Today's Question

Today's question comes from a long-time client of mine who granted me permission to post the details of this encounter, because I think it has wide-ranging applications outside of this case. Some of the details will be removed, in the interest of privacy.

"I signed an agreement with a company that contained a 'non-disparagment clause' in the service contract. They have now sent me the attached letter demanding that I remove the bad review of them from Facebook and Google. Is this legal?"

Short Answer

No, it is not legal to include a non-disparagment clause in an initial service contract. The company cannot force you to remove a truthful bad review.

Long Answer

The long answer is that these types of clauses invalidate the contracts in which they are written, meaning the contract is effectively worthless. Therefore, if a company attempts to sue you to enforce a pre-dispute non-disparagment clause and to get you to remove your review, they will likely lose. Further, because the contract itself is void as a matter of law, you may even have a claim to get any money you paid back.

Non-Disparagment Clauses, Generally

Non-disparagment clauses have long been a feature of settlement agreements and are enforceable when two parties have had a dispute as an attempt to prevent some further, continuing dispute. Generally speaking, they are usually enforceable, because courts assume that there was a good reason both parties agreed to not continue to throw dirt at each other after the matter is settled.

However, it's important to note that this has traditionally been the role of non-disparagement clauses.

With the increasing availability of, popularity of, and reliance on online reviews by customers, many companies have been somewhat aggressive in protecting their online reputations. While most steps to protect online reputation are legal and even wise, some started crossing the line and began including non-disparagment clauses in the initial contracts, long before the customer knew how good (or bad) the product or service would be.

Consumer Review Fairness Act

Congress sought to get ahead of this issue and passed the Consumer Review Fairness Act in 2016. This law, which applies across the US, invalidates any initial contract that has a restriction on a customer's right to truthfully review a company's performance. Further, the Act provides for both the FTC and state Attorney Generals to pursue violations of the Act as criminal actions. Unfortunately, though, no private right of action (your individual right to sue the company) is included in the language of the Act.

That said, the Act invalidates the underlying contract, which means it is as if the contract was never signed. If a company is trying to enforce one of these provisions against you, you might be able to get your money back. You would need to consult with an attorney to see how likely this might be in your case, however.

What this doesn't include

The CRFA does not include any non-disparagment agreements that are included in a settlement agreement after a dispute arises. It also doesn't apply to negotiated, non-form contracts. It also won't protect you if your review includes false information or knowing exaggerations of what actually occurred.

Bottom Line

As long as your review is truthful, there is little a company can do to make you remove a bad review. If they continue to push the issue, speak with an attorney.

If you have been threatened with a company that is trying to get you to remove a truthful review that you left online, we can help. Give us a call at 205-545-7278 or complete the form on the side of this page.

 

Major H/T to Chad Murray at chadtalkslaw.com for a significant consumer law brief.