No Slander in Doubting Exec’s Corporate Love

(CN) - Accusing an executive of not liking her employer did not amount to slander, the Guam Supreme Court ruled, finding that "directors of corporations have no legal duty to personally like the corporation or its business interests."

The dispute stems from a statement Matao Yokeno allegedly made on May 13, 2006, one day after Sawako Sekiguchi was elected the vice president and director of Fai Fai Beach Associates.

"Ms. Sekiguchi does not necessarily like Fai Fai Beach," Yokeno allegedly said. "I, Mr. Abe and Joel, we all like Fai Fai Beach. Therefore, because Ms. Sekiguchi does not necessarily like Fai Fai Beach, if it is determined not to be profitable, the beach will be sold off."

After Yokeno sued her over a separate business dispute, Sekiguchi challenged the statement in a counterclaim for slander. Sekiguchi claimed that Yokeno's alleged statement hurt her standing as a company official.

Though Sekiguchi and her co-defendants won summary judgment on Yokeno's claims, the trial court rendered judgment on the pleadings with regard to the slander counterclaim.

The Guam Supreme Court affirmed on Monday.

"Close examination of the duties owed by a corporate director makes clear that Yokeno's statement did not impute to Sekiguchi any disqualification to serve as director," Chief Justice Robert Torres wrote for the court. "First, the statement claimed that Sekiguchi did not like Fai Fai Beach. Directors of corporations have no legal duty to personally like the corporation or its business interests."

Yokeno also did not say Sekiguchi would not try to make the beach profitable, the ruling notes, adding that it would not have been illegal for Sekiguchi to sell Fai Fai Beach over a lack of profit.

Yokeno's alleged statement that Sekiguchi was "probably not thinking about the employees" was also not slanderous, according to the decision.

"Sekiguchi had no legal duty as a director of the corporation to 'think about' employees of Fai Fai Beach - her legal duties as an officer and director are owed to the shareholders of the corporation," Torres wrote.

Justice Katherine Maraman wrote in dissent that the trial court improperly failed to give Yokeno notice before dismissing the complaint, violating her due-process rights.

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