Two years ago, California signed into law what was popularly called the “Yelp bill.” It prohibited use of “non-disparagement” clauses in consumer contracts. Now, Congress appears on the cusp doing something similar.
Earlier this week, the US House of Representatives passed the Consumer Review Fairness Act (HR 5111). Like the California law, it prevents businesses from inserting non-disparagement language into terms or contracts with customers and consumers. The purpose of the Act is stated as follows:
To prohibit the use of certain clauses in form contracts that restrict the ability of a consumer to communicate regarding the goods or services offered in interstate commerce that were the subject of the contract, and for other purposes.
The Senate already passed a similar bill, which now needs to be reconciled with the House bill. It’s likely that will happen. The FTC would enforce the Act if it does become law.
The Congressional action responds to the increase in efforts by businesses and corporations to prevent consumers from writing critical reviews. Some businesses in the health and hospitality industries have tried to preemptively silence potential criticism with non-disparagement clauses in their contracts or boilerplate terms.
While sites such as Yelp, AngiesList, TripAdvisor, Google and other publishers are not liable for the content of consumers’ reviews, individual reviewers have been sued for defamation. There is a case in California that is troubling and could chill reviews notwithstanding the legal protections above.
It involves a “default judgment” against a Yelp review writer who didn’t show up in court to defend a defamation case. Yelp was ordered to remove the disputed review, despite not being a party to the action, and the fear is that unless the California Supreme Court overturns the lower court decision, aggressive businesses could routinely threaten litigation to compel removal of unfavorable reviews.
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