We’re still shaking our heads over a New York hotel’s ridiculous attempt to thwart negative online reviews: by threatening wedding parties with a $500 fine each time one of their guests posted a jab online.
The Union Street Guest House, a boutique hotel in upstate New York, buried this particular clause in the contract clients sign when they rent their facilities for events.
“...There will be a $500 fine that will be deducted from your deposit for every negative review of USGH placed on any internet site by anyone in your party and/or attending your wedding or event,” the policy says.
The hotel has since denied that it was serious about implementing the fine, but it left some consumers wondering if an absurd policy like that is even legal.
Businesses can certainly sue customers who write bad reviews (and win), but they have to at least prove the remarks were either factually incorrect or written maliciously, says Scott Michelman, an attorney with Public Citizen, a consumer rights advocacy group. The idea that a company could impose fines on customers over a bad review that is factually correct and based on a person’s opinion seems unreasonable, not to mention out of the bounds covered by the First Amendment.
“I think under all state contract laws, it would be unenforceable to stick something in fine print that says a customer can’t disparage a business,” Michelman says.
There’s one situation in which there might be an exception: If a customer and the business agreed upfront (with legal representation on both sides) to include a non-disparagement clause in a contract, the business may have legal grounds on which to sue if the other party didn’t hold up their end of the agreement. Even then, the fact that a business would try, by any means, to stop customers from telling others about their service should raise a red flag.
“You have to check the fine print for these nasty clauses,” Michelman says. “That may be a signal to the consumer that this is an unscrupulous business and they might want to think twice about [doing business with them].”
How do you know you’ve gone too far?
You don’t need a law degree to tell when a company like Union Street Guest House has gone too far to protect their reputation. But as more businesses and professionals fight back against consumers who post negative reviews online, it’s helpful to know the difference between what is harmless opinion and what could be grounds for a lawsuit.
Write about your personal experience: After news broke about Union Street’s policy, a lot of people started flooding their Yelp page with one-star reviews. That’s precisely the kind of review that a company could sue over. You can win a lawsuit if a negative review is based on your personal experience, but not if it’s something you heard from a friend or wrote simply to damage their business. “A consumer can always say what the consumer thought,” Michelman says. “It gets a little more dangerous if the consumer says things like, ‘I went to this doctor and this doctor is not board certified.’ If that’s untrue, that’s a factual issue and it could be defamatory,” and that doctor can seek damages.
Stick to the facts: If you hired a contractor to remodel your kitchen and he wound up breaking your stove or blowing a hole through the wrong wall, then by all means, write a review reflecting the shoddy work. But don’t lie about what happened or speculate about what other transgressions he may or may not be guilty of. In February, a Fairfax, Va., jury found a homeowner defamed her contractor when she wrote a pair of scathing reviews of his services, one of which accused him of stealing jewelry during the construction process. In that case, she defamed him by calling him a thief publicly before it was ever proven he stole anything.
Don’t expect those review sites to have your back: Review sites like Yelp have been vocally supportive of their reviewers’ right to free speech. But don’t expect them to pay your legal fees if you’re sued by a business for making alleged defamatory remarks. “We don't take sides when it comes to factual disputes, so we expect you to stand behind your review,” Yelp says in its user guidelines. Fighting a defamation lawsuit can be expensive. Your first line of defense in the case of a lawsuit can be your homeowner’s or renter’s insurance policy, Michelman says. Your policy may include "personal liability" coverage, which would protect you in the event of a libel suit (defamation and slander are both types of libel — defamatory comments are written, while slander is spoken). If it doesn't, you could opt to purchase an inexpensive umbrella policy for libel coverage, the same kind of policy that online bloggers use to protect themselves.
Don’t stop writing reviews: Follow these rules the next time you pen a review of your favorite (or less favorite) restaurant. Just don’t let the threat of a lawsuit stop you from speaking your mind about the service you received, whether good or bad. “Customers should know that just criticizing the business does not create a cause of action,” Michelman says. “It’s actually really helpful when consumers talk to each other. It creates a more efficient and fair marketplace.”
- Company Legal & Law Matters