Glassdoor Partially Fixes a Bad Section 230 Ruling–Nicholas Services v. Glassdoor

This case involves two interrelated companies in the private jet industry. One entity (Nicholas Air) was the public brand. The other entity (Corr Flight) provided all of the staffing to the public brand. Employees from the staffing company posted negative reviews on Glassdoor about the public brand (see the Glassdoor page). The Mississippi court said that Glassdoor forced those employees to declare that they were currently or formerly employed by the public brand, when they were really employed by the staffing company, so Glassdoor didn’t qualify for Section 230. No, that doesn’t make any sense. My prior blog post.

Worse, the Mississippi court split the case into two. It kept the staffing company’s claims in Mississippi but sent the public brand’s claims to Northern District of California. However, a side benefit: the Northern District of California court took a fresh look at the case. Unsurprisingly, it disagreed with the Mississippi court and concluded that Glassdoor qualifies for Section 230.

The California court says: “Glassdoor cannot be held liable for the mere act of allowing users to publish reviews on its site.” The fact that Glassdoor gathered information from its reviewers via a structured survey doesn’t change the analysis. Cite to Carafano.

That leaves the question of Glassdoor’s potential liability for forcing reviewers to declare they were current/former employees of the public brand when they were only employed by the staffing company. The California court says that Roommates.com doesn’t apply, because “requiring users to identify as current or former employees is not inherently defamatory in the way that requiring users to express discriminatory housing preferences inherently violates of the FHA.” In other words, that Roommates.com exception only applies when a website forces users to submit ONLY “illegal” content (in this case, only defamatory content). (But…if the public brand never had any employees, would that cut against the court’s reasoning?)

The court continues with its Roommates.com distinction:

Even if Glassdoor’s questionnaire forces a user to lie, lying about having worked at a company does not have a natural tendency to injure or cause special damage. Indeed, “[i]n an abundance of caution,” the Roommates court offered examples of similar site-created content that would enjoy Section 230 immunity. One such example was a dating website which required users to enter their own sex, race, or marital status through dropdown menus; the court noted that “[i]t is perfectly legal to discriminate along those lines in dating, and thus there can be no claim based solely on the content of these questions. [T]his immunity is retained even if the website is sued for libel based on these characteristics because the website would not have contributed materially to any alleged defamation.” The same is true in this instance, where discriminating between current and former employees is perfectly legal in the context of reviewing reports about potential employers, and where Glassdoor’s enabling of a reviewer’s self-identification as an employee has not contributed materially to any alleged defamation.

(This is confusing. No one is questioning the legitimacy of distinguishing between current and former employees. The court is trying to say that the reviewers’ lie doesn’t create any harm for readers, but I’m not sure how Roommates.com helps the court reach that conclusion.)

As for the Mississippi court’s reasoning, this judge says “Respectfully, this reasoning does not persuade” because the right precedent is Carafano, not Roommates.com. (How much of Carafano survived Roommates.com?) The court says “Like in that case, here, Glassdoor is “merely a passive conduit” and thus “c[an] not be held liable for failing to detect and remove” the alleged defamation.”” (Insert my standard cringe face whenever a website is called a “passive conduit.”)

Section 230 knocks out both the defamation and tortious interference claims. The court mentions some other problems with the tortious interference claim.

I’m glad to see the court revitalize Section 230’s applicability to a case where it should obviously apply. However, to me, the real problem (as I mentioned in my first blog post) is the alter ego issue. If the only way anyone could work for the public brand was through the staffing company, then the staffing company’s employees should be free to review the public brand even if they were not technically employees. Whether we call their (non-)employment status with the public brand “not a lie” or a “lie without consequence” (the approach the California court seemed to be taking), that solves the defamation claim more cleanly than arcane inquiries into how Glassdoor’s user interface collected third-party information.

Case Citation: Nicholas Services, LLC v. Glassdoor LLC, 2025 WL 240765 (N.D. Cal. Jan. 17, 2025)