If an employee has used social media to make a defamatory comment about one of his or her employer's competitors, what should the employer do?

An employer may be held to be vicariously liable for any defamatory statement made by an employee in the course of his or her employment. If an employee has used social media to make a defamatory comment about one of his or her employer's competitors, the employer should act quickly to limit the damage caused.

In the first instance, the employer should seek to have the defamatory statement removed immediately by the employee since this is probably the quickest and most practical way of preventing further publication. If the employee refuses to do so or is unable to, the employer should take steps to contact the social networking site to have the statement removed.

The employer should also consider commencing disciplinary action against the employee.

If the competitor discovers the statement and wishes to pursue an action against the employer for damages for harm caused to its reputation, the employer should consider making an "offer of amends" under s.2 of the Defamation Act 1996. Section 2 allows a party who has defamed another to offer to pay damages and costs and make an apology at the outset so as to avoid any associated litigation. Using this strategy often means that the vicariously liable employer can achieve a 50% discount on the damages payable, which makes it an attractive option.

However, before making this type of offer, the employer should first satisfy itself that it is liable for the employee's actions and that the employee was not "on a frolic of his or her own", ie acting outside the scope of his or her employment.