What Is Slander in Business?

Slander is a verbal false statement that harms a person's or business' reputation. The law does not treat slander differently for small businesses. Whether a person slanders a business or a business slanders a person, it is a tort that gives rise to a civil action for which the victim can sue.

Defamation is the general category under which slander falls, and the two terms are often used interchangeably. Libel is another form of defamation that occurs when a statement is written rather than uttered orally. Victims of slander are sometimes also victims of libel and typically sue under the general claim of defamation. Individuals suing for libel do not have to prove damages, but when individuals sue for slander, they must prove damages.

When someone slanders a business, the business does not need to demonstrate actual harm, such as the loss of business. It is presumed that false negative statements are harmful to businesses. The business can file a civil action in their local state court requesting damages and attorney's fees. If the slander is ongoing -- such as if a person is continually saying negative, untrue things about the business -- the business may also request injunctive relief or a restraining order that prohibits the person from continuing the defamation.

When a business commits slander against an individual, the person must prove that they were harmed by the action. Calling a person stupid might hurt his feelings, but it is only slander if the person can prove that it harmed his reputation or his business in some way. Individuals suing businesses for slander are eligible for the same relief as businesses, including attorney's fees, damages, injunctive relief and restraining orders.

Slander lawsuits can be difficult to win because, unlike libel, there is often not a record that the statement was made. If you have witnesses or recordings of the defamation, submit this into evidence. Business owners should note that suing over slander is not always the best course of action, because lawsuits are public records. You may actually draw attention to the negative statements about your business, and when the statement is made only once, drawing attention to it may be more harmful than simply ignoring it. In some cases, customers may react negatively to a slander suit because they feel that it infringes on people's freedom of speech.

Truth is an absolute defense to slander, and if the person who committed the slander can prove that he believed the statement to be true, he may win the lawsuit. Statements couched in opinion are also generally not slander. For example, a person who says, "In my opinion, the business owner is incompetent at managing finances," may have a defense, while a person who repeatedly emphasizes a business owner's financial incompetence may have committed slander.