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Despite Hollywood’s most recent high-profile case with Amber Heard and Johnny Depp, defamation cases are notoriously difficult to win and often susceptible to pretrial dismissal. Yet, a recent Oregon Supreme Court case—Lowell v. Wright—should have private employers take heed about potential liability for statements made by employees—even when they are not working.

In a case involving two rival Medford piano businesses, the Oregon Supreme Court returned a defamation claim to the trial court, which had earlier dismissed the case before a jury could hear it. On his day off and without his employer’s knowledge, Matthew Wright, an employee of Artistic Piano, visited his employer’s competitor, Piano Studios and Showcase. After his 45-minute visit, Wright later posted an unflattering review of Piano Studios on Google. Describing the rival store as smelling “like grandma’s attic,” the post accused Piano Studios of misrepresenting it could sell new Steinways and falsely claiming the age of a Yamaha piano on its showroom floor and further warned, “this guy can’t be trusted.” Wright posted this review, not with his work contact, but with his personal photography business name. Three months later, Piano Studios’ owner found the disparaging review and called Wright. Wright then fessed up to Artistic Piano’s owner who suggested Wright take down the review. Wright removed it without saving a copy. Piano Studios, unhappy with the unflattering review, despite it being removed from Google, brought a defamation action against Wright personally as well as Artistic Piano. In short, Piano Studios felt the post was an attempt by Artistic Piano—through Wright—to “cybersmear” it, i.e., to damage Piano Studios’ reputation and direct more business to Artistic Piano.

Oregon courts have long recognized claims for defamation, allowing the subject of derogatory speech to bring an action when an unflattering statement is made to a third person. A claim for defamation, though, is subject to defenses and privileges that can prevent the claim from going forward. Most notably in this case, the First Amendment freedom of speech serves as a defense (and limitation) when the speech involves either a public figure or a matter of public concern. Nevertheless, First Amendment protection is limited to opinions—no matter how outlandish or offensive—and not to misstatements of objective facts. In short, while the First Amendment allows open discussion and the threat of a claim of defamation should not chill speech, the First Amendment does not allow a speaker to knowingly lie.

In this case, the Oregon Supreme Court held that the case should be heard by a jury even though the post no longer existed. The Google review was recreated through the collective memory of four witnesses whose recollection was sufficiently similar for the court to evaluate the statements. And, for the second time in recent years, the court found a review of a business posted on the internet could be considered a matter of public concern; thus, allowing the speaker to invoke the First Amendment as a defense. While the general statements related to the store smelling “like grandma’s attic” and “this guy can’t be trusted” are more opinion-based and protected by the First Amendment, the two statements related to the brand of pianos sold and the age of a piano were verifiable factual assertions and therefore, “factual to be actionable.”

The crux of the Oregon Supreme Court’s opinion and the thrust of scholars’ interest looking at this case is the analysis at this next step. Oregon has traditionally made a distinction between media and non-media defendants in defamation cases. Where a plaintiff must prove that a media-defendant (who has invoked the First Amendment) has shown actual malice (meaning, the defendants knew that the statements were false or acted with reckless disregard of whether they were), a plaintiff has as lesser burden when the defendant is not media. Yet, in the age of blogs, online reviews, and self-publications, the definition of media is murky. It is not limited to the The New York Times and CBS, but does it encompass any statements, on any platform, on the internet?

The Ninth Circuit as well as many states—drawing on interpretations of U.S. Supreme Court cases—have rejected a media/non-media distinction. Unlike these other states, the Oregon Supreme Court retained this distinction, though, explaining that the case did not present an “opportunity for careful examination” of the media/non-media distinction and it would not overrule its past precedent. Moreover, the court made clear the distinction did not make a difference in this case, as Piano Studios would be able to show Wright acted with malice. Notwithstanding its decision to retain the distinction, it did not provide a clear definition of media/non-media to guide future cases. Because of the retained media/non-media distinction, where a defamation case is filed (state or federal court) will result in a different application of the law when a First Amendment defense is asserted.

A bigger issue for Oregon employers is one that the court did not thoroughly explore—an employer was sued for what its employee wrote outside of working hours, without the employer’s knowledge or permission, and without identifying any connection to the employer in the public post. Piano Studios alleged that Wright was acting as Artistic Pianos’ agent when writing his review. In a short footnote, the court explained Wright and Artistic Piano made all the same arguments, and it appears that Artistic Piano refrained from arguing that it was not responsible for Wright’s post.

Defamation claims still are difficult to maintain, and this case will go back to the trial court where Piano Studios, now ten years after the initial Google review was posted, still must try to prove its case to a jury. Yet, there are some key takeaways for Oregon employers:

  • Talk to employees about social media posts and reviews of competitors (or other businesses), and consider adding a caution in employee handbooks about the use of social media as it relates to competitors. Even if posts are on their own time, on personal accounts, or after hours, an employer may be subject to an action. That said, Wright was the manager of Artistic Piano and an employee’s position will likely be significant to a court.
  • Removing an unflattering or offending post may not be enough. While that may serve to limit any damages, it does not, on its own, preclude a claim.
  • While the First Amendment may serve as a defense to general opinions, factual assertions, i.e., statements that can be proven true or false, are more likely to be found to be defamatory.
  • If employees plan to make factual statements about a competitor, accuracy matters. Truth is a defense to defamation.
  • When a First Amendment defense will be asserted by a defendant, where a case is filed can make a difference; federal and state courts will apply different standards to plaintiff’s burden when determining intent for factual statements.

In posting his review, despite an assumed interest in helping his employer, Wright may have taken some wrong steps here. The case will continue to play out at the trial court, and we will watch this case as it travels back to Jackson County. If recent high-profile Hollywood defamation cases or local ones like these piano competitors’ dispute have you scratching your head, reach out to us and we will help further unravel and explain how claims of defamation intersect with the First Amendment.

The author credits University of Oregon law student Incainti Sofia McDonald for her capable assistance with background research on this case.

The legal issues impacting workplaces are ever changing (Employment Law in Motion!) and since publication, new or additional information not referenced in this blog post may be available. Employers should feel free to call on the Miller Nash team if you have questions or need assistance, and always consult with an attorney for legal guidance.

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