It’s important to note that U.S. courts typically do uphold website user terms when they are challenged. For example, an Arizona federal district court stated in a 2009 case referring to a non-disparagement clause, that “[u]nder Arizona law, courts generally enforce boilerplate language or clauses in non-negotiated, standardized contracts.” Serious stuff.
California, the home state of Yelp, recently made it a little easier to feel safe when using social media to criticize businesses for what the consumers believe to be subpar performance. California Civil Code § 1670.8, formerly called the “Yelp Bill” before it was passed, bars businesses from including those non-disparagement clauses in their consumer contracts. The law will take effect January 1st, 2015, and with it comes a host of civil penalties for violations: a $2,500 fine for a first violation, $5,000 for each one thereafter, and possibly $10,000 for a willful, intentional, or reckless violation. (There is a complicated body of law on how individual state laws are applied in the context of the worldwide Internet that goes beyond the discussion in this posting about this new state law.)
What are the implications of this new law? Many of us wouldn’t think of stepping foot in a store or restaurant without seeing what others have to say about the place even though many reviewers are unreliable, even seemingly crazy. Yelp and the like have become sources for the public to instantly obtain and share opinions about businesses in any corner of the world. A two-star average from 72 reviews? No, thank you. Lousy service? I’ll keep scrolling down the search list on my app. Admittedly, we all believe that haters are more likely to express opinions than the positive thinkers. Outrage has its power.
There’s a real issue here: freedom of expression in social media. In other words, to what extent will big social media companies govern consumer speech? For example, press reports say that a couple in the United Kingdom was recently fined £100 by a hotel per its policy, for posting a negative review on TripAdvisor that described the hotel as a “rotten stinking hovel.” After being put on alert that such a policy might not comply with trading practice standards, the hotel ended its policy and refunded the fine. (The story can be found here: http://www.bbc.com/news/uk-england-30111525.)
And reportedly, in Kansas City, a mother who gave an orthodontist a 3-star Yelp review initially received gratitude for the review by the orthodontist himself, only to later be approached by the orthodontist’s office manager, an attorney, and even his patients, to take down the review. (More details can be found at: http://www.kshb.com/news/science-tech/kansas-city-woman-receives-legal-threat-for-3-star-yelp-review-of-orthodontist.)
The passage of the California law won’t foreclose all legal recourse for those that receive less-than-desired consumer reviews. The law of defamation still remains in full force and effect, and is a viable option for businesses plagued by unfair reviews that express harmful false statements. For instance, saying, “my friend was poisoned by the pumpkin pie and had to be hospitalized” might well be defamatory if untrue, while saying, “I just felt uncomfortable in this creepy restaurant” isn’t likely defamatory, but rather a statement of opinion protected by the First Amendment. Yelpers enjoy the protection of the First Amendment, just like newspapers and TV networks. Any reviewer found to have posted false statement of fact on one of these social media sites may face liability in court. In other words, the new law hasn’t created an open season for defamation. Further, social media sites still retain the power to terminate user accounts, something that virtually all user terms include. Yelp, for example, states in its terms of service that it “may close your account, suspend your ability to use certain portions of the Site, and/or ban you altogether from the Site for any or no reason, and without notice or liability of any kind.”
So, before you post a scathing review about a recent experience, just remember – in California, you have a little more freedom to scream and shout. That freedom is not without its limits. For some reason, there is no push to restrict effusive praise. Compliments are always encouraged. If you have something nice to say, say it. But, if you have something mean to say, and you didn’t order that fly in your soup, you might feel just a bit safer about saying it in California.
In February 2015, our colleague and friend, partner Mark Fischer, passed away. We have made his blog posts available in honor of both his nuanced and wide-ranging knowledge of intellectual property, new media and entertainment law and of his entertaining style. Please read our tribute to Mark in the firm’s Alumni Spotlight publication and his obituary in the Boston Globe.