Dealing With Negative Online Reviews

Podcast Episode 6—Negative Online Reviews of Your Business, and What Can be Done

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Podcast Episode Timestamps

00:00 — Topic
00:30 — Online reviews are important
01:42 — Overview of the governing law
03:18 — Two important Texas statutes
03:47 — DMA’s requirement for letter demanding correction or retraction
04:55 — The TCPA
05:20 — Contractual contexts of note
06:24 — Angie’s List
07:01 — The main takeaway of the episode
07:55 — Where the podcast episode and related blog post can be found
08:36 — If you have a question for me
08:53 — Outro

The Situation

It’s common for many businesses to live and die by their online reviews. If you do enough business, there’s a chance you will eventually run into someone who wants to damage your business reputation by posting negative online reviews. If the review is true, or merely opinion, freedom of speech will probably override any steps you can take to force the removal of the review. In some situations, a separate, negotiated agreement might limit what a person can say about your business, but many consumer-facing ‘gag clauses’ in form or boilerplate contracts are now void under federal consumer-review laws and can be dangerous to enforce. Otherwise, you have some tools in your toolbox to protect your online reputation by forcing the removal of negative reviews.

Governing Law

First, it might be helpful to know about some of the laws that will come into play in this online reviews context. Freedom of speech, protected by the First Amendment of the U.S. Constitution (and Art. I sec. 8 of the Texas Constitution), is implicated. These constitutional protections prevent government interference with the free expressions of citizens. This matters in the online reviews context because your ultimate avenue to force removal of a false negative online review is via court order—which is a governmental action affecting free expression of the person who posted the review.

Next, you should know that free expression is not unlimited. When the expression is false and harmful to the reputation of another person or a business, the laws related to defamation and business disparagement are implicated. Traditionally, it would make sense to send a demand letter for removal of the defamatory publication prior to seeking a court order of removal.

However, in recent years, the proverbial pendulum has swung in the direction of more protection of free expression. Two Texas statutes following this trend are the Defamation Mitigation Act (the “DMA”) and the Texas Citizens Participation Act (referred to as the “TCPA” and the “Anti-SLAPP” statute). In most Texas defamation cases—and in many business-disparagement cases that are really about allegedly defamatory statements—the DMA strongly encourages the defamed party to send a timely, specific written request for correction, clarification, or retraction. After the Texas Supreme Court’s decision in Hogan v. Zoanni, the main statutory consequences of not sending a compliant request are that the defendant can ask the court to temporarily abate (pause) the lawsuit and the plaintiff may lose the right to seek exemplary (punitive) damages. Dismissal is generally not the remedy under current Texas appellate decisions applying the DMA. Also, The TCPA provides very powerful defenses to a defendant accused of defamation or business disparagement. You should talk to your attorney about the potential impact of the TCPA before pursuing your defamation or business disparagement lawsuit.

NOTE OF CORRECTION: The previous paragraph as been updated post-Hogan. Previously, it stated that “. . . there is a debate about whether failure to send the letter prevents recovery of punitive damages or allows for the full dismissal of the lawsuit.”

What about contracts?

If your business uses Angi (formerly Angie’s List) or other opt-in customer-review platforms, their terms of use may limit what you can demand from the platform itself and may require you to follow specific internal procedures or arbitration rules before they will consider removing a review. Be wary of any such restrictions before pursuing removal of bad reviews, and remember that federal consumer-review laws, discussed below, limit how far businesses can go in trying to contract around honest reviews.

Separate from platform terms, some businesses use non-disclosure agreements (“NDAs”) or non-disparagement clauses to try to control what people say about them. In many consumer form contracts, those ‘gag clause’ provisions are now void or unlawful under the federal Consumer Review Fairness Act, and trying to enforce them can backfire badly—sometimes triggering anti-SLAPP motions, DTPA claims, and fee-shifting. In other contexts, like negotiated settlements or certain employment or business-to-business agreements, NDAs and non-disparagement provisions can still be enforceable if drafted and used carefully, but they are very fact-specific and can collide with whistleblower and free speech protections. Because of those risks, it’s important to talk with a lawyer in your jurisdiction before relying on any NDA or non-disparagement clause to address online reviews.

So, what CAN you do?

Send a timely, detailed DMA letter to the person who posted the review, and check each platform’s policy for reporting defamatory content and follow its procedure. In some circumstances a lawsuit may become advisable, and that DMA letter can later become important evidence of falsity and actual malice if the other side refuses to correct obvious errors.

Takeaway

It was always best practice to start with a demand letter in most situations. But now that Texas has the DMA, you should treat a timely, specific request for correction or retraction as a near-mandatory step before (or very shortly after) you file a lawsuit for defamation, and in many cases business disparagement. Failing to do so can let the defendant pause your case and may cut off any chance at punitive damages, even though it usually won’t kill the lawsuit outright. The interplay between the DMA, the TCPA, and federal and state consumer-review laws is complex, so it’s especially important to talk with a lawyer in your jurisdiction before taking further action.

Disclaimer: This audio and blog post are for informational purposes only and should not be misinterpreted as legal or other professional advice. If you have a legal question, you should consult with an attorney in your jurisdiction. Thank you for tuning in to Keith Law, PLLC.

(Photo by Gary Barnes from Pexels)