California Outlaws Consumer-Silencing Non-Disparagement Clauses
from the seeking-redress-in-form-of-head-punching-tabled dept
In one state, at least, non-disparagement clauses like the one KlearGear tried to use to extract $3,500 from unhappy customers, will be illegal. California governor Jerry Brown has just signed a bill that will prevent companies from silencing customers with non-disparagement clauses buried in Terms and Conditions pages.
Here’s the relevant text of the bill:
(a) (1) A contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer’s right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.
(2) It shall be unlawful to threaten or to seek to enforce a provision made unlawful under this section, or to otherwise penalize a consumer for making any statement protected under this section.
(b) Any waiver of the provisions of this section is contrary to public policy, and is void and unenforceable.
Violating this could result in a fine of $2,500 for a first violation (up to $10,000 for “flagrant” violations), which unfortunately means KlearGear (which is specifically referenced in the discussion of the bill) would still net $1,000 — at least the first time it gets away with it. (Which it hasn’t, and apparently never will — that clause has been removed from its website. Also, no one can seem to find an actual human being connected to the company selling so much stuff it can barely be described in a ridiculous press release.) Since most companies aren’t willing to charge the equivalent of a low-end used car for negative reviews, this bill pretty much ensures no one will be seeking to enforce non-disparagement clauses in California. Simply having the clause — even if it’s never enforced — could result in a fine.
This is a win for consumers, at least as far as it can be enforced. As has been noted here, there’s more than a few companies combining crappy service with hefty fines that don’t seem to actually exist outside of a Mailboxes, Etc. addresses. Laws are tough to enforce when you can’t find anyone to hold accountable. The worst part is that by the time most consumers discover they’re dealing with a company that will charge them for negative reviews, these companies already have their credit card information and can start adding these charges to their balances.
The good news is that it’s illegal in this state. Preemptive action can be taken to uncover these illegal terms and conditions in order to either push the companies towards complying with the state law or (better) getting them to drop these clauses altogether.
A law preventing these is good, and there needs to be more of them, but the best steps are still preventive. Plenty of sites keep an eye out for consumers and are usually the first to call out this behavior. Enough public outcry and these sites are either blackballed or shuttered completely. The threat of enforcement may be enough to deter some behavior, but when it comes down to it, the entity that best serves the public’s interests is still the public.