On September 9, California passed a law that will protect the right of consumers to share negative evaluations of a business without fear of a groundless lawsuit just to hush them up. Assembly Bill No. 2365 is a big step forward in allowing consumers to rate businesses on services such as Yelp without fear of reprisal. Public Citizen attorney Scott Michelman discusses the new law in this report.
This is the first law of its kind, Michelman says. The law prohibits non-disparagement clauses that some businesses routinely include in any customer service agreement to prevent the customer from making negative comments about the business. The law also provides a cause of action for consumers or public enforcement authorities to sue and recover money penalties from businesses that use clauses like this to punish consumers.
The law does not make companies powerless, Michelman points out. Section (e) of the bill permits a business to remove a negative comment “that it is otherwise lawful to remove.” The bill also preserves to businesses the right to sue for defamation when someone posts a false review just to harm a business. Michelman says that the use of non-disparagement clauses was becoming more common all the time, and clauses like these lead to bullying of consumers.
Whether non-disparagement clauses would otherwise be enforceable is a difficult question because there has been very little litigation on the subject. Courts will not enforce unconscionable provisions in contracts, but cases like this seldom come before courts. That’s one of the reasons for the California law.
Scott Michelman is an attorney at the Public Citizen Litigation Group, in Washington, D.C. His career as a public interest litigator has spanned a broad range of social justice and civil rights issues, including access to the courts, consumers’ rights, discrimination and selective enforcement, freedom of speech and press, habeas corpus rights, immigrants' rights, judicial secrecy, police misconduct, political protest, post-September 11 abuse of executive power, religious freedom, the rights of medical marijuana patients, sentencing law, and unreasonable search and seizure. The Legal Broadcast Network is a featured network of the Sequence Media Group.