A proposed bill introduced this week by Congressman Eric Swalwell (D-Dublin) would make it illegal for businesses to penalize customers who write negative reviews on Yelp or other online review sites.
Called the Consumer Review Freedom Act, Swalwell said the bill was motivated by several examples of companies attempting to dissuade people from writing honest reviews by slipping non-disparagement clauses in their consumer contracts.
Co-signing the proposed bill was fellow Democratic Congressman Brad Sherman of San Fernando Valley's 30th Congressional District.
"No country that values free speech would allow customers to be penalized for writing an honest review," Swalwell said. "I introduced this legislation to put a stop to this egregious behavior so people can share honest reviews without fear of litigation. I look forward to advancing this in a bipartisan manner, and protecting the right to speak one's mind."
According to Swalwell, the Palmers, a couple from Utah, were fined $3,500 by KlearGear for violation of a non-disparagement clause after they posted a negative review online about their experience with the company. When they refused to pay, the company in turn reported their debt to the credit bureaus, which damaged their credit rating.
Swalwell's legislation would declare such non-disparagement clauses in consumer contracts unenforceable, in addition to providing authority to the Federal Trade Commission and state attorneys general to take action against businesses that include them.
Last week, Governor Jerry Brown signed into law a bill making non-disparagement clauses illegal in California unless their right to share their opinion was "knowingly, voluntarily and intelligently" waived.
The legislation is also co-sponsored by Democratic Congressmen Steve Cohen of Tennessee and (D-Tenn.) and Tony Cárdenas, also from the San Fernando Valley and representing the 29th Congressional District.
Others supporting the measure are Public Citizen, Yelp, Consumers Union, Trip Advisor, Consumer Federation of America, Public Participation Project and the National Consumer Law Center (on behalf of its low-income clients).
"The Consumer Review Freedom Act will ensure that consumers have the freedom to express their candid and public feedback on companies," explained Robert Weissman, president of Public Citizen, an early supporter of the bill.
"Hidden contract terms should not be used to bully consumers into silence," he added. "This measure not only will protect consumers who review businesses, but also safeguard the flow of information to other consumers who rely on reviews to figure out which businesses to patronize."
The bill has been referred to the House Committee on Energy and Commerce.