The end is in sight for legislation that will make it illegal for companies to put so-called “gag orders” in their customer contracts to prevent customers from sharing their honest opinions with others, the website Consumerist reported on Monday.
On September 12, by a simple voice vote, the House passed the Consumer Review Fairness Act, a bipartisan bill that would void any non-disparagement clauses in consumer contracts and gave the FCC and state attorneys general authority to take enforcement action against businesses that attempt to use such clauses to silence the voice of consumers.
Similar legislation was passed unanimously in the Senate in December 2015. A reconciliation of the House and Senate bills is expected to pass easily and sent to President Obama, who has indicated support.
A number of businesses have inserted provisions into contracts and terms of service declaring that if the customer writes or says anything negative about the transaction–such as a review on Yelp–the company can seek damages.
The Consumerist reported the case that brought the issue into the spotlight involved a failed attempt by online retailer KlearGear to hit a customer with a $3500 penalty after she wrote a truthful but negative review of the company. A Texas petsitter sued a customer for $1 million after a negative review on Yelp.
Attorney Paul Alan Levy from Public Citizen, who was involved in both the KlearGear and Texas petsitter cases, told Consumerist the legislation was a win-win for both consumers and small businesses.
It’s good for small businesses, he said, “that do not need to paint a false picture of themselves by suppressing truthful criticisms in order to secure more customers, and for businesses harmed by competition from those businesses that do need to paint a fraudulent picture of themselves by using non-disparagement clauses.”