Recently, a Shanghai court ordered a former employee to publish a written apology in the media and pay part of the employer's legal costs for defaming the employer.
Following termination of employment, the former employee emailed former colleagues and the employer's customers alleging that while still employed the employer had among other things forced her to sell expired-warranty or unregistered products in violation of Chinese laws, stolen her personal information by installing malware on her cell phone, and terminated her employment unfairly as soon as there was a slowdown in work. Some individuals receiving the emails were sympathetic and expressed outrage about the employer's alleged behavior. The former employer sued under tort law claiming reputational infringement.
The former employer claimed that all the allegations in the former employee's emails were untrue and that those emails resulted in the loss of potential business opportunities for the employer. The court ruled in favor of the employer and ordered the former employee to publish a written apology in the media and pay part of the employer's legal costs.
Key take-away points:
Employers concerned with how to prevent a former employee (whether terminated unilaterally or mutually) from disparaging the employer's reputation should welcome this case.
This case shows that employers can use the tort theory of reputational infringement to protect themselves against defamation by former or current employees.