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Defamation and Dealing With Negative Press

May 26, 2017

It seems that these days, more than ever, consumers are expressing their political and personal views by buycotting brands (or, the alternative, boycotting). Whether it’s the lengthy list of Trump-affiliated brands, the department store chain Nordstrom’s for not carrying Ivanka Trump’s clothing line, Uber for implementing a price surge during a terror attack or United Airlines in light of its recent passenger removal incident, consumers are not shy about expressing their disdain towards a particular brand by refusing to purchase its products and services and, of course, taking to social media.

Brand owners are no strangers to attacks online, and most have developed public relations strategies for how to deal with anything ranging from negative comments to widespread backlash. And, as these brand owners become increasingly prepared for dealing with such negative sentiment, they have also had to learn about filtering the real issues which threaten their goodwill from the often uninformed, crude and exaggerated ramblings of users who agitate for agitation’s sake.

How thick does a brand owner’s skin need to be in these cases? At what point can you draw a line and have more legal remedies available to you other than responding on Facebook that you are sorry a consumer had a negative experience and they should contact you offline to discuss it?

While unrelated to consumer complaints, negative comments and, so far, boycotts, we are currently witnessing a significant dispute play out right in front of us involving Subway and CBC.

In a February 2017 story featured on television and its website, CBC claimed that, after conducting extensive testing on various fast-food menu items, Subway sandwiches contained approximately only 50% chicken. Subway responded that the allegations are defamatory, false and misleading, and has sued CBC for over $200 million for defamation.

Defamation is a communication made about a person which harms that person’s reputation. When that communication is made verbally, it is referred to as slander. When that communication is written, it is referred to as libel. The latter, of course, is often more damaging since the written communication can be permanent.

In order for a claimant (in this case, Subway) to establish that defamation has occurred, the following elements of the legal test for defamation must be satisfied:

  1. the statements must be communicated to a third party (sort of a ‘if a tree falls in the forest…’ parallel);
  2. the statements must actually be about the person or company in question such that it can be concluded that the statement was published was referring to that person or company; and
  3. the statement must be false and disparaging to the person’s or company’s reputation.

There are several defenses available to people who are alleged to have defamed another, including (as CBC is likely to say) that its statements were true and verifiable. Another likely defense is that the statements were made as fair commentary and not intended to be malicious.

Claims for defamation do not need to establish that damages were actually suffered, but rather that a false statement was made which satisfies the legal test.

Subway and CBC likely have a lengthy dispute on their hands. For most other brand owners facing a public backlash, suing online trolls for defamation may seem tempting, but likely not always appropriate or advisable under the circumstances. Even where the legal test for defamation can be made out in a court of law, the court of public opinion may judge harshly the commencement of legal proceedings by a brand owner against an individual Facebook user. But that decision ought to always be weighed against the cost to the brand’s reputation of permitting the continued proliferation of those negative statements.

Chad Finkelstein is a franchise lawyer and registered trademark agent at Dale & Lessmann LLP ( in Toronto.

Tags: Franchising