Many businesses’ best advertisement comes from satisfied customers willing to share their experience by writing glowing five-star reviews. Unfortunately, not every customer is going to be satisfied or write a positive review. In fact, the majority of businesses will receive several negative reviews. While accountability is a good thing and the possibility of negative reviews is motivation for businesses to treat their customers well, there are instances where individuals or other competing companies take advantage of the system by writing negative reviews that have no factual basis. Since so many small businesses depend on referrals and positive reviews to generate new customers, these negative reviews can be devastating to their growth or even their survival.
I’ve received multiple phone calls from business owners concerned about negative reviews and comments people have posted online about their business – some from disgruntled former employees and even some from competitors posing as customers. The question is always, what is required to take legal action against those posting negative false reviews about my business? In order to have a claim for defamation, the following four elements must be met:
1) The statement shared must be false.
Truth is always a defense to a claim for defamation. No matter how much someone’s statement affects your business, if the statement is true, you would not have a claim for defamation except for a few very limited and narrowly applied exceptions. North Carolina courts realize that the truth can sometimes be twisted. In order to protect that from happening, our courts recognize what is called Class 2 Libel and Libel Per Quod. Class 2 Libel occurs when a posted statement is susceptible of two meanings – one being defamatory. Libel Per Quod takes place when a statement on its face is not defamatory, but mixed with explanatory circumstances, there is an inference of defamation. Therefore, even if a statement is truthful on its face, it can still be found to be defamatory.
2) The statement cannot be mere opinion.
Sometimes the line between defamation and mere opinion is difficult to draw. For example, what if a customer posts, “This business has the worst customer service I have ever experienced; I will never come back”? Clearly, this is mere opinion and would be considered protected speech. But what if a homeowner posts a review about a landscape company that reads, “This business did not keep its word and left the job site a mess”? This is a much closer call based on how the terms are defined. Although there is no black and white rule of what constitutes mere opinion, the United States Supreme Court has emphasized that in order to have a claim for defamation, the statement made must state or imply a defamatory fact. Milkovich v. Lorain Journal Co., 497 U.S. 1, 18 (1990).
3) The statement must be communicated to one or more persons.
This element is almost always met as online reviews or comments are meant for others to read. Basically, the statement must be seen or intended to be seen by someone other than you or your business.
4) The business must have suffered some harm.
The final element can be met by showing that your business has lost customers and/or revenue as a result of the statements. This can be shown by proving there has been an overall decrease in business, customers have left, or that the business has incurred additional costs to combat the defamatory reviews.
If these four elements are met, then your business likely has a cause of action for defamation. If someone is posting negative comments that you feel could harm or is harming your business, contact our firm to speak with one of our litigation attorneys about what we can do to help protect you and your business.