An appellate panel has ruled a Chicago shipping corporation can claim it was defamed by emails sent to its management disparaging the company, saying employees are not synonymous with the company and amount to a third party, even if they are corporate officers or board members.
The Nov. 22 decision was penned by Justice David Ellis, with concurrence from Justices Cynthia Cobbs and Nathaniel Howse, of Illinois First District Appellate Court. The decision favored plaintiff Project44 in its action against FourKites. Both businesses are shipping logistics companies in Chicago.
In 2020 in Cook County Circuit Court, Project44 filed a defamation suit, alleging FourKites sent email messages to two Project44 board members. The messages claimed Project44 engaged in accounting fraud and was tied to the Chicago Mafia. A similar message was sent to Project44's chief financial officer. Project44 said it traced the messages to computers used by FourKites.
Project44 sued FourKites and several unknown FourKites employees.
FourKites countered that defamation did not take place, because the emails were essentially sent to the company itself, and not to a third party. The emails allegedly defamed Project44, but the chief financial officer and two board directors were core members of Project44 and so were synonymous with the company, according to FourKites.
Cook County Judge James E. Snyder accepted FourKites argument and dismissed the suit.
On appeal, Justice Ellis noted there is little case law addressing the issue, but there was enough to determine Snyder was wrong.
"A corporation can have its own reputation and identity, and if that reputation is attacked, it may use defamation actions to defend itself. And because a company’s reputation can be separate and distinct from those who run it, even at an executive level, we reject the idea that the corporation is the same as the agents who oversee it," Ellis said.
Ellis added: "Since the allegedly defamatory messages targeted Project44’s reputation — not the reputation of the recipients — the defamatory messages were published to a third party."
Ellis observed that a corporation "cares about its reputation among its employees," because it is interested in attracting and retaining good employees.
"Many people today choose to work for a company based as much on the culture or values of that company as on the job functions they perform. Defamation that threatens the corporation’s reputation within the company can be just as damaging as defamation published beyond the corporate walls," Ellis pointed out.
Ellis likened defamation as alleged by Project44 to corporate sabotage, in that the emails could "sow discontent, throw a wrench in its productivity, cause valuable employees to leave, or even steal away those employees."
Ellis concluded, "It would be unrealistic, unfair, and contrary to any principle of defamation law we recognize to embrace the artifice that these directors and officers were merely part and parcel of the corporation, that no harm to Project44’s reputation occurred because nobody besides the corporation itself received these messages."
The appellate court ordered the suit back to circuit court for further proceedings.
Project44 is represented by attorneys Douglas Albritton and Peter Hawkins, of Actuate Law, of Chicago.
FourKites is defended by attorneys Scott Gilbert and Adam Weiss, of the Chicago firm of Polsinelli.