Reputational fallout: How to deal with a news leak

An employee who leaks negative information, such as claims of law breaches or poor quality products, to the media could be sued in defamation, an employment law specialist says.

But the first – and safest – step to address this issue would be to seek injunctive relief to prevent further leaks, ATMD Bird & Bird LLP partner Goh Seow Hui told HRD Singapore.

“Injunctive relief can be sought by an employer on an interim basis; that is, without the need for a full trial (a prima facie case and an undertaking as to damages will be required).

“However, some employers may prefer to issue a warning/cease and desist letter, without resorting to legal proceedings at the first instance.”

While some debate exists in the Commonwealth on whether a company may sue for defamation, there is at least one High Court decision in Singapore where a defamation claim by a company was allowed, Goh said.

“It would therefore appear that an employer may bring a claim in defamation against the employee  - although this is rarely necessary, as the employer will already have a contractual claim in damages against the employee for non-disparagement and breach of confidentiality (if the negative information is also confidential in nature).”

The burden of proof would lie on the party making the allegation, she said.
“In this case, the employer will need to prove a breach by the employee, and the corresponding loss suffered by the employer.”

The media outlet who published the information could also be liable in defamation, Goh said,

“It is possible to sue the media outlet in defamation, subject to the usual defences of justification, qualified privilege and fair comment.”

While there have been no reported cases along these lines in Singapore as yet, Goh anticipated ‘negative information’ might include situations where the employer has breached the laws (such as with bribery or corruption) or where the employer manufactures poor quality products.