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Why are online reviewers being sued by businesses?

These days anyone considering hiring a particular business, shopping at certain store or eating at a local restaurant can make an informed decision with just a few keystrokes. That's because there are a multitude of websites supplying both crowd-sourced reviews and overall ratings.

While those who post to these types of websites understandably believe that they are performing a public service by helping promote good establishments and alerting people to potentially problematic ones, reports indicate that a growing number are actually being sued for posting negative reviews.

By way of example, consider a recent case in Dallas involving a couple who retained the services of a local pet sitter to watch their fish and their two dogs.

After being provided with services they believed to be substandard -- cloudy aquarium water, billing errors, failure to leave the provided key, etc. -- the couple took their dissatisfaction to the extremely popular website Yelp, giving the pet sitter a one-star rating.  

Shortly thereafter, the couple was hit with a lawsuit accusing them of causing the pet sitter "irreparable and continued... libelous and slanderous harm," and seeking over $6,700 in damages.

The crux of the lawsuit is that the couple violated the non-disparagement clause contained within the service contract they signed (but didn’t read), and which stated that they were prohibited from engaging in actions that had a negative impact on the business.

As you might imagine, these lawsuits have raised real concerns among legal experts as to whether these non-disparagement clauses violate people's right to free speech.

Indeed, the state of California has actually enacted a law making these contractual clauses invalid, while U.S. Senator John Thune (R-SD) has co-sponsored legislation called the "Consumer Review Freedom Act," which would essentially accomplish the same objective. To date, it's passed the Senate and is currently awaiting a vote before the House of Representatives.

It will be interesting to see whether the Consumer Review Freedom Act garners the necessary votes and, until then, whether news of these lawsuits will dissuade people from posting negative online reviews.

Stay tuned for updates ...

If you have concerns relating to business litigation or any questions concerning a business law matter, please consider speaking with an experienced legal professional who can supply the answers you need.  

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Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

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