What is User Liability in Reputational Damage Control?

When a company employee causes trouble in the course of their duties, the company to which they belong may be held liable for damages under the principle of employer’s liability. For instance, in the case of a traffic accident involving a professional driver, even if the driver’s negligence was the direct cause, the driver’s work schedule or poor working conditions could have contributed to the accident. In such cases, it is only natural that the company employing the driver can be held accountable under the principle of employer’s liability, in addition to the driver themselves.

Even in cases of defamation, while the individual repeatedly engaging in problematic behavior should certainly be held accountable, if they are a company employee, the company that allowed such behavior may also bear responsibility. In such cases, it is possible to hold the company to which the individual belongs accountable under the principle of employer’s liability. In other words, if you are a victim of defamation on the internet and manage to identify the perpetrator through methods such as tracing the post, and the perpetrator turns out to be a salaried worker at a company, it is possible to claim damages not only from the individual perpetrator but also from their employer under the principle of employer’s liability. For more information on how to identify the poster, please refer to the article below.

https://monolith.law/reputation/disclosure-of-the-senders-information[ja]

Next, I would like to explain the conditions that must be met in order to hold a company accountable under the principle of employer’s liability when an employee repeatedly engages in defamation, and such behavior constitutes defamation of personality or invasion of privacy.

https://monolith.law/reputation/scope-of-privacyinfringement[ja]

What is Employer Liability?

There are various legal bases for a company to be held responsible for the actions of its employees, such as violations of the duty of care. However, the basic provision is Article 715 of the Japanese Civil Code.

Article 715 of the Japanese Civil Code

1. A person who employs another for a business is liable for damages caused to a third party by the employee in the execution of the business. However, this does not apply if the employer has exercised due care in the selection and supervision of the employee, or if the damage would have occurred even with due care.
2. A person who supervises the business on behalf of the employer also bears the responsibility of the preceding paragraph.

Why is it that a company, even if it has not committed any illegal acts itself, can be held liable for damages?

The basis for this is the legal principle of “liability for compensation”. This principle states that “those who are profiting should compensate for the losses they have caused to others in the process, to maintain a balance”. In other words, as long as an employer is making a profit from its business activities by employing workers, it should bear the risk of business activities and the losses caused to others by its employees. So, under what specific conditions is employer liability recognized, and when does a company bear liability for damages?

Requirements for Employer Liability

In order for a company to be recognized as having employer liability and to bear damages liability, several requirements must be met.

The Act of the Employee is a Tort

Employer liability is a responsibility for the tort of the employee, so it is necessary that the act of the employee in question itself meets the requirements of a tort. Naturally, if it is not a tort, employer liability will not be questioned.

There is an Employment Relationship

It goes without saying that having an employment relationship is a requirement, but the employment relationship is often based on contracts such as employment, delegation, and others. However, it also includes cases where the employer is merely letting the employee work in practice. In other words, it is considered sufficient if there is a substantial command and supervision relationship between the employer and the employee. For example, even for the tort of a subcontractor, if there is a substantial command and supervision relationship between the subcontractor and the prime contractor, the prime contractor should also bear employer liability.

Furthermore, it is considered acceptable for the employment relationship to be temporary, non-profit, or even illegal. For example, there is a precedent that states, “There is an employer-employee relationship between the top boss of a hierarchically structured gang and the members of the lower organization, in terms of fund-raising activities using the intimidation of the gang” (Supreme Court of Japan, November 12, 2004).

It is Done “In the Execution of Its Business”

“In the execution of its business” includes not only those directly arising from the execution of the employee’s business, but also those that do not belong to the act of executing the employee’s duties themselves, but are recognized as belonging to the act within the scope of the employee’s duties when observed from the external form of the act. There is a precedent that states this (Supreme Court of Japan, November 30, 1965).

What is meant by “In the execution of the business”

Whether or not it falls under “In the execution of the business” is particularly disputed among the requirements of employer liability, but judgments are made based on specific cases.

In the case of sexual harassment by a superior to a female employee at a drinking party outside the workplace after work

Despite being outside the workplace and at a non-compulsory drinking party, there is a precedent where the superior repeatedly sexually harassed while intertwining work talk, and such sexual harassment was considered to be carried out using the position of the superior in relation to the job, and it was considered to be “In the execution of the business” (Supreme Court of Japan, April 12, 1968 (1968)).

In the case of causing a traffic accident by driving a company car for private use without the company’s permission

It cannot be said that a company employee driving a company car for private use without the company’s permission is the proper execution of the company’s business. However, a company car is usually driven within the company’s control area, and even if the company prohibits private driving without permission, it is only an internal problem of the company, and there is a precedent that it was done “In the execution of the business” in appearance (Supreme Court of Japan, December 21, 1971 (1971)).

In the case of assaulting a third party at work and causing injury

In a case where the defendant, who is a carrier called “Koage” in a company that contracts for general handling of seafood at Tsukiji, had a fight with a delivery person over whether to help with the delivery work and injured the delivery person, there is a precedent that “it is recognized that it was done in the process of carrying out the defendant company’s business of handing over fish to wholesalers as a Koage, and therefore, the defendant’s assault in this case should be said to have been done in the execution of his duties as an employee of the defendant company” (Tokyo District Court, January 27, 1994 (1994)).

