Glassdoor Denied Section 230 Immunity for Reviews from Non-Employees–Nicholas Air v. Glassdoor
This is a confusing case with the troubling outcome that Glassdoor could be liable for third-party reviews despite Section 230.
The case is confusing in part because it involves two companies that seem like they are alter egos of each other (the court describes them as “closely related”). “Nicholas Air acts as the brand, and Corr Flight employs ‘all employees who perform duties for the Nicholas Air brand.'” Indeed, in this litigation, Nicholas Air’s in-house legal counsel also represents Corr Flight. Even the court has difficulties keeping the two entities straight, repeatedly referring to “Nico” (NIcholas/COrr) when it should be keeping each entity separate.
Nicholas Air complained about the reviews to Glassdoor, and in the process had to agree to a forum selection clause. Corr Flight didn’t agree to the same clause. The court enforces the arbitration clause against Nicholas Air, sending their claims to the Northern District of California, while Corr Flight’s claims remain in Mississippi. This Solomonic outcome splits the case in two and largely doubles the litigation costs for both sides. I can’t imagine either side is thrilled about that.
The gist of the case is that Corr employees posted (negative) Glassdoor reviews on the Nicholas Air page, even though Nicholas Air doesn’t employ them. While the court may be technically correct about this distinction, given their alter ego status, does it really affect the audience’s understanding? In other words, if prospective employees investigating Nicholas Air see unhappy Corr employees–the only way that the prospective employees could ever work for Nicholas Air–the reviews seem useful and accurate.
The court instead says there could be defamation here:
While a false assertion that someone is an employee of a company is unlikely to be defamatory on its own, a false assertion that someone who has said something negative about a company is an employee of that company could be. A negative statement concerning the working conditions or environment of a company carries more weight when coming from an employee than from a third party.
Even if these statements are true, the application to these facts is nonsensical given the alter ego problem.
The court turns to the Section 230 issue. After reviewing a number of old cases, the court summarizes: “for a website’s actions to render them an information content provider thereby removing them from the protection of §230, the website must either take a creational step that, when viewed alone without third party input, is actionable, or it must force its users to take such a step—encouragement alone is not enough.” This appears to be a unhelpful rearticulation of the Roommates.com holding, which said “If you don’t encourage illegal content, or design your website to require users to input illegal content, you will be immune.”
In a footnote, the court betrays its normative bias:
The Court can imagine a situation where, through a combination of encouragement and selective publication, a website plays such a significant creational role that it renders itself an information content provider of the selected third-party content. If a website encourages users to submit false and harmful information, and then selectively publishes as true the submissions calculated to do the most harm, they should not be protected by § 230. The near infinite third-party generated content some websites have access to today means they can effectively speak for themselves by cherry-picking and amplifying whatever message they choose. Good sense and a desire to not only encourage truth, but preserve the republic, should inspire courts and policy makers to read § 230 in light of the goals for which it was originally intended (i.e. promoting free speech, a free market, and unfettered political discourse) rather than use it to shield reckless and destructive spiel posing as user-conversation on the internet.
What does any of this have to do with this case? In particular, where is the “reckless and destructive spiel posing as user-conversation on the internet” that the court is referring to? As far as I can tell, Nicholas Air isn’t disputing the veracity of the user reviews; it’s only disputing that the reviews came from Corr Flight employees working under the Nicholas Air brand. This free association dicta reveals a deep anti-UGC bias that unfortunately taints the ruling.
Back to the legal standard. The court says Glassdoor forced Corr Flight employees to misdeclare as Nicholas Air employees to leave a review, and that’s analogous enough to requiring users to input illegal content per Roommates.com. The court says: “by forcing users to state they are (or were) employees and giving them no other options, Glassdoor is effectively making the employee-statement themselves.” Thus, Glassdoor can’t claim Section 230 for Glassdoor’s characterization that the reviewers are Nicholas Air employees, even though that characterization is based on the third-party content provided to it by reviewers.
In theory, Glassdoor could correct this by offering a third option for reviewer classifications: (1) current employee, (2) former employee, and (3) not an employee. I bet many Corr Flights employees would have still picked #1 or #2, even if #3 had been an option. However, the third option doesn’t really help. Glassdoor doesn’t want reviews from non-employees, so any reviews submitted from them would be discarded. Knowing that, non-employees would lie and choose a different status. Now what?
For now, this opinion suggests that Glassdoor could be on the hook for all fake reviews submitted by non-employees–a potentially significant and unmanageable risk. Glassdoor has to prevent that outcome at almost any cost. (Indeed, because the court transferred the case against Nicholas Air to NDCal, I believe the Section 230 ruling only applied to Corr Flight’s claims, and Glassdoor might reraise the 230 defense against Nicholas Air in CA).
I say the risk is unmanageable because Glassdoor has few effective ways to authenticate the status of former employees. Perhaps current employees could be authenticated by their email addresses (though if the employer is monitoring the email system, that would risk non-attributability). But how can Glassdoor authenticate former employee status? I guess through highly invasive privacy disclosures, like submitting a W-2 from the employer, but that will require expensive manual review, will discourage submissions due to the privacy and security risk, and will create attributability that will further discourage submissions.
A bummer ruling that I hope will get fixed in further proceedings.
Case Citation: Nicholas Services, LLC v. Glassdoor, LLC, 2024 WL 3898345 (N.D. Miss. Aug. 21, 2024). The complaint. The reviews. The NDA.
Prior Posts on Glassdoor