Legal Updates

Recent US Court case Zuru v Glassdoor serves as wake up call for New Zealand Employers

The California-based website Glassdoor Incorporated (“Glassdoor”) recently lost a case brought against it by New Zealand-based company ZURU Toys New Zealand Limited (“Zuru”). Personal information surrounding anonymous reviews must now be released from Glassdoor to Zuru to allow them to pursue a defamation claim against suspected present and past employees who expressed their resentment of the company online.



Glassdoor is a US-based website where current and former employees anonymously review their employers across the world. Glassdoor enables users to gain insight into salary information, potential interview questions, and a company’s culture.


Much to Zuru’s dismay, six scathing reviews were left on the Glassdoor website describing Zuru as a “burn out factory” with a “toxic work culture” where employees are treated like “dirt”. Zuru claimed these reviews were false and set out to sue the reviewers for defamation. However, the anonymity of reviewers on Glassdoor turned out to be quite the hurdle.


Zuru applied to the District Court in California calling for Glassdoor to release the details of those who wrote the negative reviews and how many people viewed the comments. This was not the first time Glassdoor had fought a case involving defamation, and claims to have succeeded in protecting the anonymity of their users in more than 100 other cases.



The US Court ruled that New Zealand’s defamation laws will apply and ordered that Glassdoor supply Zuru with the identifying information. Glassdoor is now legally required to reveal to Zuru who wrote the negative reviews.


Ultimately, the US Court found that because the Zuru employees who left the reviews were most likely New Zealand citizens, they not could not rely on the liberal free speech protections preserved in the first amendment of the US Constitution to protect their identity.  Zuru had established that it has a plausible defamation claim against the proposed defendants, and was entitled to have the information held by Glassdoor that could establish its claim.


The Court’s ruling could be a big blow for Glassdoor’s billion dollar business which relies on global users logging on to leave honest reviews of over 2 millions companies. It will now be a matter for New Zealand courts to determine the fate of the reviewers, if Zuru follows through with its intention to initiate defamation proceedings.


What does this mean for New Zealand employers?

Employers tend to focus on a client’s experience with their company and the word of mouth effects that follow online and in person. However, an employee’s review can often leave an even bigger dent in a company’s reputation than a disgruntled client ever could. This case should serve as a wakeup call for employers who have failed to consider the implications that employee activity on social media may have on their business.


Bad reviews can be detrimental, particularly for a small business. Zuru’s statement to the Court claimed that the negative reviews employees left on Glassdoor caused the company great monetary loss. Specifically, Zuru’s co-founders expressed that Zuru “has had to expend money, time, and resources in combatting the negative publicity, negative perception and harm to Zuru’s reputation that the reviews have caused”.


Whilst companies arguably have a right to defend their reputation, employers cannot monitor their employee’s social media. Defamation proceedings are not the most effective way to deal with these circumstances given they are often costly, revealing, and the negative conduct has already occurred. They can however, proactively implement a social media policy which outlines how the company and its employees are required to conduct themselves online, and set out clear consequences should an employee breach that policy.


A robust social media policy can protect both employees and employers from online harm by preventing and prohibiting certain online behaviour. Such conduct may include offensive posts intending to harm someone’s reputation or posts that will contribute to a hostile work environment.


By having a clear and succinct policy available to all employees, employers can save themselves a significant amount of time and grief when it comes to social media use in and out of the workplace.


If you require assistance drafting a social media policy or need employment advice, contact Jaesen or Caylee.