Businesses can’t sue customers for withering Yelp reviews, new bill says

A new bill protects consumers who post negative Yelp reviews.
A new bill protects consumers who post negative Yelp reviews.

The advent of Yelp has been both a benefit and a source of ire for businesses, with the online review site giving customers the ability to post their thoughts about a particular business, restaurant or product on a public page for future customers to read. Positive reviews can increase business and convince skeptical costumers to give a new place a try. But a negative review can sink a business as consumers rely more and more on online reviews as they decide what restaurants to try and what eye doctor to visit.

President Barack Obama signed a bill Thursday that will give consumers the ability to leave negative Yelp reviews without fear the business could come after them in court. The bill banned the ability of businesses to put non-disparagement clauses in their terms and conditions, which consumers often don’t even realize they are agreeing to by doing business with a particular establishment and clicking “I agree” online. Such clauses say that a negative review of a business can give the store the ability to come after the consumer for reporting a bad experience.

“This law is about protecting consumers posting honest feedback online,” said Rep. Leonard Lance, R-N.J., who sponsored the legislation. “Online reviews and ratings are critical in the 21st century and consumers should be able to post, comment and tweet their honest and accurate feedback without fear of retribution.”

In the face of businesses who sue costumers over negative reviews, Yelp has said reviewers “have a First Amendment right to express their opinions on Yelp.” The company posts warnings on pages of businesses who have sued customers for leaving negative reviews, which is itself a warning to potential new customers to avoid a certain business.

Yelp posted such a warning on the page of a New York dentist who has sued multiple clients for damages ranging from $50,000 to $100,000 for leaving negative reviews. The consumer alert said the dentist was “issuing questionable legal threats against reviewers.” At least two of the suits have been settled, according to the Los Angeles Daily News.

California’s Supreme Court is considering the case of a law firm who sued a client for posting negative reviews. The client was sued for defamation after she refused to remove the refused. Yelp itself was not named in the case, and under the Communications Decency Act is exempt as an online publisher for liability for user postings on its site. But the company fears allowing the law firm to delete the reviews would be a troubling precedent for free speech online.