Editor's Note: The following is a guest post from Laureen Fagan, a senior public relations counsel and editorial director at Ugly Dog Media.

A new federal law in the United States protects consumers who write negative customer reviews online. The Consumer Review Fairness Act went into effect on March 14, and American businesses need to be sure they’re complying with its provisions.

Variants of the law have been discussed for years as the concerns of both business owners and customers surrounding negative content grew. Issues arose for several reasons. For example, some companies built clauses into their contracts that prohibited customers from sharing their experiences — good or bad — with others on popular review sites like Yelp, specialized sites like CrowdReviews.com or a company’s own website. That devil was often buried in the legal fine print.

That’s what happened in the case of a Texas couple dissatisfied with a pet sitting service. The company subsequently received a scathing critique of how cloudy the fish tank water became while the couple was gone, that they could see by remote monitoring that the security alarm on the house wasn’t set and that they couldn’t reach the dog walker — seemingly small frustrations that added up to a one-star rating.

What the Duchouquettes never envisioned was that they’d soon receive a cease and desist letter from the pet service demanding that the negative Yelp review be removed, or that they’d be slapped with a lawsuit for sharing disappointments that led Yelp to apply a warning of its own on the company’s page.

How to handle non-disparagement clauses

While some states prohibited non-disparagement clauses in contracts — clauses that became increasingly common as the use of social media and star ratings took off — the new federal law broadens that prohibition. Any consumer contract that includes them is considered void if, according to the National Law Review, the language includes restrictions or penalty fees for publishing negative review.

“Companies that use non-disparagement clauses in their consumer contracts should remove such clauses to ensure that their organizations are in compliance with the act,” per NLR contributing authors Rahul Kapoor and Shokoh Yaghoubi. Still, that doesn’t mean customers can say anything under the new law.

“The Consumer Review Fairness Act contains certain exceptions,” they add. “The act does not affect any duty of confidentiality, or any civil cause of action for defamation, libel, slander, or any similar cause of action. The act also does not affect a company’s right to remove or refuse to display content that contains personal information of another person; is obscene, vulgar, harassing, or otherwise inappropriate; is unrelated to the goods or services at issue; or is clearly false or misleading.”

It’s precisely the latter kind of communication that informed the decision in the case of Dawn Hassell, a California attorney whose law firm was targeted with negative reviews she said were defamatory. The judge agreed, and that put Yelp on the hook after a court ruling that ordered the negative content to be removed. The company, along with social media giants Facebook and Twitter and the ACLU, has argued that if customers or clients could be sued successfully for posting negative reviews, a chilling effect would result in skewed ratings and compromised speech.

The wider scope of the issue for Yelp and other online publishers protected under the Communications Decency Act is primarily the reason why the California Supreme Court has agreed to review the case. It also caused ripple effects with, for example, the Glassdoor website. The company said employers are sending letters citing the Hassell case and demanding the removal of negative reviews by employees.

“The ruling exposes user-generated content sites — a category which includes everything from Yelp to Twitter to Backpage to any outlet with a comments section — to legal liability for things users post,” writes Elizabeth Nolan Brown on Reason.com. The case and others like it present another challenge in defending the rights of consumers from legal liability for their negative reviews while seeking to protect the platforms on which those negative reviews appear. While the legal question is a separate one, it is inextricably linked to the customer review process of business owner, transactional client and third-party entity.

Honesty is best

So what should companies do to protect their brands, reputation and the important relationships they’ve built with customers? As several analysts have pointed out, once you’ve made sure that your contracts are in compliance with the new law, maybe the place to begin is by asking yourself why you’re worried about negative reviews and what that means about customer engagement.

“Honesty is the best protection that any company has against harmful negative reviews from unhappy clients,” said Jeev Trika, CEO of CrowdReviews.com. “If customers are satisfied, then the positive reviews — and the potential business growth — naturally follow. When the inevitable misstep occurs, honesty about the situation and the company’s intent to provide a solution can be just as powerful as a five-star rating and demonstrate that a firm cares about its name.”

Yet there will always be scenarios, as Hassell successfully argued, where negative reviews are false or misleading. That content isn't protected under the new consumer law.

“One option is to channel consumer review feedback to your own corporate sites,” Trika said, noting that marketing professionals and community managers have more control over the process without limiting the legitimate right of customers to share their stories.

That’s not entirely practical, though, where social media keep people connected on other sharing platforms. It’s also a good idea to consider listing the quality of reviews on a site using intelligent verification and vetting steps.

“People care about reviews only as much as they can trust them to be true,” Trika said. “There’s a world of difference between the anonymous post full of lies to intentionally harm a competitor, say, and the fully identified client with years of doing business with the company who has a valid complaint to hear.”