Mattel acquires legal headache
When Mattel acquired the Learning Company last week, it also inherited a libel action the smaller company filed against a former employee who criticized its employment practices.
The Learning Company filed the charges against Bill Silverstein after his Web site accused Microsystems Software, which the Learning Company acquired, of violating labor laws. Silverstein's allegations are part of a workers' compensation lawsuit he filed against the company after the software programmer said he sought treatment for tendinitis, a painful condition caused by repetitive tasks such as typing.
The site contains copies of court documents, as well as a detailed timeline setting out Silverstein's side of the dispute. Among the allegations is that Microsystems fired Silverstein because of his workplace injuries in violation of federal law. Last December, shortly after the Learning Company acquired Microsystems, the companies countersued Silverstein, alleging his site was libelous.
"Through the published statements about them contained in Silverstein's Web site, [the companies] have been exposed to public hatred, ridicule, or contempt in a considerable and respectable class in the community," a copy of the countersuit posted on Silverstein's site alleged. "These statements have been made and published recklessly or with actual malice."
For his part, Silverstein said that when he asked executives at the Learning Company to point out what on his Web site was false, he got no response.
"Everything [on the Web site] is true," he said. "The only reason they've filed this countersuit is to try to intimidate me."
A spokesman at Mattel declined to comment on the pending litigation. The El Segundo, California, toy maker last week completed its $3.6 billion acquisition of the Learning Company as it tries to expand its business into entertainment software and e-commerce.
Neil Shapiro, a media attorney at Landels, Ripley & Diamond, said Mattel is likely to face an uphill battle in proving its case, because the Learning Company is considered a public figure for purposes of libel law.
"If one assumes that the company is a public figure, they have to prove not only that [Silverstein] was wrong, but that he essentially doesn't believe what he's saying," Shapiro said. Generally, public figures suing for libel must prove that the defendant acted maliciously.
The case, being heard in Massachusetts state court in Middlesex County, is now in discovery.
Silverstein is just one of many individuals who have used the Net to voice grievances with large companies. Intel and Raytheon also have recently been targets of criticism on the Net.
"The Net makes everybody a publisher whether they have any money or not," Shapiro said. "It's going to be interesting to watch the law adapt."