Today, Public Citizen client Jen Palmer told the U.S. Senate Committee on Commerce, Science, and Technology the story of her ordeal involving KlearGear.com's attempt to fine her family $3,500 and subsequent reporting of a phony debt to ruin the Palmers' credit based on a non-disparagement clause. You'll recall we succeeded in fixing the credit problems and obtained a default judgment against KlearGear for more than $300,000. In addition to Jen's testimony to the Committee today, I submitted written testimony on behalf of Public Citizen addressing the scope of the problem, the harms caused by non-disparagement, and examples of cases we've litigated or learned of.
Jen received a warm reception from the Committee; all the Senators who spoke at the hearing (by my count, about 10) expressed sympathy for her plight and support for federal action to ban non-disparagement clauses.
Now pending in the Senate is a bill to do just that, backed up by federal and state enforcement authority. The current version of the bill has a troubling clause limiting the ability of state attorneys general to engage private counsel to help enforce the prohibition, but two of the bill sponsors stated on the record at today's hearing that this provision would be removed at markup, scheduled for later this month. When the provision is removed, Public Citizen will support the bill.
There is a complementary bill in the House, as we've noted previously and which Public Citizen already supports (this bill lacks the problematic enforcement limitation). Both the Senate and House bills are known as the "Consumer Review Freedom Act" and both have bipartisan sponsorship.
California has already passed a state law prohibiting non-disparagement clauses and providing a private a private right of action for consumers.
We hope Congress acts to prohibit non-disparagement clauses, which chill consumer speech, restrict the exchange of information and ideas among consumers, and punish honest businesses by enabling their unscrupulous competitors to scrub the internet of negative reviews. Stay tuned.