GOTCHA! Post A Negative Review and Get Sued!

ARE YOU KIDDING ME??

A developing legal and ethical issue in emerging media is whether a business has the right to sue and win in court against a consumer who received what they believe was poor service or a bad product and posted a negative review.

Simply do a Google search with this or a similar phrase and many stories immediately pop up: “businesses sue over negative social media posts.”

“One consumer who was angry over what she thought was poor work on her home logged onto Yelp and posted negative reviews about the firm that did the work, including claims that some of her jewelry was missing.  The contractor filed a $750,000 Internet defamation lawsuit against the consumer saying the postings on Yelp and Angie’s List were false the court for a preliminary injunction to keep her from writing similar reviews.” (outsidethebeltway.com 2014)

“Lawyers say it is one of a growing number of defamation lawsuits over online reviews on sites such as Yelp, Angie’s List and Trip-Advisor and over Internet postings in general. They say the freewheeling and acerbic world of Web speech is colliding with the ever-growing importance of online reputations for businesses, doctors, restaurants, even teachers. No one keeps track of how many suits are filed over online reviews, and lawyers say the numbers are still small but are getting larger.” (outsidethebeltway.com 2014)

In another case, “Hotel Quebec sued a former guest for $95,000. The reason? The guest wrote a negative review on TripAdvisor exposing the bed bugs in his room and refused to remove the review.”

 “Lawyers say such cases are a cautionary tale for a new era: Those who feel targeted by defamation on the Web are more likely to file suit, and judges and juries are more likely to take such claims seriously than in years past, raising the legal stakes over vitriolic reviews, nasty blog comments and Facebook feuds.” (outsidethebeltway.com 2014)

The following analysis is from (blankrome.com 2014)Many dentists, wedding photographers, moving companies, locksmiths and online retailers have each tried to limit negative online customer reviews via nondisparagement clauses in their service agreements.”

Traditionally found in negotiated settlement or employee severance agreements, nondisparagement (or "no review") clauses are now making their way into non-negotiated service contracts and the oft-ignored terms and conditions of online retailers. So the question becomes: Are nondisparagement clauses the wave of the future, or simply the next battleground in the war for online consumer rights?

In its simplest form, a nondisparagement clause seeks to prevent a customer or receiver of goods or services from posting negative reviews about a service provider or vendor by outlining the financial repercussions for any violation.

The impetus behind companies inserting these clauses is the popularity of review sites like Yelp.com, RipoffReport.com, Dine.com, TripAdvisor.com and Amazon.com—coupled with the increasing number of people turning to such sites in choosing which companies to do business with. Because a poor review can be financially devastating, businesses want to prevent clients from bad-mouthing them—even if the criticism is true.

Still, the first issue regarding any non-negotiable, nondisparagement clause is whether it is enforceable. According to University of California, Los Angeles constitutional law professor Eugene Volokh in a Wall Street Journal article titled, "You Ruined My Wedding—And You're Suing Me?" the answer, not surprisingly, is: It depends.

As a general rule, items agreed to in a contract are enforceable. But the "gotcha factor" is critical, Volokh told The Wall Street Journal. If a reasonable consumer would be very surprised by a clause in a vendor contract or a terms of service agreement, that provision may be deemed unenforceable. "You could see some of these [nondisparagement clauses] invalidated," Volokh said. "This will be decided on a state-by-state level."

Consumers should be careful when reading a non-negotiable service agreement, so as to be aware of any nondisparagement or similar clauses. This is especially true when dealing with an online retailer's terms of service—which may be separate from the specific contractual provisions.

Businesses can also take steps to ensure their reputations are protected without impugning free speech. According to one commentator, a more defensible approach is to require a consumer to take their complaint to the company before posting anything online; in exchange, the consumer receives a coupon (or other item of value). This approach would not ban comments indefinitely.

But even setting aside the legal issues, public perception of companies using nondisparagement clauses may also be worth considering. Such clauses may send the message a company does not stand behind its work, or is overly concerned with bad press. While a few negative reviews may be the cost of doing business, the overall impact will be negated by more positive reviews.

As businesses continue to take concerted steps to protect their online reputations, and consumers continue to post online, this area of law is likely to develop. The introduction of pro-consumer legislation will only quicken the pace. But until then, the battle for online consumer rights carries on.(blankrome.com 2014)