The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
Paul Alan Levy (Public Citizen) has the story, with links to the motion to dismiss. A Dallas pet-sitting company (Prestigious Pets) sued two customers, Michelle and Robert Duchouquette, because Michelle Duchouquette posted a negative Yelp review of the company, stating "that the company's assigned pet-sitter had potentially caused serious harm to the couple's fish by putting too much food in a fish-bowl while the couple were away on vacation for a few days." Prestigious Pets seeks up to $1 million in damages, on the grounds that this is supposedly libelous and that it breaches the nondisparagement agreement in its customer agreement:
NON-DISPARAGEMENT / INJUNCTION In an effort to ensure fair and honest public feedback, and to prevent the publishing of false or libelous content in any form, your acceptance of this agreement prohibits you from taking any action that negatively impacts Prestigious Pets LLC, its reputation, products, services, management, employees or independent contractors. Prestigious Pets, LLC will make every reasonable attempt to resolve or assist in any dispute or disagreement in services. Any violation of this clause is to be determined by Prestigious Pets LLC in its sole discretion.
Because, you know, fair and honest public feedback is best ensured by forbidding any public criticism—anything "that negatively impacts Prestigious Pets," "to be determined by Prestigious Pets LLC in its sole discretion."
Now I can't speak to whether the particular allegations about how Prestigious Pets treated the fish were correct; for Prestigious Pets' side of the story, see its complaint. There's also a dispute as to whether the nondisparagement provision was pointed out to the customer; Public Citizen's motion to dismiss (which, if granted, would also require Prestigious Pets to pay the defendants' attorney fees) claims it wasn't, while the complaint alleges the contrary. If the gag clause was indeed not pointed out, I think it would be unenforceable—Texas law views such unusual contract provisions that cause "unfair suprise" as unconscionable and thus not binding. (I asked Prestigious Pets if it wanted to comment further on the matter, and its lawyer responded that it didn't.)
But beyond the facts and legalities of this case, the best solution is to at least glance at any contract you're asked to sign, and, if it has a nondisparagement provision, switch to a competitor. I wouldn't trust any company that tries to suppress customer criticism this way. Indeed, even if the company has a positive rating on Yelp or a similar service, how is that relevant if any negative ratings might have been scared away through tactics like this?
And if you were to see such a provision, refuse to sign the contract, and then post a one-star Yelp review accurately reporting that you can't trust the company because its contract includes such a provision, you would then be doing a great service to your fellow consumers.