Defamation And Your Business: What To Know And How To Protect Yourself
These days, your business reputation is just about the most valuable asset you can have. Damage to your company's reputation in the form of libel, slander, or defamation can have a serious financial impact on your company's bottom line. Depending on the nature of your business, your location, and the age of your business, that kind of reputational damage can even be fatal to your enterprise.
However, business owners do have legal rights when false statements are made by former employees, competitors, disgruntled customers, or other people. Here's what every business owner should know about defamation and how to protect against it.
What's the difference between slander, libel, and defamation?
Libel is a written statement that's untrue but presented as a fact. It might be something written in a letter to the editor of the local paper, passed out on a flyer, pinned to a community bulletin board, published in a news article, or written on an internet review site or blog post.
Slander is a defamatory statement that's spoken. It could be a purposefully untrue rumor that is being spread, for example, by an ex-business partner. In this day and age, it could also be a rant posted in a Youtube video or podcast -- or even something said on the radio.
Defamation is a false statement that's made to sound like a fact and is harmful to your business or reputation. It encompasses both libel and slander.
When can you sue for defamation to your business?
Generally speaking, in order to sue someone for defamation to your good name, three things need to be true:
- The harmful statement (whether published or spoken) must be untrue.
- The statement must be made to a third party or in the presence of others -- not just to you alone.
- The harmful statement must actually cause damage to your business.
For example, if you operate a wedding photography business, imagine that you're approached by a bride after the ceremony is over. She suddenly wishes to renegotiate your prices because her wedding went over budget. You gently point out that she agreed to your price prior to the wedding, that you already took all the photos, and that the editing is done.
In a fit of anger, the bride goes on your Facebook page and every online review site she can find and gives you terrible reviews, claiming that you showed up drunk to the wedding, only took half the requested photos, and are now holding what photos you do have "hostage" for an exorbitant fee. Suddenly, you have several bookings for weddings cancel, and your business declines by more than half. This kind of example would qualify you to sue for defamation.
What can you do to protect yourself against defamation?
Your best defense against defamation is a good offense. Every business transaction you make should come with a contract that spells out expectations for both parties. Then you should document everything you do to fulfill the terms of that contract -- and what happens on the other party's end of things. This is true whether you are interacting with a client, a supplier, or an employee. Ultimately, that can help you with a lawsuit if you need to fight back.
For more information on business transaction law services, talk to an experienced attorney today.
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