Last year, when Michelle and Robert Duchouquette of Plano, Texas went away for a long weekend, they hired the Dallas based pet-sitting service Prestigious Pets to care for their two dogs and a fish.
Michelle Duchouquette wasn't thrilled with the company's services, and made that known on Yelp. She posted in a one-star review that Prestigious Pets provided "fine" care for her dogs, but overfed the fish.
The pet company responded by suing the couple for allegedly violating a non-disparagement clause, and for defamation. Prestigous Pets initially sought four figures in small claims court, but later escalated the battle by filing to Dallas County District Court, where it sought up to $1 million in damages.
The company alleged that its pet-sitting contract contained language prohibiting consumers from "taking any action that negatively impacts Prestigious Pets, LLC, its reputation, products, services, management, employees or independent contractors."
This week, Dallas County District Court Judge Jim Jordan dismissed Prestigous Pets' lawsuit. What's more, he ruled that the company may also have to pay attorneys' fees and sanctions; the amount will be determined in the future.
"What the decision does make clear is that non-disparagement clauses in form consumer contracts are susceptible to attack in court," writes Public Citizen attorney Paul Alan Levy, who represented the Duchouquettes. "At the same time, the ruling does not establish that non-disparagement clauses in form consumer contracts can never be valid." (Public Citizen also represents MediaPost in an unrelated effort to unseal court papers in a lawsuit brought by the Federal Trade Commission against Amazon.)
Congress is currently considering legislation that would prevent companies from requiring customers to refrain from posting bad reviews.
But even without that nationwide law, some judges, as well as state lawmakers, have already expressed disapproval of those types of contracts.
Lawmakers in California recently passed a bill prohibiting companies from insisting on contractual terms that restrict people's right to post reviews. The measure specifies that anyone who tries to enforce a non-disparagement clause could face penalties of between $2,500 and $10,000.
California lawmakers acted after the online retailer KlearGear tried to fine married couple John Palmer and Jennifer Kulas $3,500 for posting a bad review. When the couple refused to pay KlearGear allegedly wrecked their credit. Palmer and Kulas subsequently sued KlearGear for violating federal fair credit law; A federal judge awarded the couple $306,750 in 2014.
In New York, one judge suggested as far back as 2003 that restrictions on consumers' right to post reviews are unlawful. That ruling stemmed from a case brought by former New York State Attorney General Eliot Spitzer against Network Associates (now McAfee), which said in its terms and conditions that consumers needed permission to publish reviews. Spitzer won an injunction requiring the company to remove that language from its terms.
Despite that ruling, however, U.S. District Court Judge Richard Sullivan in Manhattan recently allowed a couple who rented out their Paris apartment to proceed with a lawsuit against vacationers who allegedly violated their contract by posting a review online. That case is still pending.