The New Zealand toy company, Zuru, contended that the online comments of former employee/s were defamatory. The reviews included comments such as ‘toxic culture’, ‘burnt-out factory’, and ‘incompetent management’, and the company argued such comments were defamatory and had caused financial loss. However, to sue the reviewers Zuru needed their identities, and took Glassdoor to court in California, where the company is headquartered.
Glassdoor has successfully defended previous cases where they have been requested to break reviewer anonymity. However, as Zuru intended to sue the reviewers in New Zealand, the court was required to look to New Zealand law to evaluate the merits of the case. In New Zealand, when a corporation sues for defamation, it must prove four elements: (1) that a statement was made, (2) that the statement was defamatory, (3) that the statement was published by the defendant, and (4) that the statement caused or is likely to cause the defendant to suffer a monetary loss. (Reference: Zuru, Inc. v Glassdoor, Inc., District Court, ND California 2022).
Glassdoor contended that the negative reviews constituted ‘opinion’ (rather than defamatory statements) and that Zuru could not prove a financial loss. However, while the US First Amendment provides protections for opinions, the same is not the case in New Zealand where there is a more limited protection. Secondly, the court found that Zuru was not required to prove that it had suffered a financial loss prior to going into the defamation trial (at which point the success or otherwise of the case would rest on whether the four elements were proven).
It is not known whether Glassdoor will appeal the decision.
Outlook for Employers: Online platforms face increasing obligations regarding content and comment on their sites. The law goes further in some locations (such as Australia) where the platform itself is liable for defamatory statements made by users. As such, it will be interesting to see whether the Glassdoor implements future guardrails to protect users – for both the employee and Glassdoor’s sake.
Michelle Swinden
Executive Director, Asia-Pacific, HR Policy Global
Contact Michelle Swinden LinkedIn