Increasingly threatened by the prospect of bad reviews on Yelp and similar websites, some companies have a message for customers: Shut up — or else.
You might not know it, but you could be giving up your right to criticize a business publicly if it has a so-called nondisparagement clause in its terms of service.
Clicking "accept" or signing your name on the bottom line means you could be hit with thousands of dollars in penalties if you bad-mouth the company online or in any other venue.
"Companies use these unjust terms to bully dissatisfied customers into silence," said Scott Michelman, a lawyer with the consumer watchdog Public Citizen.
Now a bipartisan group in Congress — mostly from California — is proposing a federal law that would end such blatant corporate harassment nationwide and restore to consumers their right to free speech.
The Consumer Review Freedom Act was recently introduced by Reps. Eric Swalwell, D-Calif., and several others. It takes its cue from a law adopted by California last year.
The state law prohibits any contract that involves "waiving the consumer's right to make any statement regarding the seller … or concerning the goods or services."
Swalwell told me that nondisparagement clauses are showing up in more and more terms and conditions as a growing number of businesses recognize — and fear — the lasting influence of online reviews.
Their response, he said, isn't to improve their products or services but to slap a gag order on customers. Let's pause for a moment to appreciate the irony of companies denying people their right to gripe.
The Supreme Court's ruling in the 2010 Citizens United case allowed for nearly unlimited amounts of corporate money to be spent on political campaigns in the name of free speech.
The U.S. Chamber of Commerce strongly supported the court ruling, alluding to "the fundamental right to share thoughts, views, facts and ideas."
A prominent case involving nondisparagement provisions concerned a Utah couple who said the online retailer KlearGear.com had failed to deliver an order in 2008.
The couple criticized the company on the website RipoffReport and were subsequently told by KlearGear that they'd violated their contract and had to pay a fine of $3,500. The couple sued. A federal judge issued a judgment in favor of the pair last year after KlearGear failed to respond to the suit.
"These clauses would probably be seen as unconscionable and unenforceable if litigated more often," said Gary Neustadter, a law professor at Santa Clara University. "But very, very few consumers would litigate something like this."
Disclosure is key with these provisions. If the provision is clearly and prominently disclosed, says UCLA law professor Eugene Volokh, "that may well make it legal under existing law."
I also think it comes down to this question: What are they trying to hide?
Any company that wants to muzzle customers clearly believes it can't defend its actions. Such businesses should be exposed to the bright, disinfecting sunlight of public accountability.
David Lazarus is a Los Angeles Times columnist.
