Can a Business Stop Customers From Posting Negative Reviews?

Can a Business Stop Customers From Posting Negative Reviews?

Negative Reviews: Can they be stopped?

Negative Reviews are a common problem for online businesses. Instead of contacting the business, today’s disgruntled customer is more likely to post a negative review on Yelp, flame a Facebook page or tweet their dissatisfaction. Social media and online review sites have given consumers an immediate outlet and ready audience to express their opinions.  Frustrated businesses who would prefer to deal with customer issues outside a public spotlight or in a less public way have taken various approaches to maintaining their online reputation.

How to stop negative reviews

Some businesses have inserted non-disparagement clauses in their contracts with the intent to prevent or limit public criticism.  Others have attempted to claim an assignment of copyright in any future review or post written about the business – as the ‘owner’ of the copyright, the business is then presumably able to control distribution of the message and use copyright laws to force an internet review site to take down any less than complimentary review.

The Law and Negative Reviews

New Law Passed – Consumer Review Fairness Act

In December 2016, Congress addressed these issues by passing the Consumer Review Fairness Act of 2016 which makes provisions of ‘form-contracts’ void if they

  1. prohibit or restrict written, oral, or pictorial reviews
  2. impose a penalty for posting reviews or
  3. transfers the intellectual property rights in any review. See full text of the Consumer Review Fairness Act of 2016 (H.R. 5111) below.

First there are exceptions to the new Consumer Review Fairness Act law.

  • The Consumer Review and Fairness Act applies to ‘form-contracts’ – which is defined as standardized terms used in the course of selling goods or services without a meaningful opportunity to negotiate.  In other words, pre-printed terms on the back of a receipt wont cut it.
  • However, the law excludes other types of contracts that are negotiated. Specifically, the Consumer Review Fairness Act excludes employer-employee agreements and independent contractor contracts.

Also, businesses should formulate sound approaches to managing online reviews, combating fake reviews and improving customer relations

  • Positive review responses are just as important as negative review responses to convey that the business is active and engaged with its customer base.
  • All business owners should read and be familiar with Yelp review guidelines.
  • Negative reviews don’t necessarily have to hurt a business if it has a robust online reputation management strategy in place. A handful of negative reviews may be drowned out by positive PR and active engagement.

Consumer Review Fairness Act of 2016 – Summary

(Sec. 2) This bill makes a provision of a form contract void from the inception if it:

  1. prohibits or restricts an individual who is a party to such a contract from engaging in written, oral, or pictorial reviews, or other similar performance assessments or analyses of, including by electronic means, the goods, services, or conduct of a person that is also a party to the contract;
  2. imposes penalties or fees against individuals who engage in such communications; or
  3. transfers or requires the individual to transfer intellectual property rights in review or feedback content (with the exception of a nonexclusive license to use the content) in any otherwise lawful communications about such person or the goods or services provided by such person.

A “form contract" is a contract with standardized terms:

  1. used by a person in the course of selling or leasing the person’s goods or services, and
  2. imposed on an individual without a meaningful opportunity to negotiate the standardized terms.The definition excludes an employer-employee or independent contractor contract.

The standards under which provisions of a form contract are considered void under this bill shall not be construed to affect:

  • legal duties of confidentiality;
  • civil actions for defamation, libel, or slander; or
  • a party’s right to establish terms and conditions for the creation of photographs or video of such party’s property when those photographs or video are created by an employee or independent contractor of a commercial entity and are solely intended to be used for commercial purposes by that entity.

Such standards also shall not be construed to affect any party’s right to remove or refuse to display publicly on an Internet website or webpage owned, operated, or controlled by such party content that:

  1. contains the personal information or likeness of another person or is libelous, harassing, abusive, obscene, vulgar, sexually explicit, inappropriate with respect to race, gender, sexuality, ethnicity, or other intrinsic characteristic;
  2. is unrelated to the goods or services offered by or available at such party’s website; or
  3. is clearly false or misleading.

A provision shall not be considered void under this bill to the extent that it prohibits disclosure or submission of, or reserves the right of a person or business that hosts online consumer reviews or comments to remove, certain:

  1. trade secrets or commercial or financial information;
  2. personnel and medical files;
  3. law enforcement records;
  4. content that is unlawful or that a party has a right to remove or refuse to display; or
  5. computer viruses or other potentially damaging computer code, processes, applications, or files.

A person is prohibited from offering form contracts containing a provision that is considered void under this bill. Enforcement authority is provided to the Federal Trade Commission (FTC) and states.  The FTC must provide businesses with nonbinding best practices for compliance.  Nothing in this bill shall be construed to limit, impair, or supersede the Federal Trade Commission Act or any other federal law.

Bottom Line for Negative Reviews

 Businesses should employ a robust customer service approach to promote good reviews that can drown out sour notes. Businesses should also have a business lawyer review the terms of their business contracts, employment agreements and independent contractor contracts to ensure they contain the maximum wording permitted by law to protect the business from Negative Reviews.

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