Online employer review service Glassdoor can't escape a lawsuit from two Mississippi-based charter air services claiming Glassdoor should pay for allowing allegedly defamatory reviews on their site.
On Aug. 21, U.S. District Judge Michael P. Mills, of the Northern District Court of Mississippi, said a provision of federal law that generally shields social media companies and online platforms from lawsuits over content created by users doesn't necessarily apply to Glassdoor, because the review site essentially forces reviewers to identify themselves as an employee, even if they are not.
The case landed in Mississippi federal court in 2023, when two closely related, but legally separate private jet transportation companies, Nicholas Air and Corr Flights Inc., filed suit against Glassdoor. Court documents refer to the two companies together as "Nico."
According to court documents, the owners and operators of Nicholas Air discovered negative reviews about the companies on Glassdoor. The charter flight companies believed the reviews, which allegedly were posted by anonymous ex-employees, to be defamatory.
The air services further believed the reviews violated employment contracts which "indefinitely prohibits 'disclosure of any and all information related to or in any way connected to [Nico.]"
The charter air companies then contacted Glassdoor, seeking to correct the reviews, but learned they could not "do so without claiming a Glassdoor employer account" and be "forced to agree to Glassdoor's terms of use contract without the opportunity to negotiate."
Despite reportedly sending a detailed demand letter and receiving assurances from Glassdoor that it was reviewing the demands, Nicholas Air said Glassdoor never responded to its correction demands.
The charter flight services then filed suit, accusing Glassdoor of defamation and other counts.
Glassdoor responded by seeking to dismiss the lawsuit, asserting it can't be sued in Mississippi court and that it is shielded by immunity under the federal law provision known as Section 230 of the Communication Decency Act.
Enacted in 1996, the Communication Decency Act essentially has authorized the explosion of social media services, like Facebook, YouTube and X, formerly known as Twitter, by creating a legal shield against defamation and libel claims for companies that don't create and publish their own content, but offer platforms on which users can publish their own content.
The judge rejected Glassdoor's efforts to dismiss the lawsuit on so-called "personal jurisdiction" grounds. While Glassdoor is based in San Francisco, the judge said Glassdoor actively invites people to post reviews about companies operating elsewhere, including in Mississippi, and then required companies they know are located elsewhere to create employer accounts on the site before they could lodge complaints about the reviews.
"Both Glassdoor and its users purposefully directed activity to the forum state (Mississippi), and Glassdoor should have anticipated being haled into court here," the judge wrote in his order.
And the judge said Glassdoor also should not expect to receive protection from "Nico's" lawsuit under Section 230.
As in other cases against social media companies, including online review site Yelp, the judge said Glassdoor in some ways becomes a liable content creator by taking a crucial "creational step" or by forcing "its users to take such a step."
In this case, Glassdoor forced the anonymous reviewers to "select between 'current employee' or 'former employee' before leaving a review," even if they, like Nicholas Air, allegedly have no direct employees.
"A negative review from an employee carries more weight than a negative review from a third party or a contractor, and, by forcing users to state they are (or were) employees and giving them no other options, Glassdoor is effectively making the employee-statement themselves," Mills wrote.
"And although a significant majority of the harm undoubtedly stems from other material in the reviews such as the star ratings and user comments, some of this harm could plausibly come from the forced employee misrepresentation. Therefore, solely to the extend the employee misrepresentation is defamatory, Glassdoor is not shielded from liability by (Section 230.)"
The judge did agree with Glassdoor that, by registering on its site, Nicholas Air had agreed that it cannot sue in Mississippi. So, while the lawsuit can proceed, the claims specific to Nicholas Air will be severed from the case and transferred to federal court in San Francisco, Mills ruled.