Legal Insight. Business Instinct.

Business Defamation: Keep it to yourself

Sometimes I catch my 12 year-old daughter intensely muttering things to herself. This typically occurs after my wife or I have committed some perceived wrong, thereby wrecking her pre-teen life. When asked what she is saying she always says, “nothing.” My daughter wisely knows that the things she is saying to herself will get her in trouble if spoken to her loving parents.

Things we say out loud can get us all in trouble. Defamation is what is known in the legal world as a tort. In order to prove defamation a plaintiff must show that (1) information was communicated concerning the plaintiff to others; (2) the information was defamatory or untrue; and (3) that the plaintiff was damaged because of the communication. Defamation done in writing is called libel and spoken defamation is called slander.

For example, let’s say Rich Rancher cuts Fred Farmer off in traffic. Upset at Rich, Fred Farmer tells Craig Coffee that Rich Rancher uses illegal performance enhancing drugs to beef up his beef. As a result Rich Rancher loses his cattle contract with a major grocery chain. Rich Rancher can sue Fred Farmer for defamation.

This example also constitutes what could be considered defamation per se. Defamation per se removes the element of having to show specific harm or damages. Defamation per se exists if someone spreads false information that a person or business has engaged in: 1) criminal conduct; 2) immoral acts (such as adultery), or 3) dishonest activity as a business person.

Fred Farmer has implicated Rich Rancher in a criminal offense (illegal performance enhancing drugs) and improper business dealings (using the drugs to beef up beef). Rich Rancher just needs to prove that Fred Farmer made the statement to Craig Coffee and that the statement is not true and he can be awarded significant damages for defamation regardless of whether he can show actual damages. Fred Farmer may have a valid defense that his statement was true, but he will be required to prove that Rich Rancher was using illegal performance enhancing drugs to beef up his beef. The process of proving the truth of the statement can be a lengthy and expensive ordeal.

Often times, those involved in business disputes want to proclaim to others about the actions of a partner in business. To do so runs a high risk due to the fact that these types of statements often either implicate the partner in a crime or attribute the partner with improper business dealings. For example, saying, “my partner is a thief,” if false, is defamation per se. Proving the falsity or truthfulness of such a statement can be a costly legal battle. By saying those words to others, a business person involved in a dispute is giving leverage to the other side and could end up getting less out of the dispute as a result.

The best advice is to follow the example of my 12-year-old and keep it to yourself. The appearance of schizophrenia notwithstanding, sometimes talking to yourself beats speaking your mind.

Skip to content