• Internet Postings By Former Employees Lead To Libel Liability
  • February 11, 2004
  • Law Firm: Graydon Head & Ritchey LLP - Cincinnati Office
  • Former employees who post derogatory comments about their former employer can't hide behind internet anonymity to avoid liability for libel. A California appellate court recently upheld a trial court's $775,000 award in favor of an employer against two former employees.

    Former employee Delfino was fired amidst allegations that he had harassed a co-worker. Delfino's girlfriend, Day, quit several months later. Following their departure, Delfino and Day posted over 13,000 messages on 100 internet bulletin boards, including Yahoo financial boards. The messages accused company managers of being homophobic, discriminating against pregnant women, having sexual affairs and secretly videotaping employees in the office restrooms.

    The trial court awarded $425,000 in general damages and $350,000 in punitive damages. The trial court also issued an injunction prohibiting further posting.

    The employees attempted to persuade the appellate court to reverse the trial court ruling by arguing that internet message boards are so loaded with outrageous anonymous postings, that any reasonable person would not accept the postings as true. The appellate court was unmoved. It noted that people go to financial bulletin boards to obtain information to evaluate particular companies. The court said that even if the exchange is irreverent and freewheeling, "we do not agree that it is exempt from established legal and social norms."

    The court of appeals also rejected the argument that the statements alleging sexual impropriety, incompetence or lying fall into the category of "hyperbole" and therefore, are not actionable. The appellate court noted, though, that the test of hyperbole was a case by case analysis, that depended on the unique circumstances of each case.

    Although it let the damage award stand, the appellate court vacated the injunction which prohibited Delfino and Day from making defamatory statements about company executives and posting them on internet bulletin boards. The appellate court found that prohibition so broad (it prohibited the speech anytime and anywhere) that it constituted a "prior restraint on speech." The court found that the injunction violated the First Amendment. But even though it vacated the injunction, the appellate court noted that the size of the damage award itself would make it "hard to imagine that... defendants will choose to continue [their conduct]."