Business disparagement is a form of defamation, but directed at a business. In general terms, business disparagement, as defamation, is stating something false — provably false — about a business that causes injury or damage to the business. Importantly, expressed opinions are NOT defamation. Business disparagement can come in two forms — oral and written. The first goes under the legal term of “slander” and written defamation is legally called “libel.”
Defamation law is nuanced and varied around the country and generally depends on state law. For example, in Michigan, a business suing to prove slander or libel must provide evidence and prove five legal elements. These are:
- A false statement about the business
- The false statement was published to third parties — there are exceptions such as when the communication is privileged
- The false statement was made with at least negligence as to the truth of the statement
- The business suffered damage or injury
- The damage/injury was caused by the false statement
When dealing with “public figures,” the knowing or intent element has a higher standard. With “public figures,” it must be shown that the statement was made with “malice.” Ill will, spite or even hatred is not enough to show actual malice. Rather, actual malice is shown when it is proven that the statement was made with knowledge that the statement was false or made with reckless disregard for whether the statement was false. There is a high standard when attempting to prove malice. The customary standard is “preponderance of the evidence,” but malice must be proved with “clear and convincing “evidence.”
What Can My Business Do?
What a business can do to combat business disparagement depends on the situation. If your business has been disparaged, the first step is to seek legal advice and counsel from experienced defamation attorneys and litigators. Obviously, litigation is an option and, sometimes, it is the only viable option particularly if the disparagement is coming from a competitor in the marketplace. In such a circumstance, presumably, the competitor can be located and has sufficient assets to pay a money judgment if awarded. Of course, success will depend on the nature of the statement made and proving the other necessary elements.
If the disparagement is coming from current or former employees, litigation may also be a good option since injunctive relief might be possible in addition to money damages. This type of lawsuit depends on what sort of employment contracts and agreements have been signed. Non-disparagement clauses are common in employment settings.
On the other hand, if the business disparagement is from someone posting a false and defamatory review of your business on the internet, litigation may not be the best option. The defaming reviewer may be difficult to identify and locate, may reside in a jurisdiction far away and may not have sufficient assets to pay a money judgment. Litigation is expensive. But there may be other options.