Most people think of defamation as saying or writing something that unfairly damages an individual’s reputation. But defamation of a business is a common occurrence that can have real-life consequences for companies.
If someone libels or slanders your business, it could spell financial ruin for your organization. This action is also known as trade disparagement. What rights and options does your company have? The New York business lawyers of Rosenbaum & Taylor take a look.
What Is Defamation Generally?
Defamation is the act of damaging the reputation of a person or business. It is divided into two broad categories: slander and libel. Slander means saying something defamatory, while libel means writing and publishing it.
It is possible to defame a business in two specific ways. One is to slander or libel the company itself. Another is to slander or libel the business owner or a top executive or employee. Either of these can have disastrous repercussions for the company. New York business lawyers understand how critical a company’s reputation is, especially in the digital age. Bad news travels fast and can sink a company in less than a day.
When defamation is aimed at a business, it is known in New York as trade disparagement. That will be our focus here.
Proving Trade Disparagement
To prove trade disparagement, or defamation of a business, several factors are required in New York.
The plaintiff must prove that the defendant made a false statement. The statement itself must be public, intended for others to hear. This is sometimes known as publishing a statement.
The statement must have been made for the purpose of causing harm to the business. The intent must not only be that others hear or read the statement. It must be intended that the business would suffer financial loss. It is sufficient if the statement is made with the reasonable belief that such loss would occur.
The defendant must have known the statement was false or showed reckless disregard for whether it was false. In other words, it can be enough if the defendant simply did not care about the truth.
What Options Do You Have in a Trade Disparagement Claim?
Companies should be encouraged to engage in healthy competition with one another. But deliberately attempting to wreck a company’s reputation with lies is not healthy. This sort of unfair trade behavior is actionable and can result in substantial damages.
Your first response may be to initiate litigation. And while this is certainly your right, you need to make sure you can prove your elements first. You will therefore need to work with a New York business lawyer to build a case.
As part of that, you should gather evidence that demonstrates three key facts.
The fact that the defendant was responsible for making the false statement. Get a copy or recording or some sort of documentation of the statement. Make sure you can verify the defendant was responsible for it. And make sure you can prove it was false.
That the statement caused you financial harm. You can work with a New York business law attorney to establish this. But basically, you need to link the false statement with negative financial consequences for your company. You might need an expert witness to assist with this crucial causal link.
That the defendant knew or should reasonably have known the statement was false. You may have to show that the defendant displayed reckless disregard for the truth. Although, if you can prove that the defendant knew it was false, that is even better. Sometimes internal or private communications between the defendant and others can show this.
You may go into litigation or some sort of out-of-court settlement over the matter. But you need to be mindful of taking steps to undo the harm done by the defendant. Your New York business law attorney can discuss ways to mitigate this damage. It may require, for instance, that the wrongful party issue a public apology.
Don’t Let Someone Defame Your Business
If someone has disparaged your company, acting fast will be critical to repairing its reputation. Your business should not be made to suffer because of another party’s lies or disregard for the truth. Reach out to Rosenbaum & Taylor today to learn more about your rights and options.