Can Your Business Prevent Negative Reviews with a Contract?

Sites like Yelp, Trip Advisor and Google reviews are easy to use, and they help consumers leave reviews for the products and services companies provide. From the consumer perspective, reviews are beneficial in deciding which products to purchase and which businesses to hire. However, from a company’s perspective, bad reviews can be very harmful, especially if the reviews are false.  But is there a way business can use a contract to prevent negative reviews?

In 2016, Congress passed the Consumer Review Fairness Act (the Act) which helps protect consumers’ ability to share their opinions about a business’ products, services, quality, customer service and conduct. This Act specifically prevents companies from including provisions in certain contracts that allow them to sue consumers for posting negative reviews on social media. In addition, a company cannot impose a penalty or fee on an individual that publishes a review.

What types of contracts does this Act apply to?

This Act applies to most contracts including service agreements and sales contracts. However, the Act does not apply to employment contracts or independent contractor contracts. A company may restrict reviews that a current or former employee and independent contractor are allowed to post.

Is there anything a company can prevent a consumer from posting about?

Through a contract, a company may prevent a customer from publishing a review that contains confidential or private information, including financial and medical information, or a company’s trade secrets. Additionally, a company may prohibit and remove a review that is libelous, abusive, obscene, or sexually explicit. A company may also remove reviews that are clearly false or misleading. However, it is very difficult to determine whether a review is an opinion or reaches the level of a false or misleading statement. Therefore, unless the review contains private information or offensive material, a business likely cannot remove the review.  

What happens to a company that violates the Consumer Review Fairness Act?

A company that violates the Act may be subject to financial penalties or a federal court order prohibiting their restraint on customer reviews. Repeated violations of the Act may lead to more severe fines or penalties. A business lawyer can help review your contracts and ensure compliance with the Consumer Review Fairness Act.

 

If you’d like more information on business contracts and non-disparagement clauses, feel free to reach out to us at 720-999-5517. We’re happy to help.