Thursday, June 21, 2018
News Roundup

The hotel that threatened to fine for bad reviews

Union Street Guest House, a self-described "historic" hotel in New York's Hudson River Valley, is testing the proposition that all press is good press. After the hotel threatened to fine a wedding party $500 for each negative online guest review, the Internet unleashed a torrent of outraged, one-star reviews on the inn's Yelp page.

The specific language in the hotel's terms — outlining how the $500 fines would be withheld from the wedding party's security deposit until the negative reviews were taken down — has since been removed and the hotel is quickly backtracking. "The policy regarding wedding fines was put on our site as a tongue-in-cheek response to a wedding many years ago," the hotel said in a statement. "It was meant to be taken down long ago and certainly was never enforced."

It would be convenient for the hotel if all this were just a bad joke gone awry. But the experience of one former guest, Rabih Zahnan, suggests that's not the case. Last November, Zahnan wrote on Yelp that the hotel's management "had the gall" to threaten him financially about a negative review he'd posted two months earlier. "Please note that your recent online review of our inn will cost the wedding party that left us a deposit $500,'' the hotel wrote to him.

Alarmed by the email, Zahnan called the wedding couple to see whether Union Street had, in fact, charged them for the review. It hadn't. A month later, he received another message from the hotel. "We have no idea why you feel the need to continue to talk bad about us on-line. You guys do realize that your wedding party saw and agreed to this policy and your new comments will cost another $500." The final email arrived a few days later:

I am so sorry you did not enjoy your recent stay in my Inn. Please know that I have taken your comments to heart and will work on all of the issues.

I just wanted you to know, however, that I designed this place as an artist retreat and we very rarely allow wedding parties to hold all of our rooms for their guests mostly because I feel there are much better-suited places for wedding folk to stay here in Hudson.

Having said that, when I do agree to let a wedding party hold the rooms, because they cannot find rooms anywhere else, I ask for a deposit, part of which is to guarantee that I won't see any negative reviews online.

So, just please know the staff can't refund the wedding party until your review is removed. I guess it's just up to you really.

Chris Wagoner

"I've never heard of an experience like this," Zahnan says. "They were using intimidation to take down reviews.''

Few would argue that threatening financial revenge on unsatisfied wedding parties is an acceptable business tactic. But did Union Street Guest House ever actually stray outside the law?

Oddly, perhaps, the legal system hasn't clearly dealt with this question. In 2003, the Supreme Court of New York came close to addressing this issue in People of the State of New York v. Network Associates. The New York attorney general's office had sued Network Associates (later McAfee) for a "censorship clause" that prohibited users of its software from publishing reviews of the product without "prior consent" from the company.

The court ruled in New York's favor but based its decision on a separate issue of consumer fraud; it ignored the question of whether a clause prohibiting customer reviews was unenforceable. "Right now there's not a lot of precedent as to how far a company can go in restricting the speech of users of its product," says Ken Dreifach, New York's lawyer on the Network Associates case.

That said, if a policy like the one employed by Union Street were to wind up in court, it would most likely be struck down as illegal under a doctrine of contract law known as unconscionability. "It says if there's a surprise term in the contract that is so unfairly one-sided that one can doubt that a reasonable party would have knowingly agreed to it, that the clause cannot be enforced," Scott Michelman, an attorney with Public Citizen, says. "Nobody enters into a consumer contract expecting that they're going to be paying a fine if another consumer doesn't like the business."

And if this week is any indication, consumer outrage is often sufficient to make businesses change their ways before the courts ever get involved.

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