There’s a disturbing trend emerging across the water and it’s something I’d never heard of before. Apparently, companies in the US are inserting provisions into their contracts with customers that prevent them from making any statement about the company or its goods and services.
In effect, they are getting customers to sign away their right to write reviews or complain about the service they are getting. Sounds pretty bizarre, doesn’t it? After all, most people would consider it fair enough that if you pay for a product or a service and it doesn’t meet your expectations, you should be allowed to make your feelings known.
Not so in the land of the free. To its credit, California has just introduced a law aimed at stopping companies from using contract clauses to gag customer from criticising their service. Assembly Bill No. 2365, signed into law by Governor Jerry Brown on 9 September 2014, imposes civil penalties on any organisation that tries to muffle customer dissent with a $2,500 fine and $5,000 for each subsequent violation. While the penalties don’t appear very stringent, the bill does at least set a precedent. In any case, no company or organisation should want to be forced to pay a cheque to someone who has criticised its performance.
An interesting article in Forbes looks at some cases where organisations had used such clauses to stop customers complaining, ranging from hotels to doctors and dentists. One of them involved a company called Kleargear which charged two customers $3,500 for writing a negative report about its service, claiming they had violated an anti-disparagement clause in its terms and conditions.
When the customers refused to pay, Kleargear reported the fine for collection and their credit rating was affected. In December 2013, the customers launched a federal lawsuit charging the company with violating the Fair Credit Reporting Act, defamation and intentional infliction of emotional distress. In June 2014, they were awarded damages of $306,750.
The list of businesses that have tried to suppress negative reviews or complaints makes for interesting reading but it’s notable that this isn’t a new trend. One of the earliest offenders in this regard was a software vendor, Network Associates, which had a clause in the 1990s that prohibited users from publishing reviews of its product “without prior consent” from the company.
It’s a fascinating issue and it will be interesting to see what develops in the future. Will other states follow California’s lead? Will any companies try to enforce similar gagging clauses on this side of the Atlantic? Is there anything to stop them from doing so? Let’s hope so, just in case some people start getting ideas.
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