Congress May Finally Outlaw “Gag Clauses” That Block Customers From Writing Negative Reviews

Image courtesy of Jennifer Moo

Last December, it looked like federal lawmakers were getting serious about so-called “non-disparagement” or “gag” clauses in consumer contracts that forbid customers from saying anything negative about a purchase or transaction. The U.S. Senate quickly passed a bipartisan bill that would outlaw the practice, but the legislation has idled in the House since. However, a new, virtually identical bill may finally be evidence of movement on this issue.

Late last week, Reps. Leonard Lance (NJ) and Joe Kennedy (MA) introduced the Consumer Review Fairness Act [PDF], which appears to be the same bill — except for the slightly tweaked name — as the Consumer Review Freedom Act [PDF] that passed the Senate in mid-December without even being debated.

Regardless of the name, if it’s passed without significant revisions or pork-barrel add-ons, would give the Federal Trade Commission and state attorneys general the authority to take enforcement action against businesses that attempt to use these ethically questionable clauses to quiet consumers.

We’ve shown you a number of non-disparagement clauses in the past, most notoriously the one involving online retailer KlearGear, which failed in its attempt to slam a customer with a $3,500 penalty after she wrote a truthful-but-negative online review of her dealings with the company.

Then there were the clauses used by sketchy cellphone accessory sellers, wedding contractors, landlords, makers of weight-loss products, and pet-sitters.

“Consumers in the 21st century economy should be able to post, comment and Tweet their honest and accurate feedback without fear of retribution,” explains Rep. Lance in a statement. “Too many companies are burying non-disparagement clauses in fine print and going after consumers when they post negative feedback online.”

Congressman Kennedy says that, by eliminating non-disparagement clauses, the Consumer Review Fairness Act would “ensure companies can never retaliate against customers for simply expressing an opinion.”

In 2014, in response to the growing use of these anti-consumer, anti-free-expression clauses, California passed a law outlawing their use.