SEO Firm Devises New Way to Impose Nondisparagement Clause on Dissatisfied Customers

by Paul Alan Levy

Over the past decade, I have had occasion in several separate cases to help consumers in opposing creative ways in which dentists (Stacy Makhnevich, Mitul Patel, Gordon Austin, and others) have tried to insulate themselves from criticism by their customers. So it's about time I had a chance to help a dentist stand up for his own free speech rights.

A Houston dentist named Thomas Inman hired an Austin-based SEO outfit called “Local Search for Dentists,” whose promotional materials suggest that its customers gain roughly sixty new customer calls per months.  Inman authorized the firm to bill his credit card roughly $500 per month.  But when that credit card expired and he was asked for a new card number, he reviewed the results from his expenditure and concluded that he was not deriving the expected benefits.  

That is when his troubles began. The contract that he had signed at the outset had a clause requiring sixty-days notice to cancel the month-to-month SEO arrangement, and requiring further that the written notice be given “on official Local Search for Dentists documentation.”  But the cancellation form faxed to Inman contained several provisions to which Inman objected, including most notably a long paragraph in which the parties would agree to “keep the contents of this document confidential” and further that the parties would “not disparage each other, cause the disparagement of each other, or allow the continued publication of prior disparaging statements.”  Inman declined to sign this form, but rather canceled his SEO arrangement by a letter indicating that he was unwilling to sign away his right to criticize the SEO firm.  The firm’s CEO, Graig Presti, sent a series of emails directed to ”Carter” asserting that Inman was “refusing . . . to cancel properly,” directing “Carter” to “get the paperwork going today,” and concluding “It will be a slam dunk from a legal stand point.”  A few days later, Inman received a letter from an Austin lawyer named Carter Thompson charging Inman with having “refused to fill out the cancellation form” and warning, “If you refused to fill out the cancellation form, you have not cancelled the contract.”  Therefore, Thompson said, his client would be suing for breach of contract for the unpaid monthly sums.

But Inman has every right to his opinion about the value of the services provided by Local Search for Dentists, and as we recently argued in the Prestigious Pets case in Dallas, Texas courts require “clear and unmistakeable language” before rights can be deemed waived by a contract clause – as the Texas Supreme Court said in a case about alleged waiver of rights under the Uniform Commercial Code, the contract has to specify the rights being waived.  It is inconceivable that an agreement to use some unspecified form to effect cancellation of a search engine optimization contract could be deemed specific enough to include an effective waiver of the right to comment on the effectiveness and value of the services provided by this company.  And, indeed, because the form that Inman is being required to sign imposes a whole series of new obligations, one might question whether it is really a cancellation form at all.

When I contacted Carter Thompson about his demand letter, he was at pains to tell me about his client’s excellent reputation in the market.  But if Local Search for Dentists has maintained its reputation by imposing a nondisparagement clause on every dentist who becomes dissatisfied with its services, then perhaps we can infer that the company has secured its reputation by suppressing the truth.  Thompson also claimed that his client had sent out the proposed non-disparagement agreement only because it was clear that the parties were ending their relationship on a dissonant note (because Inman apparently got angry during a telephone call in which he was explaining why he wanted to cancel the arrangement).  But this argument is at odds both with the text of the form, which characterized itself as the standard cancellation form, and with Thompson’s own letter, which warned Inman that he had not effectively canceled because he had not signed the form with a nondisparagement clause.  

There is also an oddity about Local Search for Dentists’ business model.  Not every dentist in a given metropolitan area can be in the top ten Google search results.  When this company takes on a new dental client, don’t its efforts undercut the search rankings of other dentists who are in the company’s stable of clients in the same area?     I posed this question to Thompson; he has not responded.