Defamation: What It Can Mean to Your Business

When a tenant who moved posted a tweet on Twitter that there was mold in the building, the landlord brought an action against her for defamation. This may be a first because the mode of defamation was Twitter. But defamation may be more commonplace than you might think.

An employer leaves your company and starts to badmouth you to your vendors, customers, and other business associates. A customer spreads an unfounded rumor about some transaction with you. These communications may be defamatory to your business reputation.

It's critical to know your rights so you can protect yourself.

Understand what types of communication can be considered to be defamation—and which are not. Unhappy truths may be one thing, but falsehoods that harm your business are something else. A defamatory statement is one of fact, not opinion (there’s still a right to free speech). A customer in your restaurant could post an online review saying “I didn’t like the food” (an opinion), but she can’t claim that there was a fly in the food when there wasn’t (a false statement of fact). When a material false statement is made about your company—orally or in writing (including on Twitter and other online venues)—and it harms your reputation, you have suffered defamation.

Action to take: Find the source of the problem. It may be easily resolved (for example, asking the person who defamed you to take down posts on Facebook). You may need to deploy damage control to prevent word from spreading and damage from mushrooming. It may become necessary to bring in a public relations expert to help you create good buzz that will counter the bad will created by the defamation.

Talk with an attorney. You may want to seek legal action to stop continued harm. Keep in mind that if you do bring a claim, any recovery you receive ultimately costs you time and money (the recovery will be reduced by the amount of legal fees you owe your attorney). It may come down to a business decision about how much time you want to devote to pursuing legal action versus spending the time running your business.

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