According to CBS Sports, a seven-year lawsuit from Brian McNamee against former major-league pitcher Roger Clemens finally came to an end last month, but it was a hard-fought settlement.
The trouble started when Clemens publicly stated his former strength trainer McNamee purportedly manufactured evidence and lied about the pitcher using performance-enhancing drugs back in 2008. McNamee's testimony was cited in the Mitchell Report, an investigation into the use of anabolic steroids in Major League Baseball (MLB), and implicated Clemens in using banned substances.
In turn, Clemens was indicted on six felony counts, among them...
- Committing perjury when he denied McNamee injected him with steroid.
- Making false statements.
- Obstructing Congress.
He was found not guilty of all charges in 2012.
But McNamee claimed Clemens dragged his name through the mud when he essentially called McNamee a liar on the public stage. So he sued Clemens over defamation. Seven years later, the case finally settled and Clemens' insurance provider is covering the costs. Good thing, too – seven years of lawyers' fees alone can get pretty steep, and though the settlement wasn't disclosed, it was probably a considerable chunk of change.
While your business doesn't have to worry about getting tangled up in a dramatic trial over steroid use and the subsequent fallout, defamation is something any person or business can be accused of.
Defamation: Easy to Commit, Expensive to Fight
Defamation is a catchall legal term for any statement that harms someone's reputation. The most popular examples of defamation are…
- Libel: written defamatory statements.
- Slander: spoken defamatory statements.
According to Nolo.com's primer "Defamation Law Made Simple," for a statement to be defamatory, it must be…
- Harmful to the subject's reputation (e.g., they lose their job or are shunned by friends and neighbors).
- Published so the public can hear, see, or read it.
- Unprivileged (e.g., not made during a deposition).
When your business uses social media, it's all too easy to spout off opinions without thinking first about their legal implications.
For example, say a client has you running circles on a project. They keep changing their mind so you have to redo work over and over again. Aggravated, you post a few status updates on social media about the client to let off steam.
Bad news, friend. The client sees your post and accuses your business of libel. They claim that other businesses are reluctant to work with them because your statements have dinged their professional reputation.
Seem farfetched? Read about how a freelancer was sued for $82,630 over a tweet that complained about a client's payment methods in "How Commercial General Liability Insurance Can Protect You from an $82,630 Tweet."
Defamation Scandal? There's an Insurance Policy for That
Libel, slander, and other advertising injuries are among the risks you take on when your business uses social media for brand building and marketing. However, you can protect your business from advertising injury lawsuits by investing in General Liability Insurance. If your business is accused of publishing a libelous tweet, for example, your policy may offer coverage for:
- Lawyers' fees.
- Court costs.
- Settlements or judgments.
A legal entanglement can be expensive enough to shut down a small business if it doesn't have the means to pay for its legal defense or settlement costs. Though a settlement is usually less expensive than letting a case get tried in court, it may still be more than a small business can spare out of pocket. This is especially true when you consider that both parties have to agree on the monetary amount – the person or entity suing your business probably won't back down for a paltry sum.
That's one of the many reasons why General Liability Insurance is such a wise investment for businesses operating in the digital age. To learn about additional ways to reduce your advertising injury risk, read our eBook Tweet or Twibel: The Small-Business Owner's Guide to Advertising Injury.