Cybersmear May Be Coming to a Website near You: A Primer for Corporate Victims; How to Respond or Combat Venomous Comments from Current or Former Disgruntled Employees Presents Both Legal and Non-Legal Problems

By Ciarlone, Thomas G., Jr.; Wiechmann, Eric W. | Defense Counsel Journal, January 2003 | Go to article overview

Cybersmear May Be Coming to a Website near You: A Primer for Corporate Victims; How to Respond or Combat Venomous Comments from Current or Former Disgruntled Employees Presents Both Legal and Non-Legal Problems


Ciarlone, Thomas G., Jr., Wiechmann, Eric W., Defense Counsel Journal


SAMUEL Taylor Coleridge wrote, "Whispering tongues can poison truth." The Internet is no exception to this simple maxim. With one of three Americans logging onto it daily, and at least 350 million users worldwide by 2003, the Internet has the potential to become the electronic rumor mill for the new millennium. (1)

Much of the time, online gossip is merely scurrilous and perhaps embarrassing. For example, corporate executives and their alleged sexual proclivities are favorite topics for online badmouths. (2) Sometimes, however, boorish banter gives way to injurious falsehood. Consider the story of popular cookie manufacturer Mrs. Fields. In 1996, speeding along the information superhighway was speculation that the company planned to donate pounds of cookies, brownies and other sweets to an O.J. Simpson victory party. Despite its facial implausibility, this myth inspired rumblings of a national boycott. Mrs. Fields was unable to expose the hoax until it retained a public relations firm at great expense. (3)

Then there is Varian Medical Systems, a publicly traded, Fortune 500 company with a market capitalization in the billions. Disgruntled former employees posted more than 14,000 messages--on hundreds of websites--accusing the company and its management of everything from homophobia to pregnancy discrimination to the surreptitious videotaping of public bathrooms. When Varian sued them for defamation, the defendants turned around and created their own web site. Varian prevailed on the merits after a protracted trial. (4) But as a practical matter, it may have won the battle but lost the war. It incurred substantial legal fees and generated negative publicity, but it has yet to silence the defendants, who continue to lambaste the company on their home page. The victory was bittersweet and more or less pyrrhic. (5)

As a general proposition, civil libertarians would applaud this result. These activists insist that the typical action to suppress online discourse is frivolous. It serves only to harass, they say, and often offends constitutional rights, including those to privacy and free speech. (6)

Taken to its extreme, this rhetoric brings David and Goliath into the digital age: Corporations dig deep into their pockets to pay for lawyers whose tactics aim to intimidate and ultimately muzzle computer-savvy but underfinanced critics. (7) Whatever facial appeal it may have, such hyperbole cannot withstand closer scrutiny. To urge that corporate America seeks only retribution when it pursues scandalmongers is to ignore certain economic realities and policy concerns.

When broadcast over the Internet, defamatory speech sometimes causes substantial monetary losses, especially for publicly traded companies. Stock prices can fluctuate wildly; their movement is a function of information or, as the case may be, misinformation. Cyberlibel can manifest itself not only as personal potshots that bruise egos, but also as institutional slurs that move markets. Companies that try to curb the dissemination of misinformation are improperly cast as corporate bullies. Quite the contrary. These companies are honoring their obligation to shareholders to attend to matters that jeopardize reputation, brand name, and thus profitability. (8)

Unbridled innuendo has broader, systemically corrosive consequences to society. It compromises meaningful dialogue. Cloaked in anonymity and unencumbered by editorial filters, almost anyone with a computer can take to the Internet and share their convictions with the world at large. This has the cumulative effect of generating massive amounts of conflicting information, the credibility of which is frequently beyond evaluation. The online marketplace of ideas becomes increasingly incoherent and in the final analysis struggles to fulfill what should be its central role: an arena in which competing ideas collide, but out of which the truth eventually emerges.

What are the theories of liability that corporate plaintiffs may enlist to combat cybersmear campaigns? …

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