Small Business Defenses to Defamation Lawsuits

November 7, 2019

Defamation occurs when false statements are made against another that damages their reputation. When false statements are made in writing, it is libel, while slander occurs due to verbal false statements. Plaintiffs who bring defamation lawsuits must demonstrate that they suffered monetary losses as a result of the defamation. Therefore, to establish a cause of action in defamation, the plaintiff must demonstrate the following:

• The statement was communicated to another either in writing or verbally
• The statement was false
• The statement caused harm and injury to the plaintiff’s reputation
• The statement was not otherwise privileged

Defenses to an Accusation of Defamation

• Truth. For a statement to be deemed defamatory, the statement must be false. If the statement was true, then it does not constitute defamation. By proving truth of the matter, a defamation accusation can be successfully defended.
• Opinion. If the statement is an opinion, it cannot be defamatory, even when it is harmful. Editorials or critiques are examples of statements that may be harmful but do not constitute defamation.
• Consent. When a statement is made with consent, it cannot be defamatory. However, unless the consent was given in writing, it may be hard to prove that the statement was consented.
• Absolute Privilege. Political speech, advertisements, and spousal communications are privileged communications. Legislators are also protected for statements they make during legislative sessions.
• Qualified Privilege. This is a privilege for making statements under a legal, moral, or social duty. The person must show that the statement was made without malice, in good faith, and with belief that the statement was true.

Small Business Employers

Small business employers may fear a defamation lawsuit from former employees for providing references. Another example may be found in instances where employers make fair criticisms in review of the employee. However, what employers say about their former employees may be subject to a qualified privilege defense. If the employer can demonstrate that the statements were made without malice, in good faith, and believing it to be true, there may be no finding of defamation. Employers should obtain consent forms from employees about providing references and information regarding them on their behalf. These consent forms can later be used as a defense to a defamation lawsuit.

Trade Libel

Small business owners may be accused of or subject to trade libels. Negative comments by customers or competitors can be detrimental to small business owners. Trade libel occurs when defamatory statements are made about a business’ services or products. The same defenses outlined above apply in a trade libel suit.

If your business was subjected to defamatory statements or your business was accused of making such statements, contact our legal team at MacMain Leinhauser for expert advice on such litigation matters. Contact us online or call us at 484-318-7106 today for an initial consultation. Located in West Chester, Pennsylvania, we serve clients throughout Philadelphia.