Tuesday, January 22, 2013

Online Defamation not unique problem for local and small businesses

It often seems that the issue of online defamation is confined to small businesses or to local and regional businesses.  Usually large national companies service so many individuals that it is inevitable to receive some negative publicity.  Online commentary, some of it negative, is viewed as a cost of doing business.  Traditionally, it is smaller businesses or more localized businesses that need to guard against negative online commentary because, since these businesses service fewer customers, negative comments reflect a larger proportion of clients.  Most businesses are less concerned about negative comments in 1 out of every 10,000 than they are about negative comments in 1 out of every 100 customers.

 However, as we have repeatedly noted on this blog, the power of the Internet and the power of social media is changing the traditional view.  Negative online comments are no longer simply an issue of numbers.  A single powerful negative review can be more damaging to a company than 1,000 less powerful comments.  The size of the company and its customer base is no longer a relevant consideration.  An article, printed on January 22, 2013 in the Washington Post, reports on “a challenge companies face with the growth of social media sites like Facebook, YouTube and Twitter. Before, someone in a far flung local in Australia would not be able to cause such a stir. But the power of social media means that negative posts about a company can spread from around the world in seconds.

The power of social media will only increase over the next few years.  Controlling online reputation has already become a vital matter of survival for businesses, regardless of size.  While it is impossible to put the proverbial “genie back in the bottle” and return to the pre-Internet days, businesses can take steps to ensure that they maintain a positive online presence which can bolster profitability and improve the quality of the business.

Since 1980, Gross & Romanick, P.C. has been representing businesses of all sizes and has been positioned at the intersections of law, business and technology.  We have been advising businesses on how best to protect themselves against abuses of technology and ensuring that their legal structure affords them the flexibility necessary to thrive as needs and demands change.  If you have business issue, please contact our office at (703) 273-1400 or email our managing partner, Edward Gross at law@gross.com.

Thursday, January 17, 2013

Protecting Businesses from Online Defamation

One of the biggest public relations problems for businesses today is managing their integrity by fending off online defamation.  With the expansion of the Internet and the availability of a host of online reviewing services, blogs and websites devoted to various businesses, there has been a rapid increase in the consumers’ ability to post comments and reviews online.  The vast majority of these reviews are innocuous, sometimes flattering and usually an accurate description of the work or service performed.  However, with increasing frequency, some reviews are crossing the line into mean-spirited attacks.  While some of these reviews may possess a grain of truth, the overall impression from the review is extremely negative and intended to harm the targeted business.  Business that are the subjected to vitriolic reviews are required to go to great lengths to have the review removed from the Internet; and often, cannot succeed in their removal.

One of the first cases in the nation concerning business defamation is currently winding its way through the Virginia courts.  In the matter of Dietz Development, LLC v. Perez ( presently pending in the Fairfax County Circuit Court), the Virginia Supreme Court recently reversed the trial court’s grant of an injunction requiring Ms. Perez to remove a Yelp and Angie’s List posting that criticized Dietz Development’s work and claimed that workers stole items from her home.  This particular case began when Dietz Development sued Ms. Perez claiming that her posts were false and defamatory.  Assuming that Ms. Perez’s posts are false (truth is an absolute defense to defamation in Virginia), Dietz Development has been placed in an untenable position by the Virginia Supreme Court’s ruling.  The Virginia Supreme Court held, in part, that Dietz Development cannot obtain an injunction because there is an adequate remedy at law; specifically, Dietz Development can sue Ms. Perez for the damages caused by her false postings.  Of course, this ruling effectively eliminates any remedy that Dietz Development (and other similarly situated businesses) would have against online defamers.  These individuals making these online comments are likely to lack the financial resources to pay a significant defamation judgment and are likely to file bankruptcy in order to avoid paying the judgment.  Moreover, the post itself is what is causing the damage and will continue to do so even after the judgment has been entered.  These posts are the worst form of negative advertising as they will exist in perpetuity and cannot be forcibly removed through an injunction in Virginia.

One unique idea about how to handle these types of situations, from a legal perspective, is to convert the tort action of defamation into a breach of contract action.  Because internet speech is protected by 1st Amendment, it is important to convert the claim to a matter of contractual rights, and out of free speech issues.  Moreover, there needs to be an enforcement mechanism outside of the judicial process that allows a business to compel removal of the defamatory post. 

