Yelp is a website that crowd-sources recommendations and reviews of local businesses. Many businesses see an increase in business activity based upon positive reviews and recommendations left on the website, while others believe that their business good-will and reputation are harmed by negative reviews that may or may not be accurate.
Buzzfeed recounts the story of a New York dentist that has sued at least 3 negative reviewers for speaking their mind about the services provided by this business. The increase in such activity has led Yelp to alert reviewers to businesses who make, in Yelp's words, "questionable legal threats" against reviewers speaking their mind. The story also states that Congress is currently considering bills designed to protect consumers from such lawsuits based upon negative reviews posted online.
The basis of many of these lawsuits seem to be based on a theory of defamation. The legal elements of defamation in New York are:
- a false statement;
- published to a third party without privilege or authorization;
- with fault amounting to at least negligence;
- that caused special harm or defamation per se.
In New York, truth is an "absolute defense" to a claim of defamation. However, the costs of hiring an attorney and defending such a lawsuit has a chilling effect on these matters, as some reviewers choose to remove the negative review or settle out of court to save money and time.
Litigation isn't the only way some businesses have chosen to combat negative online reivews. Businesses may attempt to stop negative publicity on sites like Yelp by including "gag" clauses into contracts for services provided to customers whereby the consumer gives up their ability to publicly criticize the business upon execution of the agreement. Some companies' contracts include a clause prohibiting consumers from saying anything at all about the company and its services. California and Maryland already prohibit "gag" clauses in contracts.
As this is a developing legal issue, we expect consumer protections to be put into place at the federal and state levels, and highly recommend - whether you are a business or a customer - to consult with an attorney when it comes to all issues concerning defamation._____
*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.
Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.