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  • Nashad Omar Carrington, Esq.

Be Careful Before You Hit “DISLike” or Leave a Negative Review Online

Are Consumers Losing Their Voice In Strategically Placed Contractual Gag Orders?

If you happen follow our periodic blog, you’ll likely know The Carrington Firm very recently relocated to St. Louis, Missouri. As such, we encountered all of the normal headaches and hiccups involved with relocation; expenses related to moving, setting up utilities, signing leases, ordering new business cards, etc. But in our signing of a new office space lease, I encountered a provision with regard to our use of the unit – or more directly, a restriction in our expression of our opinion of our use of the unit:

“19. Prohibited Conduct. You and your occupants or guests may not engage in…injuring our reputation by making bad faith allegations against us to others.”

At first this restriction may seem in the general best interests of the business we are doing business with, however; at the essence of the restriction is two things that didn’t sit well: i) an prior restraint; and ii) a blanket restriction on our ability to say anything other than positive sentiments about our experiences before, during and after the tenancy.

Some legal minds may look at the restriction, and assume that the foregoing statement is overly broad in relation to the intention of the restriction. However, according to The Missouri Supreme Court, “Bad faith is a state of mind, indicated by acts and circumstances, and is provable has laid out bad faith in the following way by circumstantial as well as direct evidence.”[i] [ii] Bad faith is a liability derived in the contract principle of good faith and fair dealing, and is a law that tests one party’s conduct with regard to the other. In most cases nowadays, we see the issue of bad faith dealing being relevant in insurance claims; but as mentioned above, our instance of signing and entering an office space agreement is surely not dealing with insurance at all, but rather is a restriction upon our ability to discuss issues we may have with regard to our tenancy under the very vague term of “bad faith”.

So what recourse in contract does that leave us with in terms of knowing what is, but more importantly, what is not acceptable in our “making…allegations against” the landlord? Honestly, I couldn’t tell you, the language is very ambiguous, and overly broad, and while its labeled “prohibited conduct”, this provision amounts to nothing more than a non-disparagement clause.

Our noticing this provision in a landlord / tenant agreement is not an isolated occurrence by any means. The very nature of business, regulation and restriction and expression is changing and subject to steady evolution. Often times, these changes are taking place in the realm of providing additional protections to consumers and employees, with big business often and historically having owned much of the bargaining power. Non-disparagement classes are exceptionally prevalent in employment contracts and more pressingly in employee severance agreements, but the EEOC and many government agencies have increasingly voiced concerns as to whether these clauses have gone too far by illegally prohibiting employees, current and former, from filing legitimate, but “disparaging” claims with those agencies.[iii] Private businesses’ ability to restrict the words, actions, feelings, and reviews of employees and customers is also feeling the strain in recent cases that are slowly making their way up the appeals chain, likely soon to be as far as the United States Supreme Court.

To find a website, or readily available free or paid software, anywhere in this overly litigious society that does not have an extensive document called “Terms of Use”, or “Use Policy”, would be virtually impossible. The one that most people can readily identify with is the terms of use that they must scroll through and accept on the iTunes store for every updated software release. Well, its more than just iTunes and Apple taking advantage of this overly burdensome way to ensure that customers are provided with the terms and conditions for using its software that most no one actually reads. But what is actually contained in these documents, and what force or effect these terms have in the event of a lawsuit, is the basis for its discussion.

Without going into a complete Contracts 101 course, suffice to say that companies have implemented these terms and conditions, generally with some sort of acknowledgement at the end of the document, so that customers cannot later claim they did not receive notice of the terms – regardless as to whether the customer actually read the words or just scrolled to get where they wanted to go. Years ago, when I was young and naïve in my professional impressionability, I was tasked with drafting the terms and conditions for a recent release of SaaS based software for a company I was working for. My direct supervisor, an attorney not much older than I, but clearly much less ethical, instructed that I purposefully fill the lines of the document with as much filler and repetitive sections as possible to discourage customers, opposing counsel, and anyone else for that matter from actually reading the document, because as he put it “ know no one likes to read”.

Notwithstanding other terms in most contracts, in this piece we’ll examine how courts are looking at the ability of companies to restrict future language, opinions or expressions of customers and employees through the implementation of non-disparagement clauses in contract. So foremost, what is a non-disparagement clause?