WASHINGTON — U.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation, applauded the Senate’s unanimous passage of bipartisan, bicameral legislation that will outlaw the use of “gag clauses” in non-negotiable form contracts. Some businesses have attracted national scrutiny for using gag clauses to punish or silence honest criticism of products and services. Thune was the lead sponsor of the Senate version of the bill, and the final version now heads to the president for his signature.
“By ending gag clauses, this legislation supports consumer rights and the integrity of critical feedback about products and services sold online,” said Thune. “I appreciate the bipartisan efforts of my Senate and House colleagues to get this legislation over the finish line.”
The Commerce Committee held a hearing on gag clauses on November 4, 2015, featuring testimony from Ms. Jen Palmer, a plaintiff in Palmer v. KlearGear, where a company demanded the removal of a negative online review or payment of $3,500 in fines because the online merchant’s terms of service included a non-disparagement clause. When the review was not taken down, the company reported the unpaid $3,500 to a credit reporting agency as an outstanding debt, which negatively impacted the Palmers’ credit.
Thune and U.S. Sens. Brian Schatz (D-Hawaii) and Jerry Moran (R-Kan.) introduced S. 2044, the Consumer Review Freedom Act, in September 2015, and the Senate passed the measure unanimously last year. The Senate today approved the companion House version, H.R. 5111, introduced by U.S. Reps. Lance Leonard (R-N.J.) and Joseph Kennedy III (D-Mass.) earlier this year.