Protecting Your Business From Defamation

A business’s reputation is one of its most valuable assets. Any marketing professional can attest that a good reputation can do more to drive customers to a particular business or product than almost anything else. For this reason, damage to a business’s reputation can cause substantial revenue losses and even jeopardize a company’s ability to remain a going concern. Luckily, businesses have legal rights against damaging false statements made about them by competitors, former employees, or disgruntled customers. These lawsuits are complex and business owners must have an idea of what a business defamation suit entails before initiating litigation.

Defamation law is largely a matter of state law—though the federal Lanham Act does provide some protection against false statements. Generally, for a business to be able to file a libel suit, it must be able to establish three elements of a business defamation claim. First, the statement must be untrue. Second, it must have been published (i.e. shared) to a third party, such as through an online review website or in a news article. Finally, the statement must have lowered the esteem of the business in the eyes of the community.

Thus, a customer that posts a negative but factual review of a business has not defamed the business. Truth is always an absolute defense against a defamation claim. Only false statements can be defamatory. As such, a business owner considering filing a libel claim should determine whether the business will be able to objectively prove that the harmful statement is false. For example, if a former employee claims that a company’s product contains harmful ingredients not listed on the label, the business could prove this false by showing test results from a third party laboratory.

Even if the statement is not true in every single aspect, it will still be protected from liability if it is substantially true. Under the “substantial truth” doctrine, a statement is considered true (and thus protected from liability for defamation) if the “gist” or “sting” of the statement is true even if the statement is not completely accurate. If the “gist” of the statement is true, the court will disregard small errors in detail.

Establishing that a defamatory statement was published to third parties is often the easiest element for a business to prove. Evidence of publication could come from the website where the statements were posted. It could also come from the testimony of individuals who heard the defendant make the defamatory statements.

Often the hardest element to prove is that the statement resulted in damages to a business’s reputation. Frequently, proof of reputational injury comes from showing a loss of customers or a reduction in revenue and in states allowing presumed damages for libel per se claim reputational damage can be proven with less precision. Evidence of lost customers or sales will generally be sufficient to prove that the defamatory statement injured the business. Some states allow a business to seek an award of punitive damages against the defendant in addition to actual damages.

Performing this pre-suit investigation can seem daunting or time consuming. This is where it pays to retain the services of an experience libel and slander attorney. Business defamation cases can be extremely complex. Despite this, the statute of limitations in most states provides a relatively short window for filing suit. In Illinois, the statute of limitations for defamation is one year.

Defamation law is highly nuanced and always evolving. The success of a plaintiff’s defamation claim can often depend on how the case is presented. Having your case handled by a knowledgeable and skilled defamation attorney is highly recommended.

Our top-rated by Super Lawyers Naperville and Evanston libel attorneys defend individuals’ First Amendment and free speech rights to post on Facebook, Yelp and other website’s information that criticizes businesses and addresses matters of public concern. Here is an arbitration decision where we successfully defended our client by presenting evidence that our client’s 20+ YouTube videos containing negative opinions about a used car dealer were substantially true and protected opinion under the First Amendment. We recently required a defendant who publicized an allegedly false lawsuit regarding our client to provide an apology and full retraction as part of a confidential financial settlement following our filing of a $16 million suit for libel per se in federal district court.

Our DuPage defamation attorneys near Wheaton also represent and prosecute claims on behalf of businesses throughout the Chicago area including in Western Springs and Clarendon Hills who have been unfairly and falsely criticized by consumers and competitors in defamatory publications in the online and offline media. We have successfully represented businesses who have been the victim of competitors setting up false rating websites in order to publish defamatory content about our business clients. Beyond slander and libel law, our Chicago business, commercial, class-action, and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. We serve clients throughout Illinois and the Chicagoland area. You can contact us online here or call us on our toll-free number at 630-333-0333.