What Are Non-disparagement Clauses?

by | Business Tactics, Ethics, Negative reviews, Online reviews, Review Economy, Review law

Are they enforceable under FTC regulations?

Cartoon court judge at desk with gavel

In the USA, the Consumer Review Fairness Act (CRFA) protects your right to share honest opinions about businesses you patronize. This applies to products, services, and professional conduct. Such protection includes honest opinions expressed in forums like social media. Business contracts prohibiting honest reviews or threatening legal action are subject to CRFA penalty. Specifically, sharing honest reviews and opinions online is safeguarded whether positive or negative.

Unlawful practices and CRFA enforcement

On the contrary, and since the rise of The Review Economy, some businesses have attempted to suppress online reviews. Such businesses include non-disparagement clauses in their company contracts. These clauses attempt to impose fees on negative online reviewers, even when those reviews are factual or honest.

Recently, the Federal Trade Commission (FTC) imposed penalties on three companies that attempted to stifle negative online reviews. These companies all used non-disparagement clauses. As a result, those businesses were ordered to remove the clause from their customer contracts. Furthermore, they were required to inform past customers that the clause would not be enforced.

Does the CRFA guarantee consumer review protection?

The CRFA helps protect consumer reviews. While this may be true, giving a negative online review is not without some risk.

To be precautious, product and service reviewers should always:

  • Stick to the facts and be able to provide verification of those facts if asked.
  • Position your opinions as opinions, not as facts. For example, “In my opinion, these are unethical business practices.”
  • Give constructive criticism, and don’t rant. For example: “The server could have been more attentive and respectful to our group.” As opposed to “Our waiter was rude and a jerk.”

Using these best online review practices will help protect your voiced opinion legally. Review with confidence. In short, your right to give honest reviews is ultimately protected by law!

The FTC is also cracking down on fake online reviews. Learn more here.

Tell us what you think! Tweet us @100_Reviews and share your thoughts. We’d love to hear from you and maybe even feature you (or share your story) on an upcoming episode of the #ReviewChat Podcast!