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Former LivingSocial Employee Doesn’t Have Grounds For Libel Case

livingsocial, merchant services, daily deal mediaA federal judge has ruled that LivingSocial should not face libel claims filed by one the company’s former marketing consultants, Wendy Murphy.

LivingSocial hired Murphy in 2010 as a marketing consultant for the company’s daily deal website. Murphy went on to work for the website until she resigned in March of 2012. Upon her resignation notice LivingSocial’s head of litigation, Seth Brown, sent Murphy a letter reminding her of the daily deal site’s non-compete agreement she signed at the beginning of her employment.

In addition, the letter also informed Murphy that she was under suspicion of sharing private information with vacation daily deal site Travelzoo, a direct competitor of LivingSocial, which resulted in the site considering taking legal action against her. Brown also brought Travelzoo up to speed, letting them know of Brown’s non-compete agreement.

Murphy filed a lawsuit in Illinois for breach of contract, violation of Illinois Wage Payment and Collection Act, and libel five days after Brown sent the letter, which was later transferred to Washington D.C., where LivingSocial is headquartered.

U.S. District Judge Emmet Sullivan supported the venue transfer Monday, ruling that the choice-of-law clause in Murphy’s employment contract is reasonable given LivingSocial’s headquarters in the district. The choice-of-law clause additionally applies to Murphy’s libel claim because it is “inextricably intertwined with, and arises out of, plaintiff’s employment with LivingSocial,” according to the ruling.

After establishing proper jurisdiction, Emmet dismissed the libel claim against Brown.

“The court finds that the statements in the letter indicate that litigation was under serious consideration,” Sullivan wrote. “Furthermore, the statements in the letter bear a clear relationship to the dispute because they defined the nature of the dispute. Accordingly, the court finds that the Travelzoo Letter is protected by the judicial proceedings privilege.”

Murphy granted LivingSocial permission to let the terms of the non-compete agreement be known to prospective employers, the court found.

 “The statements made in the letter, alleging plaintiff had violated the restrictive covenants of the non-compete agreement, were directly relevant to the purpose for which consent was given,” Emmet wrote. “Finally, the publication of the statement was limited to Travelzoo’s human resources director, who had a legitimate interest in the content of the statements. Accordingly, the letter is protected by the privilege of consent, and plaintiff’s claim fails.”

Murphy’s other charges against LivingSocial are still pending.

Source: Courthouse News Service

Megan Bildner

Megan is currently the Jr. Editor of the Daily Deal Media and Digital MI sites with Mogul Media. Here, she is responsible for the site's content and publication. Along with these tasks, Megan also engages with the DDM & DMI audience through social pages/groups/tweets. When she is not working on the DDM & DMI sites Megan enjoys tweeting, traveling, snowboarding, hiking, and socializing with her friends. She grew up in Michigan's Clarkston and Lake Orion and loves being on the lake, boating, and wake-boarding. You can follow her @MeganBildner or e-mail her at
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