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Be Careful What You Say About That Company

Authored by attorney Sean M. Golden

In Virginia, one who defames another can be sued for money damages.  Defamatory words can be either written (libel) or spoken (slander).  To be liable for defamation, the words used must not only be false, but must actually be defamatory, meaning that they tend to harm the reputation of another so as to “lower him in the estimation of the community or to deter third persons from associating or dealing with him.”  Words that prejudice a person in his or her profession or trade are considered a special class of defamation called “defamation per se.”  When a person proves defamation per se, he or she is not required to prove that the words have caused damage; that damage is presumed by the court.

Generally, people familiar with the concepts of libel or slander think of those concepts in terms of words used against a specific person.  What many people do not realize is that corporations can be defamed, too.  A corporation may be defamed per se by statements that “cause aspersion on its honesty, credit, efficiency or its prestige or standing in its field of business.”   At least one judge in Virginia refused to dismiss a claim for defamation where a corporation alleged that the defendant had wrongfully claimed that the corporation “was going out of business.”

“But aren’t corporations criticized publicly every day?” you may ask.   Simply criticizing a corporation is not enough to warrant a case for defamation.  The statement made must be false, and the person making the statement must have made it knowing it to be false, or without any reasonable grounds for believing the statement to be true.  In addition, voiced (or written) opinions cannot form the basis of a defamation claim.

To be sure, defamation claims against corporations are rare.  Even the above mentioned claim stating that a corporation “was going out of business” was eventually dismissed because the judge found there was no evidence to support that those alleged statements were actually made.  But the lesson to be learned from these cases remains: be careful when spreading harmful news about other companies, because if you’re not careful, you could be the subject of a defamation lawsuit.

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