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When Does Bad-Mouthing the Competition Become Defamation?

By Bruce Jervis

 

Disparaging the competition is a time-honored tradition in our system of free enterprise. Everyone has an opinion and many are eager to share, particularly when it is seen to provide a competitive advantage. But a recent case from the Virginia Supreme Court illustrated the difference between an expression of opinion and a defamatory misstatement of fact.

 

A contractor allegedly told a public project owner, to paraphrase, “My competitor told me he is going to screw your agency with an unfounded change order demand.” When sued by the competitor for defamation, the contractor said the alleged statement was a constitutionally protected expression of opinion.

 

The Virginia high court disagreed. It is one thing to say, “I consider my competitor’s business practices unethical.” It is very different to say, “My competitor has admitted to me engaging in unethical business practices.” The former is a protected expression of opinion. The latter, if proved untrue, is actionable defamation.

 

The lesson here is that if one is going to bad-mouth the competition, keep it general and make it clear it is your opinion. Any allegation of a specific act of dishonesty or impropriety must be backed up by hard evidence. What do you think?

 

COMMENTS

There is nothing to be gained by bad-mouthing competitors. Nobody wins Hatfield/McCoy type distractions and they cheapen the clients image of us all. Glass houses and black kettles come to mind. Does Pepsi claim that Coke rots your teeth?
Posted by: Mike Knight - Friday, March 29, 2013 10:41 AM


So true, and it's become even more frequent of late that clients are asking questions about contractors and other architects that have the essence of gossip. Even if I know of what they ask, and especially if it is true, I still stay 500 ft. back from it. I would rather have everyone know that what happens in Vegas stays in Vegas with me, than to be a part of some tid bit of info, gossip or fact, that would deny another a chance to prove themselves either worthy or not. Everyone deserves at least that much.
Posted by: Gene - Friday, March 29, 2013 11:06 AM


It is much better to speak in general terms, and encourage the client to research the competition (and yourself), providing references. We don't want to lower ourselves to the standard of politics!
Posted by: Michael - Friday, March 29, 2013 11:18 AM


This is what a city inspector did to us the other day. The inspector goes around town bad mouthing other plumbing companys and gets the customer to go with a well known affiliate of his. We contacted the main street chief inspector and as far as we know the requ
Posted by: Joe Corcoran - Friday, March 29, 2013 11:24 AM


Very True. In my opinion, the time and energy spent in manufacturing derogatory allegations against the competitor should rather be spent on innovative strategies to give you the commpetitive edge. I believe that if a company resorts to defermation of the competition under any circumstance, it shows to some extent that they have run out of ideas and are in a desperate situation.
Posted by: Ted - Friday, March 29, 2013 1:31 PM


So, referring to the substandard contractor as a 'Jack Leg' isn't cool? No fair...no fun! ;)
Posted by: Jason - Friday, March 29, 2013 9:40 PM


Best practices: keep yourself above the fray...it is impossible to have too much integrity...or to be too honorable!

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