Employer’s Liability of Caregiving Companies Hiring Caregivers

Let’s take a closer look at cases where damages were sought not only from the defendant but also from the company that employs the defendant for defamation, and the circumstances under which these claims were accepted or rejected. Pay attention to the points that are highlighted when employer’s liability is recognized. There is a case introduced in another article on our site, “Disease Information and Privacy Infringement,” as “the case of an elderly cultural figure with dementia.”

A man in his 90s, a film director, and his family sued a female caregiver and a home-visit caregiving company for damages due to privacy infringement and defamation, claiming that the caregiver had ridiculed the man’s caregiving situation on her blog.

The court ruled that the defendant’s blog post “exposed the plaintiff’s privacy and lowered his social evaluation, causing the plaintiff to suffer mental distress.” The court recognized the privacy infringement and defamation and ordered the female caregiver to pay 1.5 million yen in compensation for emotional distress.

Regarding the caregiving company that employed the woman, the court stated that the first article was posted the day after the defendant visited the plaintiff’s home as a home-visit caregiver for the defendant company, and that the content was “a fact that could be known during the defendant’s business of home-visit caregiving.” The defendant’s actions were “closely related to the execution of the defendant company’s business and should be considered as such.” The company, due to the nature of its confidentiality obligation, should continue to owe the same obligation to the plaintiff even after the contract in this case has been terminated. Therefore, the company was ordered to:

• Bear tort liability (employer’s liability) for privacy infringement and defamation due to the article during the contract
• Bear liability for breach of contract due to the leakage of secrets in the article after dismissal

The court ordered the company to pay a total of 1.3 million yen: 1 million yen for employer’s liability and 300,000 yen for liability for breach of contract.

The court stated:

Considering the current situation where individuals can easily disseminate information on the Internet, home-visit caregiving service providers should sufficiently instruct and supervise their employees to ensure that they do not infringe on the privacy and reputation of their users. However, in the defendant company, no attention was paid to this point regarding the defendant. Therefore, it cannot be recognized that the defendant company took due care in the appointment and supervision of the defendant.

Tokyo District Court, September 4, 2015 (2015)

As indicated in the judgment.

https://monolith.law/reputation/disease-information-and-privacy-infringement[ja]

Employer’s Liability for Employing Company Employees

In this article, we will delve into a case mentioned in another article on our site, “What is the Market Price and Calculation Method for Damages Claims Against Defamation Perpetrators?”. The plaintiff is a freelance system engineer who had a comprehensive business contract with the defendant company and was working as a system manager. The defendant company is a company engaged in the sale, construction, and maintenance of telecommunications equipment, and the defendant was an employee of that company.

The defendant posted on the internet via a mobile phone he contracted, on “2channel”, that “a short man with slicked-back hair” had “entered the women’s restroom with a paper bag” and “Is it okay for the voyeur video of the company’s women’s restroom to be leaked on the internet?” and “What you did is a crime”, clearly indicating the plaintiff, who is 164 cm tall and has slicked-back hair, and defamed him as having committed voyeurism.

The plaintiff, who was pointed out by the company’s executives about the fact of this post and was told that there might not be a contract next term, claimed damages based on tort for almost losing his job, and also argued that the defendant committed the above-mentioned tort during the working hours of the defendant company, and demanded employer’s liability from the defendant company.

The court first stated, “The post in question suggests that the plaintiff is committing the crime of voyeurism, so it is clear that it has lowered the plaintiff’s social evaluation,” and recognized the establishment of defamation by the defendant, ordering the payment of 1 million yen in consolation money, 100,000 yen in attorney’s fees, and 630,000 yen in investigation costs to identify the defendant, for a total of 1.73 million yen.

https://monolith.law/reputation/defamation-and-decline-in-social-reputation[ja]

https://monolith.law/reputation/provider-liability-limitation-law[ja]

On the other hand, regarding the company’s responsibility, the plaintiff argued, “The defendant made the post in question during the working hours of the defendant company, and the defendant company has a duty to consider or supervise its employees, the defendant, so as not to infringe on the rights and interests of third parties, so the defendant company bears employer’s liability. The defendant’s post was made during the defendant company’s business hours, and the defendant company has a rational responsibility to manage the mobile phone used for business,” but,

Among the posts made by the defendant ○○ during his working hours, only the descriptions in numbers 499 and 507 do not constitute a tort against the plaintiff, and at the time of numbers 503 and 504, which pointed out the criminal act, the defendant ○○ was on vacation and was not made during the execution of the defendant company’s duties, and moreover, the posts were not made from a mobile phone lent by the defendant company, but were made from the defendant’s own mobile phone, so the defendant company does not incur employer’s liability.

Tokyo District Court judgment of January 31, 2012 (Gregorian calendar year)

It was stated. To summarize,

1. Posts made during working hours alone do not constitute a tort.
2. The post pointing out the voyeurism was made while on vacation.
3. The post was made not from a mobile phone lent by the defendant company, but from a mobile phone owned by the defendant himself.

In such cases, employer’s liability is not recognized, and the company is not liable for damages.

https://monolith.law/reputation/compensation-for-defamation-damages[ja]

Summary

Employers may be held broadly accountable for the actions of those they employ. To avoid being held liable, it is necessary for employers to consistently monitor and supervise their employees to prevent them from causing harm to third parties. Preventive measures should be taken regularly.