serve the complaint against the defendant.

When Can You Sue a Former Employee for Defamation?

If you plan to file a defamation lawsuit against a former employee, be sure to file it before the statute of limitations for defamation runs out. The statute of limitations is the time between when a defamatory statement occurs and when the plaintiff must file a lawsuit.

If your business files a claim after the statute of limitations has run, you risk having your case dismissed.

In most states, the statute of limitations for defamation claims is within one to three years from the time the defamatory statement was published.

How to File a Defamation Lawsuit Against an Employee or Ex-Employee

When filing a defamation lawsuit, the first step is to determine whether you have a valid claim for libel or slander. It is also important to prepare yourself for the potential defenses to defamation that the defendant could use, such as privilege or consent.

Once you and your attorney agree that filing a lawsuit is the right path for you, you should follow these steps:

1. Choose Where to File Your Claim of Defamation

Depending on the case, you may be able to choose from one of several jurisdictions in which to file your lawsuit. Available jurisdictions may include places where:

• Your business operates,
• Your customers are located,
• The defendant lives,
• The defamation was published, or
• Where your business has experienced loss due to the defamatory statement(s).

2. Comply With All Pre-Suit Requirements

Depending on the state where you file your claim, you may need to follow pre-filing requirements like giving public written notice of your suit and filing an official request for retraction.

3. Draft the Legal Complaint

The lawsuit is officially initiated with a formal legal document that is usually called a complaint. This document clearly states the plaintiff’s arguments, facts, and legal claims against the defendant—along with a request for damages (known as a “prayer for relief”).

4. Serve the Legal Complaint on the Defendant

Once the complaint is ready, the plaintiff files the complaint with the appropriate court, then “serves” (delivers) the complaint and summons to the defendant. This step is called service of process.

For further information on filing a defamation lawsuit, we recommend reading our comprehensive blog post ‘How to File a Defamation Lawsuit,’ or watching the video below.

Video: How to File a Defamation Lawsuit

Watch

How Long Does a Defamation Lawsuit Against an Employee Typically Take?

Every lawsuit is unique; therefore, there is no standard timeline for a defamation lawsuit. The time frame can be affected by everything from the case’s jurisdiction, to whether the defendant’s identity is known or they contest the case, to the length of settlement negotiations.

In our experience litigating hundreds of defamation cases at Minc Law, most defamation lawsuits take between one to three years from start to finish. Uncontested cases may be quicker to resolve, however, more complex and heavily contested matters can take several years to reach their final trial, settlement, or judgment.

For further reading, we recommend checking out our comprehensive resources ‘How long does it take to sue for defamation?’ and ‘How much does a defamation lawsuit cost?’

We Can Help Remove Fake Employee Reviews & File Suit Against Former Employees

If your business is the target of fake employee reviews or other malicious attacks on the internet, we can help. At Minc Law, we understand the devastating effects fake online posts and reviews can have on a business, its bottom line, and its ability to attract and retain talent. Internet defamation is at the heart of what we do.

We know what it takes to navigate employee review and consumer review platforms, identify anonymous reviewers, and pursue legal action when appropriate. Litigation can be a costly and time-consuming process, so we can help weigh the pros and cons and explore effective litigation alternatives.

★★★★★

“My experience with Minc Law was amazing. They were prompt and efficient in helping remove material I needed taken down. Dorrian, my attorney, kept me updated regularly and explained every thing she was going to do before she did it. I would recommend them over and over again, especially Dorrian!”

MK

June 8, 2021

To get started with your initial, no-obligation defamation consultation with an intake specialist to learn about your legal options, call us at (216) 373-7706, speak with a chat representative, or fill out our contact form.