Protecting your reputation from online defamation

 In Social Media


The instantaneous nature of the digital age adds another dimension to the risks that an employer can face when they terminate the employment of one of their employees. Regardless of how sensitively an employer handles a dismissal, a situation may arise where social media becomes a vehicle for making disparaging remarks about the employer.

What can an employer do when the employee’s employment has already terminated? What rights does an employer have against a former employee and/or their family members who are making disparaging remarks about the employer?

Assessing the risk
If an employer has concerns that a particular employee may engage in this type of behaviour post-employment, the employer may negotiate a Deed of Settlement with the employee which importantly contains a non disparagement clause. There would be a clause which provides that the employee accept money for not ‘bad mouthing’ the employer. The payment may be staggered over a period of time.

If the dismissed employee entered into a Deed of Settlement, and breached the clause requiring the employee not to disparage their former employer, then that behaviour would most likely constitute a breach of the Deed. There may be legal recourse available to the employer. This may include the right to commence proceedings to obtain a refund for any settlement monies provided to the employee or other damages that the employer suffers as a result of the employee breaching the Deed, for example, the loss of a client contract.

Breach of employment contract
An employer may have legal recourse under an employment contract, particularly if the employment contract contained terms about confidentiality and/or a restraint of trade clause, and those clauses are noted within the contract to survive the termination of employment. If the social media post by the employee makes public confidential information, this may constitute breach of the employment contract. Further, if the post involves contact with potential clients to attempt to induce the client to remove their work from the employer (such as making derogatory comments about the employer in an attempt to induce), then it may also constitute breach of contract.

If there is a threat that such posts could cause immediate and serious financial damage to the employer, and the former employee is not willing to remove them, it may be possible to ask the Supreme Court to order that the former employee remove the post by taking action to obtain an injunction.

Social media posts made by the dismissed employee’s friends and family will generally not fall within the gamut of employment contracts and/or Deeds of Settlement.

Defamation proceedings
Social media posts and/or text messages published by a former employee and/or their family and friends may constitute defamation. In general terms for a statement to be considered to be defamatory, it must be a false statement that is made about one person to another person that has the effect of damaging the reputation of the first person.

To successfully commence Court proceedings for a defamation claim, the following elements must be proven by the employer (the plaintiff):

  • The defendant published the communication (in writing or orally);
  • The communication has been published to a third person (not just to the employer);
  • The communication identifies or is about the employer; and
  • The communication can be classed as defamatory.

It is noted that the Defamation Act 2005 (NSW) prevents a corporation that employs ten (10) or more people and is not a registered not-for-profit-organisation, from commencing defamation actions.

In this instance only employees who are sole traders or who are corporations that employ nine or less people and who are not related to another corporation could commence this action.

The corporation must prove that it suffered financial loss as a direct result of the defamatory communication. Any damages awarded by the Court to a corporation will provide compensation for actual financial loss suffered.

The legal rights available to employers who are subject to former disgruntled employees and/or their families publishing inappropriate and/or slanderous materials about the employer, can sometimes be difficult and/or costly to enforce.

Proper policies and procedures around social media while the employee is still employed will assist in some situations. More often than not, the easiest and quickest way to deal with a disparaging social media post is to persuade the owner of the media platform and/or the ISP provider to remove defamatory remarks by sending a formal notice, coupled with a targeted “cease and desist” letter to the former employee, containing a threat of proceedings and demanding an apology.

When contemplating the termination of an underperforming employee, it is prudent to first obtain legal advice prior to initiating the dismissal process. Your legal advisor can provide you with advice that can:

  1. Identify the likely risks;
  2. Mitigate the risk from occurring;
  3. Limit the quantum of likely damage of the risk if it does occur;
  4. Assist to implement an exit strategy, including appropriate documentation, to both mitigate the risk and to also maximise the employer’s rights of recourse in the event that the risk(s) occurs.

It is worthwhile to note that most employees that engage in this type of conduct are those that are ‘blindsided’ by the termination. If the employer has a culture of providing regular feedback to employees who aren’t performing well, and outline the steps that the company can take if an employee continues to underperform, then the employee should not be surprised if they are terminated. How the termination is effected will also matter. The employer should show respect in the termination process, help employees understand why decisions were made and show empathy. i.e. ‘fire friendly’.

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