There is no shortage of defamation lawsuits in corporate America. Defamation lawsuits can be brought by former employees accusing a company of making false statements about the former employee or by companies seeking to protect their good reputation. For example, ex-employees falsely accused of stealing trade secrets or corporations subject to defamatory remarks that result in lost profits or customers may sue for defamation.

To be considered defamatory, a statement must satisfy certain basic elements. It must include (i) a false statement of fact, (ii) about the plaintiff, (iii) that hurts the plaintiff’s reputation, and (iv) is published to a third party. The defamatory statement must be the fault of the defendant and cause damage to the plaintiff. In order to satisfy the publication element of a defamatory claim, the statement just needs to be heard and understood by a third party. It does not actually need to be publicized. Plaintiffs should also be aware of the statute of limitations for bringing a defamation lawsuit under applicable state law. In many states, the plaintiff must file the lawsuit within 1-2 years of the date of publication.

Defamatory statements can come in two forms—libel or slander. The key distinction between libel and slander is that libel is in written form whereas slander is spoken. Since libel is in written or otherwise permanent form, damage to the plaintiff is presumed. In contrast, in a defamatory claim involving slander the plaintiff must show special damages such as providing evidence of economic harm or lost wages. There are certain statements that are classified as slander per se, meaning that the statement is so vile that damages are presumed. The slander per se category covers statements injuring someone’s professional reputation, imputing someone of committing a serious crime, and accusing someone of having a loathsome disease.

The burden of proof differs depending on whether the plaintiff is a private individual or a public figure. Private individuals must prove negligence, meaning a failure to use reasonable care. Public figures must show evidence of actual malice in order to succeed in a defamation lawsuit. Actual malice means the defendant demonstrated a reckless disregard for the truth and had knowledge, or should have reasonably known, of the falsity of the statement. Similar to public individuals, corporation plaintiffs are held to the actual malice standard.

A defendant faced with a defamation lawsuit can mitigate the amount of damages or avoid liability by asserting a privilege defense. Truth serves as an absolute privilege defense in a defamation lawsuit. When absolute privilege applies, it provides complete immunity from liability. A qualified privilege defense is available for statements made in good faith and with proper intent by someone interested in the subject matter. Example contexts for when the qualified privilege defense may apply include job references by former employers and statements made in official government proceedings.

In situations involving media defendants, a good faith retraction of a defamatory statement can limit the amount of damages that the plaintiff can recover. Under state law, the plaintiff is typically required to provide a retraction demand notice to the media defendant before a defamation lawsuit can proceed.