New York Defamation Law: Yelp Alerts Reviewers To Business's "Questionable Legal Threats" In Response To Negative Reviews | Locally Connected

Some New York businesses, including a New York dentist, have been turning to litigation to respond to negative reviews left about their businesses on the popular website, Yelp. 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 three 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 iterated against the plaintiff;
the false statement was published to a third party without privilege or authorization;
the false statement amountsto at least negligence; and
the false statement caused special harm or is 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, as some reviewers choose to remove the negative review or settle out of court to save legal fees and time.

Litigation isn’t the only way some NY businesses have chosen to combat negative online reviews. 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 clauses 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 and some business protections to be put into place at the federal and at the New York state level.