Special thanks to Dylan Clark for researching and co-authoring this article! Dylan is a rising senior at Michigan State University and will be graduating in 2020. He is studying for the LSATs and plans to attend law school next fall. His interests include corporate and business law.
With the overwhelming degree to which the Internet surrounds our everyday lives, it is important as a business owner to know what can and cannot be said (i.e. posted) regarding your business online. In other words, can I sue to get that negative review off of Yelp? Or what about that irate ex-employee that keeps posting false information to my Facebook page?
Michigan’s laws are fairly clear about what constitutes defamation and what does not. But can you rely on defamation law to protect your business from online harassment? There are four elements to a defamation claim in Michigan:
- A false and defamatory statement concerning the plaintiff;
- An unprivileged publication to a third party;
- Fault amounting at least to negligence on the part of the publisher; and
- Either special per se harm or actual damages proximately caused by the statement .
Most important in a business defamation case is that the business must be able to allege and prove a causal connection between allegedly defamatory statements and the actual economic damages incurred as a result within a year of the alleged defamation occurring. In other words, a business must show that there is actual, definitive harm to the business linked to the online statements
In a recent case in the Genesee County Circuit Court, two trucking companies, Penguin Trucking Inc. and E.L. Hollingsworth & Co., battled out a defamation case. The two companies were contracted for the same job at different rates by an outside third party. However, by the time the companies found out about the scam, Penguin Trucking had already had the freight in its possession and was unable to make a deal with E.L. Hollingsworth for them to reconcile and both deliver the freight.
Since Penguin Trucking already held the freight, they decided to enter into a deal directly with the end customer, and shortly after that an E.L Hollingsworth employee posted a scathing report on Carrier411.com, a trucking monitoring service website. The employee wrote that Penguin Trucking “held [the] load hostage,” attempted “in-transit agreement modification,” and accused them of “unethical or deceptive business practices.” In any industry, potential customers are reluctant to do business with companies that have negative reports written about them, like those written on Carrier411.com. Penguin Trucking experienced these adverse effects first-hand when it lost out on a contract with a shipper solely based on the post. Critically, Penguin Trucking proved not only that the online statements were untrue, but that the loss of contract was directly linked to the Carrier411.com review. Penguin Trucking was awarded $612,400 in damages for this lawsuit.
If someone is posting egregiously false information about your company on the Internet, you have a right to defend your company. There may be various options short of litigation – such as contacting the social media host, sending a cease and desist letter – but if you are considering a defamation claim to protect your company’s reputation, contact a reputable attorney for a consultation.
Dan Artaev is an experienced business litigator who can advise your business and help you decide whether a lawsuit is appropriate. Contact Dan at firstname.lastname@example.org or 248-380-0000.