BBB Reminder: Non-Disparagement Clause Lacks Transparency

June 06, 2017

By Evan Kelly, Senior Communications Advisor for BBB serving Mainland BC


Transparency. Besides trust, it’s one of the pillars that Better Business Bureau builds its house on. In today’s marketplace, online reviews have become a tenement of doing business. The growth of online review giants like Yelp, Google reviews, even BBB Customer Reviews, means consumers are doing a lot more research before opening their wallets. In fact, 90% of consumers now search reviews before making a decision to spend. Accessible and legitimate reviews provide consumers with more information so they can make an informed decision when spending their money or hiring a contractor.


A couple of years ago the Obama Administration in the US passed a law that prevents businesses from imposing, for lack of a better word, a gag order on contracts that prevented clients from writing negative reviews about their experience with the company. In some cases, a company would take legal action against a consumer for posting something negative, even though it may be true. These are called non-disparagement clauses.


It’s called the Consumer Reviews Fairness Act and is designed to keep a level playing field among businesses and transparency in the marketplace. The Federal Trade Commission will be able to take action against companies that try and dissuade people from posting honest reviews, even if they happen to be negative. At the end of the day, it prevents questionable businesses from competing against those that don’t include such clauses in their contracts and choose to remain transparent. Bottom line, stopping people from writing reviews is considered a deceptive act.


Better Business Bureaus across Canada applaud this type of government action. Currently there is no legislation in Canada that compares to the new US law, however, BBB certainly has a policy on it. Under current BBB policy, an Accredited Business must adhere to the same transparency or risk having their accreditation put under review. That means an Accredited Business is not allowed to put a non-disparagement clause in any contract they provide a consumer.


As you know, BBB fields and reports on complaints filed against all sorts of businesses. We have that privilege because it’s in the public interest to do so. And it is our job to help resolve those complaints. In fact, we resolved over 6000 complaints in 2016. We often tell businesses that complaints, or even negative reviews, are nothing to be afraid of and can often result in positive outcomes. A business can choose to use a negative complaint to its advantage by hearing what consumers are saying and adjusting business practices accordingly. Maybe there is something the business has overlooked or needs to work on to improve customer service. Responding to negative reviews in a professional manner is a terrific way to earn back that trust that seems to have been lost. Not allowing a consumer to write an honest review about your services shows a lack of integrity and perhaps even a lack of faith in your own brand.


It must be noted that if a consumer wishes to provide us with a Verified Customer Review for publication, they can not have a complaint filed against the business at the same time. Why? A complaint seeks a resolution whereas a review is simply about the experience the consumer had with the business.