Paul Alan Levy is once again reporting on stupid legal threats made by a stupid company with a stupid non-disparagement clause hidden deep in its clickwrap. In addition, there's an apparently stupid lawyer involved.
I do not use the word "stupid" lightly.
First off, any company that thinks it's a good idea to hide a non-disparagement clause in its contractual agreements deserves to be called "stupid." There's no better way to set your reputation on fire than to demand that customers never criticize you, no matter how terrible your goods or services are. Well, there is one "better" way: enforcing it.
That's what iGeniuses, an Apple device repair company, did.
iGeniuses is a Houston company that repairs Apple products; it especially touts its ability to repair computers suffering from liquid damage on a fast turnaround schedule. A number of former customers have expressed concerns about the success of the repairs, about longer-than-advertised repair times, and especially about their believe that the company is very slow to respond to questions from customers concerned about not getting their computers back in the expected time.
Geniuses, they are not. Here's the wording from its "Customer Satisfaction Policy," which also doubles as the "Terms and Conditions" you must agree to before sending iGeniuses your Mac for repair. (emphasis added)
Customers agree not to attack/criticize/disparage/defame i-Geniuses.com or any of its employees, associates or partners publicly (on public forums, blogs, social networks etc)... Similarly you agree not to seek any SEO advice on SEO forums, blogs, community groups or any social media in a way which brings bad name to i-Geniuses.com or any of its employees, associates or partners. In case of breach of this clause, you agree to pay a flat fee of $2500.00 per instance to cover the cost associated with the restoration of i-Geniuses.com’s reputation and any and all business losses as directly related to your actions or actions of those directly or indirectly influenced by your prohibited action.
As Levy points out, this has been added to a new page on the iGeniuses website, most likely in reaction to him questioning whether or not customers were even aware of the non-disparagement clause. Previously, customers only saw it if they chose to read the "Terms and Conditions" they had to agree to before iGeniuses would accept their money.
Customers have been invoiced for $2500, with some receiving additional billing ($250), supposedly to cover the cost of having a lawyer write up (badly) legal threats on its behalf.
Chris Cammack, the lawyer behind the letters, has also issued followups containing threats of litigation over breach of contract. Levy spoke to Cammack, but was only able to gather more information confirming the dubious legality of the clause and its corresponding legal threats.
I reached out to both the company and the lawyer to ask questions about these claims. iGeniuses never responded, but Cammack called me back and we had a thoroughly civil conversation, even if what he had to say was largely uninformative. I wanted to know, for example, which specific facts in each of the reviews iGeniuses claimed to be false. Generally speaking when lawyers send demand letters that throw around the word “false” but give no examples, that tends to suggest that they have no sound claims of falsity. And besides, having been in touch with three recipients of the letters, and having looked at some of the consumers’ documentation, it appeared to me that there is some justification for a complaint common to many of the Yelp reviews, that the company does not respond promptly to inquiries from customers. Cammack told me that he “d[id] not choose to tell [me]” what specific statements were claimed to be false. I could not help wondering whether he had any specifics in mind.
Multiple forms of stupidity present themselves. First, the legal threats are vague and attack reviews that are protected statements of opinion. The more egregious stupidity is that iGeniuses waited until after the passage of a federal law forbidding non-disparagement clauses to start enforcing its clause. Add to that the fact that one threatening letter targets a 2013 review, which would put it well past the expiration date of Texas's statute of limitations.
The letters state the company has "proof" the dissatisfied customers agreed to the non-disparagement clause, but in the 2013 case, that's almost impossible to believe. Unless the company did business under another name at another URL, the i-geniuses.com domain wasn't registered until 2014. (It now redirects to igeniuses.com, which was registered in November of last year.)
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More stupidly, iGeniuses' lawyer doesn't know for a fact whether or not the customers he told had agreed to this contractual language actually agreed to this contractual language.
I asked Cammack whether the web site worked the same way when two of the consumers had completed their transactions in 2015, and indeed whether the contract was the same when one of the consumers had sent his computer to iGeniuses in 2013. Cammack said he didn’t know the answers to these questions and that I would thus have to speak to his client. But if he didn’t know this basic information, how could he state as a fact that each of consumers had agreed to the contract he was telling them that had breached?
When Levy pressed Cammack on the legality of pursuing this after the passage of a federal law strictly forbidding this exact contractual language, the lawyer ended the conversation.
Finally, perhaps the stupidest thing about this whole fiasco:
Cammack plaintively said that he was just an outside contractor who had been hired to send three letters.
This is the worst: a lawyer willing to put his own reputation on the line to send letters of severely-dubious legality to unhappy customers of a company that would rather charge customers for negative reviews than attempt to make them happier. Cammack throws the weight of his profession behind letters designed to make recipients feel they have no choice but to pay up. With this "I was just following orders" pleading, he throws himself under the bus, saving iGeniuses the trouble. This is good news for the company, which will probably have its hands full dealing with unhappy customers and non-customers alike. Unhappy customers forbidden from screwing with iGeniuses' pagerank by its idiotic contract will now have the satisfaction of watching the company speedily negate its own SEO efforts without their assistance.
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