“You will HATE working here.” What can an employer do about a negative online review?

16 July 2018

This quote is taken from an online platform dedicated to employees expressing their anonymous opinions about their employers.

The website in question, Glassdoor, was established in 2007 by two ex-Microsoft executives. Since then, it has expanded to over 30 million users in America. Increasingly, job applicants rely on its reviews as a source of information to frame interview questions to potential employers. Its site includes salary information, CEO ratings as well as employee reviews.

The quote in the title was written about an American law firm. Unimpressed, the managing partner sued, making unflattering statements about the parentage of the anonymous employees along the way.

Another employer faced with a scathing review took a contrasting approach by posting the following content:

“Thanks for taking the time to offer your feedback”
“Please shoot me an email or just swing by my desk” 
“Hope to chat soon”

Should an employer fire their toxic employee, and then sue them for every cent?

Or, instead engage, and work on improving their online rating to impress job applicants?


There are three legal options to repel an attack on reputation:

1. Defamation

Defamation law underwent major reform in 2006 resulting in uniform legislation across Australia. The deliberate policy objective of these reforms was to make defamation a more difficult claim by:

  • imposing a cap on non-economic loss indexed each year
  • abolishing exemplary damages
  • barring corporations with more than 10 employees from suing
  • providing a number of defences, for example, justification, honest opinion, contextual truth
  • imposing a 12 month limitation period

A defamation claim was always expensive and complex. Now, a litigant must file a claim within a shorter time period, knowing a defendant has more defences available, and compensation is less lucrative.

One key principle remains unchanged – any third party, such as a newspaper, that publishes defamatory content, is liable for any defamatory content in the same way that the author of the offending content is liable

2.  Injurious falsehood

The tort of injurious falsehood requires an aggrieved party to show that:

  • a false statement has been made about the employer’s business or property
  • publication of that statement has been made to a third person
  • malice
  • proof of actual damages

This claim is not a natural fit for an employer trying to correct an adverse online opinion. How does an employer show a statement is false, for example, that an opinion that a workplace has a poor culture is a false opinion? Proof of actual damages is a further hurdle. The role of a court in a civil claim is to compensate not punish, and to compensate only for losses proven to have a link to the adverse online review.

The Court of Appeal of the Australian Capital Territory considered the following claim in an employment dispute. A public servant, dismissed within his probationary period, sued the Australian Public Service, specifically the Director of Human Resources for injurious falsehood. The claim failed, finding three comments made in the context of disciplining the employee did not meet the stringent test for injurious falsehood.

3.  Misleading and deceptive conduct

This is a common consumer law claim that also regulates the employment relationship.

An employer must not engage in misleading and deceptive conduct in making an offer of employment. However, it does not goes as far as regulating what is said or done in the course of the employment relationship. A further requirement for this type of claim is that any conduct must be made in ‘trade or commerce’.

In practice, relying on this provision against an employee is unlikely to be a legally viable option.

Social media websites and the American context

One Federal Court judge last year was critical of Google’s disinterested approach, when a partner of an accountancy firm had to resort to legal action to have Google take down a defamatory website promoted by its Adwords advertising platform. Bromwich J stated  “Google cannot simply wash its hands of what will, from time to time, arise from its commercial activities.”

A significant legal and cultural difference between Australia and the United States, is the protection of free speech in the United States. In the U.S., websites and online social network platforms benefit from a legal immunity conferred by an American statute called the Communications Decency Act. The author is still potentially liable, but not the platform hosting the content. An online publisher has legal protection, unless that publisher has acted maliciously

To overcome this, an aggrieved (Australian) party can sue an American company in Australia. This occurred in the South Australian Supreme Court in Dr Duffy v Google Inc. Dr Duffy succeeded, having previously lost an earlier claim against Google’s Australian subsidiary, which itself had no involvement in posting content on its site.

For an employer, the prospect of suing in an international context is daunting. A legal dispute over jurisdiction will be inevitable whether an aggrieved employer sues an overseas company in Australia under Australian law, or sues in America and seeks to overcome the greater obstacles placed by American law.

And Sue Who? Why would you?

Another obstacle is to identify who the author actually is. There are processes under Australian or American law to identify the author, but it is a practical difficulty.

Then if you identify who the author is, there is the question of whether the employee is worth suing. The first resort is to look calmly at the causes and reflect on whether legal action in itself can give oxygen to the unwanted flames of employee discontent.

If an employer overcomes these initial hurdles, there is still a risk that the employee may take legal action because of the action the employer has taken. In California, an employer terminated a transgender employee after the employee admitted to making a critical statement on Glassdoor about the discriminatory workplace practices favouring traditional family units. The employee complained to the US Equal Employment Opportunity Commission, which prosecuted the employer, an educational technology company. It was found to have breached American EEO legislation.

Glassdoor will test the traditional boundaries of the law. For example, it is untested territory whether an employee posting hostile content on Glassdoor is exercising a ‘workplace right’ for the purposes of a General Protections claim under the Fair Work Act.

Instead of suing?

If online employee reviews become the norm in Australia, an employer will need a strategy on how to respond. An immediate, polite and open response to adverse comment may put the employer back on the front foot, if the hostile employee cannot back up a claim.

While hotels, restaurants and other service providers have had to adapt to unhappy customer reviews made online, the employment context is different. A current employee has a duty of fidelity and confidentiality to their employer. An ex-employee still has an ongoing duty of confidentiality.

Engaging with employee discontent at the onset is vital. The response needs to be part of an employer’s strategy of staff communication. For employers who do not know what that is, the brave new world of online employee reviews should be a prompt to prepare for this significant change in workplace culture.

If you would like advice or assistance with any of the above issues, please contact a member of our Workplace Relations team.