"With hair on your chest, you shouldn't be wearing a dress."
"You look like an idiot."
That's what Sam Johnson, the former CEO of telehealth company VisuWell, allegedly said while harassing and berating a teenage boy who chose to wear a dress to his high school prom. The confrontation happened at a hotel where the teen and his friends were taking prom pictures.
A video of the incident went viral, capturing Johnson's remarks. The backlash was immediate, and VisuWell's board quickly started worrying about the company's reputation.
At the time, University Hospitals—VisuWell's biggest customer—was flooded with messages from people upset about its employment of Johnson. UH did what any reasonable business would do: it reached out to VisuWell to express concern and ask how the company planned to handle the situation. Shortly after, VisuWell placed Johnson on administrative leave and ultimately fired him.
Johnson sued UH, claiming it tortiously interfered with his employment contract and business relationships. The Sixth Circuit wasn't buying it. The court affirmed the dismissal of Johnson's lawsuit, ruling that he failed to show UH acted with an improper motive or means. Instead, UH's actions were based on legitimate business concerns—namely, protecting its own reputation.
The takeaway? In today's digital world, companies can't afford to ignore the reputational risks tied to their key people or key relationships. The Sixth Circuit's decision in Johnson v. University Hospitals Health System is a reminder that reputations matter, and how a company reacts to controversy can be just as important as the controversy itself. UH handled it the right way, and the law was on its side.