Biz Owners Beware: Free Speech on Yelp Is about to Get Freer

Attorneys weigh in on what a new bill eliminating gag clauses would mean for you.
A new law would prevent companies from using gag orders to stifle negative online reviews. (Photo: Maksim Kabakou/Shutterstock)

Customers have always been free to post bad reviews of restaurants, retail stores, contractors and other businesses on sites such as Yelp — with a catch.


“It’s a win for free speech. For years, businesses used this practice to intimidate customers, rivals and others from expressing negative opinions about them.” -Mark Grabowski (Photo: Mark Grabowski)

“Sometimes businesses will add fine print to contracts that prohibits customers from posting negative reviews about them and, moreover, gives the business the right to sue for damages if the customer disobeys,” said Mark Grabowski, internet law professor at Adelphi University in New York.

But those days may soon be over. A new law, the Consumer Review Fairness Act of 2016, “effectively ends that practice,” said Grabowski. The House and Senate both passed the act. It is now headed for President Obama’s desk.

“It’s a win for free speech,” said Grabowski. “For years, businesses used this practice to intimidate customers, rivals and others from expressing negative opinions about them. Finally, the law has caught up with technology on this issue.”

Said Senate Commerce Chairman John Thune in a statement, “By ending gag clauses, this legislation supports consumer rights and the integrity of critical feedback about products and services sold online.”

The law would apply to Yelp, TripAdvisor, Angie’s List and any other website that hosts consumer reviews. “It applies to all businesses in ‘interstate commerce,’ which means just about everybody,” said Samuel Ventola, a First Amendment expert and free speech attorney. He noted that most of the provisions would go into effect 90 days after enactment.

Where the law leaves business owners

Braden Perry, a litigation, regulatory and government investigations attorney with Kennyhertz Perry, LLC, said the law wouldn’t completely take away an owner’s right to sue.


The new law will not completely prevent business from suing because they will still have protection from libel, says Braden Perry, an attorney with Kennyhertz Perry, LLC. (Photo: Braden Perry)

“The FTC will be the main watchdog in this area and will likely draft guidance and rules on the details regarding these prohibitions and the extent companies can protect themselves from a negative review. A blanket prohibition will be violative of the Act, but it leaves a company’s right to sue for defamation intact on a case-by-case basis.”

Businesses would still have protection against libel (a form of defamation), Grabowski agreed.

“The new federal law only bars merchants or service providers from compelling consumers to sign away their First Amendment rights via non-disparagement clauses. Businesses remain protected against libel. Indeed, the legislation specifically states that this new law does not void libel laws.

“But keep in mind that just because a review is negative or hurts your feelings or you disagree with it doesn’t make it libelous. Libel cases are very difficult to win and, in most cases, aren’t worth the litigation costs.”

Noted Ventola, “A consumer review is libelous if it is false, and not merely opinion. ‘Your business is terrible’ is an expression of opinion, and not actionable. However, if the review recites facts indicating the reviewer was a customer and has special knowledge of the product or service, or if it makes specific factual claims, then the review may be defamatory.”

How to respond to a libelous review

Grabowski offered this advice in the event a customer posts a review you think is libelous:

“Contact the website where the libelous review is posted, explain why you believe it’s libelous and ask for it to be removed. Many review sites will remove such posts. If you know the identity of the reviewer, you could request they remove the bad review or you’ll sue, but that might blow up in a business’s face.”

“Instead, I’d recommend some old-fashioned diplomacy. Apologize for the bad experience and offer the customer a free meal or something like that — if the bad review is deleted. Yeah, you have to swallow your pride in a situation where the customer is in the wrong, but, even if you’re sure you’ll win in court, litigating a case like this is rarely worth the trouble for a business. And it might bring with it a lot of negative publicity that could hurt your business in the court of public opinion.”

Handling garden-variety negative reviews

Negative reviews can be poisonous to business, but depending on whom you ask, not all of them require a response.

“If you have an occasional bad comment, you have to remember that you can’t please everyone,” said Karen Fischer, partner of RK Fischer and Associates, a business coaching and consulting firm in Toronto. Focus instead on reviews that lob a specific criticism.

Then respond fast. “Ignoring someone is worse than taking the brunt of what you have done wrong, admitting it and looking to correct it,” said Fischer.
Thank the customer for the comment and explain that you value his or her feedback and will work to fix the issue.

Of course, offering superior customer service can help you avoid negative reviews in the first place.

To outweigh any negative reviews, actively court positive ones. Come out and ask your best customers to put in a good word. Many will be happy to oblige.

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