Cengage Advantage Books: Fundamentals of Business Law 9th Edition by Roger LeRoy Miller

Exercise 9

Corporate Reputations under Attack
In the pre-Internet days, disgruntled employees and customers wrote letters of complaint to corporate management or to the editors of local newspapers. Occasionally, an investigative reporter would write an expose of alleged corporate misdeeds. Today, those unhappy employees and customers have gone online. To locate them, just type in the name of any major corporation. You will find electronic links to blogs, wikis, message boards, and online communities-many of which post unadorned criticisms of corporate giants. Some dissatified employees and consumers have even created rogue Web sites that mimic the look of the target corporation's official Web site, except that the rogue sites feature chat rooms and postings of "horror stories" about the corporation.
Damage to Corporate Reputations
Clearly, by providing a forum for complaints, the Internet has increased the potential for damage to the reputation of any major (or minor) corporation. Now a relatively small number of unhappy employees, for example, may make the entire world aware of a single incident that is not at all representative of how the corporation ordinarily operates.
Special Interest Groups Go on the Attack
Special interest groups are also using the Internet to attack corporations they do not like. Rather than writing letters or giving speeches to a limited audience, a special interest group can now go online and mercilessly "expose" what it considers to be a corporation's "bad practices." Wal-Mart and Nike in particular have been frequent targets for advocacy groups that believe those corporations exploit their workers.
Online Attacks: Often Inaccurate, but Probably Legal
Corporations often point out that many of the complaints and charges leveled against them are unfounded or exaggerated. Sometimes, management has tried to argue that the online attacks are libelous. The courts, however, disagree. To date, most courts have regarded online attacks simply as expressions of opinion and therefore a form of speech protected by the First Amendment.
In contrast, if employees breach company rules against the disclosure of internal financial information or trade secrets, the courts have been willing to side with the employers. Note, also, that a strong basis for successful lawsuits against inappropriate employee online disclosures always includes a clear set of written guidelines about what employees can do when they blog or generate other online content.
FOR CRITICAL ANALYSIS
How might online attacks actually help corporations in the long run? (Hint: Some online criticisms might be accurate.)