Small Businesses and Trade Libel

Trade libel is a legal term that refers to slander, libel or disparagement of one business (including its products or services) by another business in written or oral publication. All small businesses must be acutely aware of this term and how to avoid it. Considering that businesses are engaged more than ever on the web and on social media, companies are vulnerable to trade libel lawsuits more than ever before as well.

Doing business can be competitive. When multiple businesses compete for a similar customer base, comparisons are natural. There’s a fine line between legitimate product comparison, and outright libel. For example, if your business produces an advertisement claiming that a competitor’s product is of bad quality, then your business will be at risk for a trade libel lawsuit. It’s never okay for a business to make untrue or dubious claims about another’s business or its products.

Some of this is largely common sense. But a surprising number of businesses are getting sued over trade libel and defamation. So here are several best practices that will help your company avoid an expensive lawsuit:

Develop an in-house policy: You must have an in-house policy that protects your company against trade libel. It should explicitly state what’s acceptable and what’s not acceptable when making marketing claims of any kind. Everyone who works at your company, including interns and contractors, should understand this policy and follow it. You should develop this policy with legal experts. Global Resources LLC can help your small business develop a sound trade libel policy at an affordable rate.

Review social media posts: Those little tweets and the Facebook posts are what get most companies into trouble. Do not allow employees or marketing personnel to say whatever they want on social media. These posts should be reviewed by one or two people. It’s paramount that social media posts that mention people or businesses by name are thoroughly monitored before publication.

Train employees: Employees must be at least minimally trained to avoid trade libel in all written or oral publications put out by the company. You can hire a lawyer or a business consultant to provide lectures so your employees know what’s acceptable and what’s not.

In addition, Global Resources Reviews for small businesses are designed to point out weaknesses in policy or practice that lead to situations like trade libel lawsuits. Conducting an annual review therefore will put your company at less risk.