W. David Paxton
While neither the Fourth Circuit nor Virginia courts have yet addressed the issue, the California Court of Appeals has held that current or former employees who post defamatory statements about a business on the Internet can be held legally accountable for such false statements. In Varian Medical Systems, Inc. v. Delfino, H024214 (Cal. Ct. App. 2003), two former employees posted numerous derogatory messages about Varian and two of its executives. A jury found the defendants liable for defamation, invasion of privacy, breach of contract and conspiracy, awarding $425,000 in general damages and $350,000 in punitive damages.
On appeal, the court considered whether the fact that defendants’ messages appeared on the Internet affected the character of the messages for purposes of defamation law. The defendants argued that “typical Internet hyperbole” could not be considered defamatory. The court rejected this challenge on three grounds: (1) the Internet would never achieve its potential as a viable source of information unless it is subject to the law, (2) the fact that readers might not believe the content of the postings did not change the fact that the statements damaged Varian’s business reputation, and (3) the postings at issue were not typical anonymous and outrageous postings, as alleged by the defendants.
The court also considered whether defamatory communications posted on the Internet should be considered slander, which requires proof of special damages, as opposed to libel, for which damages are presumed. The court noted that the messages were composed and published as written words, “just like newspapers, handbills, or notes tacked to a conventional bulletin board,” ultimately holding that defamatory statements posted on the Internet are properly characterized as libel. Consequently, it was not necessary for the plaintiffs to prove damages.
What Does this Mean for Employers?
Prior to this decision, it was unclear whether Internet speech would be held to a different standard under defamation law. Employers now clearly have the option to respond to false statements affecting a company’s reputation with a defamation suit. Employers must also carefully consider the practical realities of choosing to sue current or former employees. Among other things, determine whether you are able to identify who posted the defamatory postings and whether you are willing to spend the time and financial resources necessary to pursue litigation.
For more information about this topic, please contact W. David Paxton at (540) 983-9334 at Gentry Locke Rakes & Moore, LLP.
Copyright, Gentry Locke Rakes & Moore, March 2003
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