November 2, 2016

Your company’s website and the law of defamation

Posted in Corporate Litigation by Gene Killian |

Every once in awhile, I get a newsletter or email from a marketing guru telling me to Google myself, to make sure there aren’t any nasty comments floating around in cyberspace about me or my firm.  Part of the reason:  There are obviously lots of places (Avvo, Yelp, etc.) where people can really vent their spleen on you if they’re unhappy. There are even websites (like The Robing Room) where lawyers sometimes trash judges.

Along these lines, is a website created by a gentleman named Asher Adelman for people to rate their employers and bosses, to enable job seekers to get an honest sense of what it would be like to work at a particular company. In 2010, reported on an employee lawsuit against a company called Petro-Lubricant Testing Laboratories, Inc. and its owner, John Wintermute, claiming gender discrimination and a hostile work environment. Specifically, on August 3, 2010, posted an article captioned “Bizarre and Hostile Work Environment Leads to Lawsuit.”  This was followed up with a December 2010 post about “America’s Worst Bosses,” which honored Wintermute as one of its award winners.

Let’s just say the August 2010 article wasn’t exactly flattering to Wintermute, stating in part as follows: “[The employee] claims that John Wintermute is a violent bully, a racist, and a womanizer who regularly brought guns to the workplace and target practiced, hunted and gutted birds, which he then fed to his guard dogs, on company property. He also allegedly forced workers to listen to and read white supremacist materials, drank alcohol regularly throughout the workday, and was a violent, raging drunk.”  (Now, before we go any further here, let me say that I have no idea whether any of these allegations are true or false.  Wintermute disputes them, vigorously.)

After Wintermute learned about the postings, his lawyers sent a “nastygram” in December 2011 to Adelman, threatening legal action unless the material were to be taken down immediately. Shortly after receiving the nastygram, Adelman changed the post (slightly), to read: “[The employee] claims that John Wintermute is a ‘dangerous and violent alcoholic’ who allegedly regularly brought guns to the workplace and target practiced, hunted and gutted birds, which he then fed to his dogs, on company property. John Wintermute also allegedly regularly subjected his employees to ‘anti-religion, anti-minority, anti-Jewish, anti-Catholic, anti-gay rants.’”

The new and improved version understandably didn’t mollify Wintermute, so he filed suit in June 2012.  But here’s the problem.  New Jersey has a one-year statute of limitations for a defamation action. The trial court found that claims based on the August 2010 article and the December 2010 publication of the “worst bosses list” were therefore time-barred.  Later, the trial court determined that the December 2011 article represented a fair and accurate account of the plaintiff’s complaint, and therefore could not constitute defamation.

Wintermute appealed, arguing in part that the December 2011 re-posting was “a separate and distinct publication from the August 2010 post,” and that the complaint had been timely filed within the one-year statute of limitations.

But the Appellate Division disagreed, essentially holding that all of the allegedly offending posts were part of one “publication,” which commenced with the August 2010 article. The panel wrote: “Both posts are constructed similarly, each containing six paragraphs.…The title was changed between posts but the subject matter remained the same; both articles report on a hostile work environment lawsuit…The only substantive difference in the actual text of these articles is the elimination of the reference to Winterthur requiring his employees to listen to and read white supremacist materials; the later post instead quotes the employee’s allegations that Winterthur subjected his employees to ‘anti-religion, anti-minority, anti-Jewish, anti-Catholic and anti-gay rants.’”

The Court then discussed the specific problems posed by Internet publications, writing: “Communications posted on websites are viewed on a far wider scale than the traditional mass media. Web postings are available for an indefinite period of time. If the material changes to an Internet post were to result in a re-triggering of the statute of limitations on each occasion, the legislative purpose of favoring a short statute of limitations for defamation would be defeated. Therefore, the statute of limitations will only be triggered if a modification to an Internet post materially and substantially alters the content and substance of the article.” The Court noted that “the modifications in the second posting were intended by defendant to diminish the defamatory sting of the previously reported allegations after his receipt of plaintiff’s counsel’s antagonistic correspondence. We find it a logical extension of our decision…to also conclude that a softening of prior material and the subsequent posting should not result in the commencement of a new statute of limitations.”

There are few practical takeaways from this case.

First, the marketing gurus are correct. It IS a good idea to Google your name, and your company’s name, from time to time, to monitor for problematic posts. You might find a disgruntled customer or client, for example, and be in a position to make things right. 

Second, litigation sometimes creates more problems than it solves. Suppose that, instead of sending threatening letters and filing suit against Adelman, Wintermute had asked Adelman whether would accept a brief post setting forth his side of the story? And suppose that post had said: “We’re not sure where these allegations are coming from, but suffice it to say we intend to contest them vigorously in Court.  We strive to make the company a positive experience for all of our employees.”  Hindsight is 20/20, but by filing the defamation suit, not only did Wintermute start a second legal battle (seldom a good idea and always expensive), but he also created more adverse publicity – including (as of this writing) the posting of his video deposition on YouTube.  See here.   

Third, although insurance is more properly a topic for our insurance coverage blog, it would be a good idea to have your risk manager or broker review your insurance program, including Coverage B of your commercial general liability policy (“personal injury and advertising injury”), to make sure that you have adequate insurance for claims of disparagement.