Bill Outlawing “Gag Clauses” That Punish Customers For Writing Negative Reviews Goes To President
After more than a year of waiting, Congress has finally okayed a piece of legislation that, if signed by the president, will stop companies from using so-called “non-disparagement” or “gag” clauses to prevent or discourage customers from writing honest reviews.
The Consumer Review Freedom Act gives the Federal Trade Commission and state attorneys general the authority to take enforcement actions against businesses that attempt to step on customers’ First Amendment rights by requiring that they sign a non-disparagement agreement.
These gag clauses generally threaten to punish the customer with financial penalties if they say anything negative about their experience with the company — even if it’s completely honest. Some companies have gone even further, fining customers for merely saying they intend to write something negative, or even encouraging others to give negative feedback.
Perhaps the most famous of these instances involves online retailer Kleargear, which tried — unsuccessfully — to slap a $3,500 penalty on a customer for complaining online about a transaction gone wrong; a transaction that she says occurred long before Kleargear even had a non-disparagement clause in its user agreement.
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