“Hey! That’s a GREAT Idea! I LOVE it! Sure I’ll accept a refund in exchange for never telling anyone how lousy your product is!”
…no one should trust or do business with a company that engages in this unethical practice. Just an opinion, now.
What SmileDirectClub does, as documented in a New York Times Business Section story, is force customers to sign a non-disclosure (or confidentiality) agreement before they can receive refunds for unsatisfactory products. That way, other customer can’t find out about what the SmileDirectClub can turn out to be, and in ignorance are more unwitting customers.
Here’s an excerpt from the Times piece:
To fix some crowding in her teeth, Taylor Weakley, an environmental scientist in Denver, ordered teeth aligners two years ago from SmileDirectClub, a start-up she had seen advertised on social media. At $1,850, the products were cheaper than braces, and she did not have to visit an orthodontist to get them. But when the aligners did not correct Ms. Weakley’s teeth as promised, she asked for a refund. After a lengthy back-and-forth, SmileDirectClub said she would get her money back if she signed a nondisclosure provision as part of a general release form. In September, Ms. Weakley, 25, agreed.
“Going forward, I can’t say anything,” she wrote in an email.
What Ms. Weakley experienced was part of SmileDirectClub’s methods to limit information about customers’ dissatisfaction with its products. Seven people who ordered teeth aligners from the company described to The New York Times how the products did not fix their teeth; four said the aligners had created new problems that required traditional dentistry to correct. When some of the customers requested refunds, SmileDirectClub asked them to sign the confidentiality provision. The agreement prohibited the customers from telling anyone about the refund and required them to delete negative social media comments and reviews, according to a copy viewed by The Times. Two of the seven people The Times talked to had signed the agreement.
No, the Times isn’t making this up. Here is a section of the confidentiality agreement included in the article:
Nice.
This is loosely equivalent to the Godfather’s “offer you can’t refuse.”
Yet it is perfectly legal, and likely to remain so. It is also unethical as hell; in fact, in my latest legal ethics seminar I discuss examples of conduct that is ethical but illegal, and conduct that is legal but unethical. I’m adding this practice to the latter.
Even plaintiffs defense lawyers, whose clients benefit from such provisions (meaning the the lawyers benefit, at least in the short term), recognize that non-disclosure / confidentiality agreements are wrong, bad for the public welfare, bad for transparency, bad for truth. They take the position that lawyers should encourage their clients to refuse to sign such deal, though if a client is determined to be silences in exchange for cash, the lawyer is obligated follow the client’s wishes. Untold victims have been harmed because corporations found it cheaper to pay off potential litigants harmed by their products and make them pledge to keep quiet in exchange, rather than fix the flaws that caused the harm. Sexual harassers and serial sexual predators llike Harvey Weinstein use non-disclosure agreements to keep their victims quiet so they can victimize others.
Non-disclosue agreement result when an inequality of resources is used to allow a wrong-doer to escape detection by the greater public by forcing the victim to either capitulate or spend money on expensive lawsuits. Not only is the public kept in the dark about a business predator, but the paid-off victims are made unwilling participants in corruption.
The Times report says that the company has a hair-trigger legal response to criticism, suing the owner of the productivity site Lifehacker last year for defamation and libel over an article that outlined the risks of its products. Arthur L. Caplan, a professor of medical ethics at the New York University School of Medicine, is quoted as saying, “They’ve been almost like nervous bullies to critics.”
Almost? (BOY, I detest mealy-mouthed academics…)
Susan Greenspon Rammelt, SmileDirectClub’s chief legal officer, said that SmileDirectClub’s legal moves were necessary to protect itself. “When we believe that there is an organized campaign to damage our reputation amongst consumers, dentists and/or investors, we will defend ourselves and our mission to democratize access to care every chance we get,” she said.
Uh-huh.
The non-disclosure agreements are signature significance for a company that cannot be trusted, and no potential customer who is aware of this practice should risk involvement with it. If they do, then they have placed themselves in the position of the frog in the fable of the Scorpion and the Frog.
Of course, that’s just my opinion…
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Here’s the only link that Facebook will let you post: https://twitter.com/CaptCompliance/status/1220375219501748231
Ethics Alarms 
I have to ask, how does one go about challenging such a provision if by filing suit one is in violation of the provisions and if one does not sign the release that person has not been harmed thus has no standing?
Refuse to sign, sue for damages, a mass tort if possible.
“It is also unethical as hell; in fact, in my latest legal ethics seminar I discuss examples of conduct that is ethical but illegal, and conduct that is legal but unethical. I’m adding this practice to the latter.”
I might be incorrectly remembering, but I thought you’d said something to the effect that ethically neutral acts become unethical when they also happen to be illegal. I think the example might have been being running a red light at 3AM when you can see for miles around, and there’s obviously no one else around.
Is this a kind of dissonance-scale thing where the illegality of a thing ratchets something down on that scale of ethicality, but doesn’t per se mean that an illegal thing is unethical, or am I just completely off my rocker? What does an ethical crime look like?
Perhaps refusing to follow an unjust law? Allowing Rosa Parks to sit in the front of the bus? A crime, at the time, but the right thing to do, thus ethical?
Illegal but ethical is almost completely restricted to civil disobedience, and then the ethics incompleteness theorem anomalies, like torturing the one guy who can tell you were the ticking nuclear bomb is that will kill millions. Legal but unethical is a much larger category,
As a minor point of interest, Mrs. OB and I have both used Invisalign braces provided by our dentist for, I think, about four grand each person. Much more than the numbers you see on TV ads, but boy, the braces worked great. Pretty amazing technology. The braces were made off cell phone photos our dentist took of our mouths. Which reminds me, I didn’t wear my retainers last night.
OB, two questions: wouldn’t the onus be on your dentist for recommending/choosing/implanting them if they didn’t work … and … were you given any non-disclosure agreement to sign?
I would never sign such an agreement. And in spite of all the positive reviews, I would distrust the company that asked for it. I declined to sign one in an emergency room once, pointing out that there was on hand (to be polite) a less expensive, less problematic alternative that they could use. The clerk glanced at me and removed that sheet from the others without saying a word although he had already made sure every other “i” had its little dot on top.
Question: If a dissatisfied customer sued and won – whether or not there was anything more than the refund involved – could he then speak out? And, if so, could he (or his attorney) set up a class action suit later on?
I was chewing on almonds when I started to read this. Then I stopped.