New Law Would Ban Companies From Penalizing Customers Who Write Negative Reviews

Here’s an example of a non-disparagement clause in the real world. This one is from a wedding supply vendor’s contract. It forbids customers from making disparaging remarks or encouraging others to make them.

For the last couple of years, we’ve been telling you about ridiculous, so-called “non-disparagement” clauses that threaten customers with financial penalties for writing (or threatening to write, or even encouraging someone else to write) something negative online about a company. California has already outlawed these clauses, which tend to fail when challenged in court, but an attempt to enact legislation at the federal level has so far fallen short. But that’s not stopping some members of Congress from trying to ban this form of consumer bullying.

Rep. Eric Swalwell from California, the lawmaker behind the Consumer Review Freedom Act of 2014, is trying again with the Consumer Review Freedom Act of 2015 [PDF], which would void any contract clause that “prohibits or restricts the ability of a person who is a party to the form contract to engage in a covered communication,” or which “imposes a penalty or fee” against that person, or which gives the business any intellectual property rights over the customer’s lawful communications.

This last one might seem odd to people who haven’t followed the news about these nonsensical contracts, but a number of businesses have attempted to quiet consumers by claiming a copyright on the customers’ reviews and photos.

There was the dentist whose contract included a clause automatically granting her intellectual property rights to anything her clients wrote about her. She tried to use this copyright claim to have negative reviews of her business taken down, but now she owes the customer thousands of dollars after failing to defend herself in court.

Then there was the Florida apartment complex that not only claimed copyright on tenants’ reviews, but on any photos they took of the property. After the news got wind of this clause, the management company claimed it no longer included that condition in its contracts, though at least one tenant said otherwise.

Just this month, we told you about the Orlando wedding supply vendor that not only tries to ban customers from saying bad things about their business, but also prohibits customers from encouraging anyone else to say something negative. The most perplexing part of the contract is that there is no mention or description of what sort of penalty the customer might face if they violated this clause.

“Too often, a consumer shares a negative customer service experience with others, then learns that according to the fine print in the boilerplate contract, he may not criticize the business publicly, including writing an online review,” says Scott Michelman of Public Citizen, who has helped represent consumers in non-disparagement cases. “Companies use these unjust terms to bully dissatisfied customers into silence.”

Michelman believes the Consumer Review Freedom Act would would protect individual consumers from hidden contract terms that forbid criticism.

“It also would help prospective customers avoid unscrupulous businesses by enabling them to learn from the experiences of their fellow consumers,” he adds.

This latest version of the federal legislation may stand a better chance, as Swalwell is joined in introducing the bill by powerful Congressman Darrell Issa, also from California, who is Chairman of the House Oversight and Government Reform Committee. Having bipartisan support from a prominent member of the House can’t hurt the bill’s chances.