04 Oct Does Your Business Use Non-Disparagement Clauses?
If you do not know the answer to this question, or if you do, the next question is whether your company should be using them. That question may get more difficult in the coming months due to proposed legislation from both sides of the aisle on the use of disparagement clauses and the freedom to leave reviews on internet review sites.
Currently there is a combined effort in Congress to end the popular practice of limiting what a person can and cannot say after using a business’s services. If passed, the legislation would open up a person’s ability to post negative reviews and comments about a business on a website. The bill has big backers behind it through the efforts of the most popular review websites.
At this point you may be asking what a non-disparagement clause is, anyway. In recent years, companies have begun to include these clauses in their contracts, and the aim of the clause is to limit what a person can say online over services used. In most cases such a clause would be part of the bargained for exchange of goods or services. Courts across the country have upheld the clauses as a valid contracting power.
The opponents of these clauses have several arguments as to why they should be eliminated in today’s economy. One of the strong arguments on the opposing side is that these clauses limit a person’s free speech and are therefore contrary to the First Amendment of the U.S. Constitution. Another criticism is that limiting what patrons say about a business they used goes against the new economic way of doing business.
While there are good arguments on both sides of this issue, some of the core issues surrounding what someone says will remain. In our tradition of the common law, we have developed rules over the years that allows a person to speak her mind, but does not give license to say anything false or otherwise defamatory about another. Those actions will remain.
The issue of whether a statement made about a business or person is defamatory comes down to whether the statement is true or not. If a person goes to a business, then makes a false report about their experience, then it is most likely defamatory and therefore actionable under the common law in a civil action. And as was stated earlier, today’s economy in many ways revolves around what is printed, posted, and updated in the world wide web.
So what is the answer, if there is one, for how a business can protect its online reputation? The question of whether a disparagement clause should be used by your business is a good one, and it should be discussed with a legal professional who can help you understand the repercussions of your decision. For example, you can modify a non-disparagement clause to reflect your business’s desire to prevent defamatory and untruthful comments about it.
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