Maryland Bill Aims to Shield the ‘Right to Yelp’ for Consumers
The Maryland State House in Annapolis. Sean Pavone / Shutterstock.com
Similar legislation is pending in Congress. But California is the only place that has enacted a comparable state law.
Ensuring that consumers in Maryland can post critical reviews online about products and services they’ve purchased, without fearing that they’ll run afoul of obscure provisions in contracts and terms-of-use agreements, is the thrust behind a bill that lawmakers in the Old Line State’s General Assembly discussed on Wednesday.
Del. Jeffrey D. Waldstreicher, a Montgomery County Democrat who is the legislation’s lead sponsor, characterized his proposal as a “right to Yelp bill.” The legislation is designed to prohibit the enforcement of so-called “non-disparagement clauses” in consumer contracts.
Discouraging or preventing consumers from criticizing merchants online, and elsewhere, is widely seen as the intent behind such clauses. Critics have likened them to gag-orders that restrict free speech, and point to examples where consumers have been threatened with heavy financial penalties for posting unsavory Internet reviews of companies.
In one notable case, an online retailer called KlearGear.com tried to force a Utah man to pay $3,500 because his wife posted negative online comments about an order that was under $20.
In remarks before the Maryland House of Delegates Economic Matters Committee on Wednesday Waldstreicher made the case that consumers should be able voice honest feedback about their purchases without worrying about reprisals. “This is your right as a consumer, as long as you don’t lie or otherwise defame a company,” he told the committee.
“Unfortunately some corporations, large and small, are putting in their terms of service a flypaper contract term that says ‘you can’t Yelp about us, you can’t write anything online about us that may be in any way disparaging,'” he added. “This bill counters that.”
Failure to follow the terms of the legislation would be considered an unfair and deceptive trade practice under the Maryland Consumer Protection Act.
A first-time violation of the act can carry a penalty of up to $1,000. Further violations can result in fines up to $5,000. Those guilty of these infractions can also be convicted of a misdemeanor, which could result in up to a year of jail time.
The legislation currently has three co-sponsors, all of whom are Democrats.
Congressional legislation, which is similar to what Waldstreicher has proposed, passed by unanimous consent in the U.S. Senate in December. It has been referred to the House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing and Trade.
Waldstreicher said Wednesday that if the bill in Congress passes, and is signed by the president, he will withdraw the legislation he has introduced in Maryland.
According to an analysis of the Maryland bill, prepared by the General Assembly’s Department of Legislative Services, California is the only state that has enacted a law barring the enforcement of consumer non-disparagement clauses. That law was approved in 2014.
The KlearGear.com case involved Jennifer and John Palmer.
Jennifer Palmer posted a review on RipoffReport.com in 2009 about an order her husband placed with KlearGear.com for a key chain and a desk toy. The order had gone unfulfilled.
About three years later, in 2012, The company notified John Palmer that he had 72 hours to get the RipoffReport.com post removed, or otherwise he’d face a financial penalty for violating a “terms of sale and use” non-disparagement clause.
The couple eventually prevailed against KlearGear.com in court, with a judge awarding them $306,750 in damages in 2014. But, along the way, John Palmer at one point had his credit score marred when the company reported the $3,500 penalty as an unpaid debt.
Jennifer Palmer described the ordeal during testimony to a U.S. Senate committee last November.
During Wednesday’s committee meeting in the Maryland House of Delegates, none of the lawmakers on the panel took any hard swipes at Waldstreicher’s bill. Del. Christopher T. Adams, a Republican, did raise a question about what would happen if a consumer posted a false claim about a company online, or what he called an “untruthful Yelp.”
But Adams seemed satisfied after Waldstreicher told him that he’d had an amendment drafted, which was meant to clarify that the legislation would not prevent firms from taking action alleging that a statement made by a consumer is defamatory, or untrue.
“This bill, as written, does not protect untruthful statements,” he said.
“A disparaging statement is not a lie,” Waldstreicher added. “A disparaging statement is only a statement of dissatisfaction, or otherwise legitimate criticism.”
Bill Lucia is a Reporter for Government Executive’s Route Fifty.
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