At Gross & Romanick, we have developed the outlines of a solution to this problem to protect our business clients from false statements made by disgruntled customers or former employees.  Our solution focuses on converting the issue from one of tort law (defamation) to one of contract law.  We also seek to remove the courts, as a state agency, from resolving the dispute and attempt to limit the courts to simply enforcing extra-judicial process.  However, our strategy can only be effective if prepared in advance of the posting.  It is therefore imperative that any business concerned about online defamation assume that every potential customer has the potential to post a defamatory comment and act accordingly.  Specifically, you should contact an attorney familiar with the issues and take appropriate steps to protect your company.

The attorneys at Gross & Romanick, P.C. are well versed in the issues of online defamation.  We have extensive experience handling defamation issues.  One of our attorneys holds an advanced degree in computer science and has been featured on Fox5 News as an expert in the field.  We have an aggressive and innovative approach to issues that allows us to find solutions where none had previously existed.  If you have concerns regarding online defamation, please contact our office at (703) 273-1400.


Social Media and Employment Termination in Virginia

One question that is being increasingly asked by our firm’s business clients is: Can I terminate an employee due to comments posted by the employee on Facebook or Twitter?


While the instinctive answer is “yes” since Virginia is an at-will employment state, the actual answer can be much more complicated.  Each case is different, and the answer to the question depends on the type of employer/employee, as well as the actual content posted by the employee.  Some speech may be protected under the 1st Amendment to the U.S. Constitution (i.e. speech about matters of public concern by public employees), and some speech may be protected as “concerted activity” under the National Labor Relations Act (NLRA).  It is beyond the scope of this article to identify exactly when and how social media postings may be protected.  Therefore, before firing an employee on account of a social media posting, the employer should consult with an attorney to determine if the speech is protected under federal or state law. 


There is no case law in Virginia which is directly instructive on the issue of whether an employee can be terminated for social media postings.  The U.S. District Court for the Eastern District of Virginia recently stopped short of answering the question as it pertains to public employees. In Bland, et al. v. Roberts, 2012 U.S. Dist. LEXIS 57530, several deputy sheriffs filed suit alleging that they were improperly let go for having “Liked” the sheriff’s opponent on Facebook in a recent election.  They argued that the Facebook posts concerned matters of public concern and, therefore, were protected speech under the First Amendment.  The court ruled that “Liking” a post on Facebook is insufficient speech to merit First Amendment protection, and therefore did not address the more important question of whether written Facebook posts can be protected free speech.  The case has been appealed to the U.S. Court of Appeals for the 4th Circuit.

 There is a body of administrative law rulings by the National Labor Relations Board (NLRB) in which the NLRB has determined that employees were terminated in violation of the National Labor Relations Act (NLRA) for derogatory posts made on Facebook about their employer.  In Hispanics United of Buffalo, 359 NLRB No. 37 (Dec. 14, 2012), the NLRB affirmed the ruling of an administrative law judge that the termination of five employees, due to posts made on Facebook, was in violation of the NLRA.  The ruling can be accessed from the NLRB website here: http://www.nlrb.gov/cases-decisions/board-decisions. 

 The NLRA provides that it is an unfair labor practice to restrain employees from engaging in “concerted activities” for the purpose of collective bargaining or mutual aid or protection. In this case, one employee placed a post on Facebook regarding a fellow employee, and four other employees commented on the post.  These employees were subsequently terminated on the basis that posts constituted bullying and harassment of the employee-subject, and violated the employer’s policy on harassment.  The terminated employees initiated an action pursuant to the NLRA, contending that the posts on Facebook amounted to protected “concerted activity” under the NLRA.  An Administrative Law Judge agreed, stating that employees have a protected right to discuss matters affecting employment amongst themselves, and the NLRB affirmed the Judge’s ruling. The employer was ordered to reinstate the employees and pay back-wages.

 Accordingly, if you intend to terminate an employee on account of social media postings, you should first consult with an attorney to determine if the speech is protected.  In every case, the content of the posting and the nature of the employment should be assessed to determine the employer’s legal rights. 

 As added protection, the employer should consider adopting a social media policy for its employees, with the intended effect of discouraging controversial postings.  This policy should be written in consultation with an attorney, as the NLRB has struck down several social media policies that are not overreaching in nature. In addition, the employer may want to consider including social media restrictions in its employment agreements.

 If you need legal help with employment matters relating to social media, Gross & Romanick can assist you.  Send us an e-mail to law@gross.com or contact us at 703-273-1400.