Can You Give a Bad Review?

Lately, I have been pondering something I don’t know the answer too.  Over the course of the last ten years, social media has exploded.  Crowd reviewed sites like Open Table, Trip Advisor, Yelp, Foursquare and others have dominated.  Sites like Facebook and Twitter allow people to pop off or spread opinion.

We traditionally think the “wisdom of a crowd” knows more than any single dominant reviewer.  The new platforms have given the crowd a voice.  People inside those different websites have built reputations.  Many have built their own businesses off the platforms. It’s all good good good until someone leaves a bad review.

I asked a question about this.  “Can a private company cancel your contract if you complain-or fine you? Isn’t it an infringement on your 1st amendment rights? By the same token, are private companies compelled to do business with people they don’t want to do business with? Can they intentionally discriminate?”

The reason I asked the question is I have been seeing companies intentionally discriminate more and more.  Here are some links to two examples:

In some commercial leases, I have seen clauses where the owner/manager of the property has the right to fine the tenant if they leave a bad social media review.

I am not a lawyer, and don’t pretend to know how to interpret the law.  I just have common sense and often common sense isn’t legal.  It seems like a double standard to me that a company could take this action, but a baker in Oregon couldn’t.  It sure seems like if I didn’t like Christians, I could refuse service to them based on what my lawyer friends say.  Unless Christians are a “protected class”.  That’s why you see virtually every specialized group try to get protected class status under the law.  To be clear, I am not advocating or judging anything, just making observations.

My personal opinion is if you put your shingle out on the public square to do business, you have to do business with the public regardless of gender, orientation or anything like that.  Occasionally, you will have to do business with people that you don’t like.  If they do harm to your customers, you can take some action.  Clearly, according to my lawyer friends, I am wrong.

My lawyer friends weighed in and said that businesses are well within their rights.  They fall under non-disparagement clause rulings.  The Non-disparagement clause doesn’t raise First Amendment issues because JetSmarter/Tesla aren’t government entities.  Companies can set community standards that are essentially private contracts to use the service or software.   However, they do not “filter” or “edit” because doing so would open them up to liability for what is posted and waive their rights to limited liability. But here is the interesting caveat, “Unless, they are a class protected under the particular circumstances by law (e.g. You can’t discriminate in hiring or firing based on race, gender, etc)”

If you look at it from the company’s perspective, firing customers could be one of the best things a company can do. Not all revenue dollars are created equal.  Some customers tie up company resources and have to go.

Here is an example from my own experience.  When I had a sales territory for 3M, I had a distributor that inventoried my product but never sold it.  When customers ordered it, they sent their own private label product.  That allowed the distributor to have it both ways.  They could tell the customer that they carried 3M, but they weren’t out on the street selling it.  That pissed me off.  I persuaded 3M to pull the business from them.  It took a while and I am sure there was a lot of legal wrangling internally.  From my perspective as a sales person, it hurt my top line revenue but I was willing to take the hit since they weren’t helping me on the street.

Here is a classic definition of a non-disparagement clause:  A Non-Disparagement or Protection of Reputation clause restricts individuals from taking any action that negatively impacts an organization, its reputation, products, services, management or employees.

That leads me to another common sense observation.  Free speech is free and you are permitted to say anything you want, but it comes with consequences that you have to accept after you say it.  If I go to a restaurant and leave a bad review, I shouldn’t expect them to accept my reservation the next time around.

With online reviews, I think it’s important for the reviewer or the platform to help the review be more transparent.  If the reviewer has only been to the place one time, it’s important to know that.  Everyone can have an off night.  At the same time, if a place/service/product sucks, shouldn’t you be able to say something about it without repercussions?

The enforcement of non-disparagement clauses might have a different effect though.  If people are prohibited from posting negative reviews, or saying negative things, what happens?  Don’t the platforms become echo chambers that have far less worth?  Does it shift power back to traditional centralized reviewers?

  • CDsecurities

    The “consequences” comment seems to conflict with the “repercussions” sentiment and I think the “consequences” sentence rings true. In private industry, consequences/repercussions for behavior (as opposed to for innate characteristics of a particular class) are will within the bounds of running a business.

  • Dan Kunze

    “If you look at it from the company’s perspective, firing customers could be one of the best things a company can do. Not all revenue dollars are created equal. Some customers tie up company resources and have to go.”

    I do this all the time. All customers are not created equal. You have to decide as a business owner if what they are buying is worth it to you. If there is a problem child and they are taking up too much time/resources and there is no hope to improve it, you are much better off jettisoning them and letting them consume your competitors resources. Typically I do it in a slight of hand way, such as being “out” of items regularly or “not able to fill” orders. Eventually they go to a competitor and you haven’t burned a bridge. I never like to burn the bridge.