Free Enterprise - The FindLaw Small Business Law Blog

Is One Bad Yelp Review Worth One Million Dollars?

No business wants to get dogged in a Yelp review, especially dog walking and sitting companies that thrive on word of mouth and positive customer feedback for new clients. But could a lone one-star Yelp review really cost a Lone Star state pet sitting company $1 million dollars in lost business?

That's what Dallas-based Prestigious Pets is contending, after a couple left a less-than-stellar Yelp review of their dog-walking and fish-feeding services. And even though the company may be trying to send a message to consumers, this may be a valuable learning experience for small businesses on when you can go too far to protect your image.

Murky Legal Waters

Michelle and Robert Duchouquette hired Prestigious Pets to look after their two dogs and pet beta fish Gordy while on a five-day trip to Napa, California last year, but weren't too pleased with the service. While Michelle's review of the service said the "care of our dogs was fine," she was upset about an additional $5 walking fee and complained the fish was overfed: "We have a camera on the bowl, and we watched the water go from clear to cloudy."

Prestigious Pets responded first with a $6,700 lawsuit in small claims court, then moved it to a Dallas district court and upped their damages to $1 million. Why so high? Paul Alan Levy, the couple's attorney, points to one charge in particular: "The complaint alleges that a charge of overfeeding a fish is libel per se because it amounts to the criminal offense of animal cruelty under Texas law."

Non-Disparagement Non-Enforcement

On top of the libel allegation, the lawsuit claims the Duchoquette's violated a service contract they signed with Prestigious Pets which included a non-disparagement clause:

[Y]our 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....Any violation of this clause is to be determined by Prestigious Pets LLC in its sole discretion....

Whether that clause is enforceable is up for debate. The social media non-disparagement clause is fairly new, and cases based on them are just now reaching the courts.

And aside from the enforceability issue is the public perception issue. Yes, your small business's professional reputation is often all you have. But which hurts your rep more: an isolated negative review, or a litigious campaign that makes you look like a bully? Not many people had heard of Prestigious Pets before they filed this lawsuit, but now millions of people might be hearing their name for the wrong reasons.

Follow FindLaw for Consumers on Google+.

Related Resources: