Loading ...

Reckoning by records - injurious falsehood claims by disgruntled employees

Maintaining adequate records is an important part of business management for employers. This is especially true for employee relations when things go wrong - for example, in disciplinary procedures.

Adequate records also play an important role in less-anticipated situations, such as in the event of injurious falsehood and other tortious claims against disgruntled employees.

This article discusses the importance of record-keeping and other governance practices for employers in the context of tortious claims against aggrieved former employees. In doing so, we reveal the importance of robust record-keeping and its capacity to allow employers to reckon with disgruntled employees early, before court proceedings are required.

Injurious falsehood

It’s an all-too-common scenario: a disgruntled employee leaves a business with an axe to grind and takes to social media to air their grievances. The employee takes aim wherever they can, outright lying in the comment section about their former employer and misrepresenting a business’ products and services in Google reviews.

This conduct leaves businesses having to figure out how to stop the barrage of comments and undo the reputational damage to their business. The question is, how?

In most circumstances, defamation is not an available cause of action unless the business is an ‘excluded corporation’ - that is, with less than 10 employees, or not operating for profit.

One option may be for employers to commence court proceedings against the employee to seek relief for injurious falsehood. This is a tortious claim brought against someone who maliciously makes a false statement about a business’ goods or services.

Unlike defamation, all corporate entities can bring a claim for injurious falsehood. This opens the door for most businesses looking to defend themselves when they otherwise might not have been able to through defamation claims.

But not every negative comment qualifies. To be successful in a claim for injurious falsehood against a former employee, the business must be able to prove four things:

  • the former employee made a false statement about either the business’ goods, or the business itself

  • the former employee published that false statement to a third party

  • the former employee’s statement was motivated by malice

  • the business suffered actual financial loss and damage because of the former employee’s false statement.

Let’s break those elements down.


The impugned statement must be false. The onus is on the business to prove, by reference to actual facts, that the statement is untrue. Also, the false statement must be about the “goods or business”. It is not sufficient for the statement to be about an individual person’s reputation.


The false statement needs to be “published” to a third party. Online statements posted in public forums or comment sections likely qualify, as well as other written, pictorial and even oral representations.


Establishing malice requires evidence of the former employee’s motivation and state of mind. There are stringent requirements for stating the facts relied on to establish malice.

Almost always, the former employee will deny that there was any ill will in making the statement. The business will need evidence to counter this denial. Malice in the context of claims against former employees is usually evidenced by misuse of the business’ confidential information by the employee, breach of post-employment contractual obligations or false statements, which the employee knows are demonstrably false.

Whilst malice will typically be inferred from affirmative knowledge of falsity, a mere lack of affirmative belief in truth alone is insufficient to establish malice. Negligence or carelessness as to truth is insufficient to establish malice in the context of injurious falsehood.

In the context of injurious falsehood, malice may be inferred where a false publication was made with an intent to injure without a justifiable cause and with actual knowledge of falsity (or recklessness as to the truth). Malice is a question of motive, intention, or state of mind for some indirect purpose or motive.

In many instances, proof of a genuine belief in the truth of factual allegations made, even where such allegations are damaging, will defeat a claim of malice.

This is one of the areas in which robust business records are of most assistance to businesses in protecting and vindicating their reputation. Accurate and contemporaneous records are usually capable of disproving false statements made by aggrieved employees and are often admissible as evidence, including by exceptions to the hearsay rule and other objections.

Here, the surrounding circumstances can come to the rescue - especially if it can be shown that the former employee knew that what they were saying was false. Almost always, this issue will be a matter for evidence assessed on a case-by-case basis and will often turn on effective cross-examination at trial.

Financial loss 

There also needs to have been actual damage to the business. It is not enough to say that those working for the business had hurt feelings. The statement needs to have driven down sales or caused the loss of a business opportunity. This is the second area in which business records assist, as documentary evidence of financial loss will be required to satisfy this element of the cause of action.

Evidently, commencing court proceedings for injurious falsehood is no trivial pursuit. It should be reserved for cases involving serious consequences from the false statement and after all steps have been taken, including writing to the publisher to seek to resolve the matter by agreement.

Available relief

In circumstances where all other avenues of resolution fail and a court application is necessary, the court can provide two different kinds of relief for injurious falsehood where the elements are established:

  • Injunction: A court can order the employee to stop making false comments. The injunction may even require the publication’s removal. Interim injunctions are difficult to obtain because the standard position is that the law is hesitant to interfere with freedom of expression except in serious and justifiable circumstances.

  • Damages: If the comment has caused measurable loss, then the business can recover damages from employees. However, prospects of recovery are an important consideration and even in the event of a successful claim with judgment, there are always unrecoverable out of pocket legal expenses even for successful litigants.

Alternative dispute resolution and litigation

Injurious falsehood isn’t always an answer, but when it is, it is a powerful means to silence former employees spreading lies and vindicate the business’ reputation. A well-timed claim can put out the fire and prevent further damage. However, as alluded to above, litigation is a risky, time-consuming and expensive process best avoided wherever possible.

That said, the role of consistent, accurate and comprehensive record keeping is often highly beneficial to business owners and employers because they provide strong grounds for employers to demand removal of unlawful publications by former employees. The same utility extends to other rights such as protection of confidential information and enforcement of restraints, all of which are assisted by high quality business records.

With good records, and a well-articulated case, a strong demand letter may well resolve the situation without the need for litigation.

Bartier Perry provides a wealth of experience and expert legal knowledge on workplace law and culture as well as reputational risk management and dispute resolution. Please contact one of the authors of this article for a confidential legal discussion if you or your business requires assistance.

Authors: Adam Cutri, David de Mestre & Joshua Handley