“I’m gonna tell…[well actually nobody]” How Non-Disparagement Clauses are making us all a little quieter

Let’s pretend….

….that you ordered something online. Not something like a sweater or a new pair of boots. Let’s pretend it’s something that you really want (and can’t find anywhere else). Not only that, since you’ve come so close to getting one in the past – but weren’t able to – it gives you a stomach ache to even think about buying one now. “Am I going to get it this time? Am I going to be disappointed? Will I EVER get one?” Then, when you finally order one from the net…it doesn’t come. To make matters worse, you realize that the company you paid merely took your money. They didn’t send you what you ordered and ignored your phone calls every time you called to tell them what for.

Your next reaction? Social media baby. You go on websites like Yelp  and Ripoff report  and let them have it. (Those are just two Consumer complaint websites.  There are many out there) You might even call the Better Business Bureau. You’re angry. The company is a few states away – so getting your money back is a long shot. What you CAN do is protect the next unsuspecting sap who writes them a check, thinking that they are a legitimate business?

Fertility bridges

This is just what happened to a woman from New Jersey. She contacted a company named “Fertility Bridges” located in Illinois. The thing she wanted? A child. (Well, she wanted eggs from a donor. But, they were going to help her get a child). The problem is that the donor that she picked from their list got pregnant, herself and backed out. Unfortunately, once the donor backed out, the baby people just ignored the Jersey-girl. (Why they didn’t call her, apologize and say “Hey, we’ve got a ton of egg-donors. Why don’t you go back to the site and look for one. You made the payment. All you need to do is pick somebody else” is beyond us).

Editor’s note of caution: Maybe next week’s post will be entitled “how having awful customer service can lead to some consumer sight you’ve never heard of doing a blog post about how mean you are”

Upset that she didn’t have her eggs (or her money) our Jersey-girl set out to warn the masses that the baby people were acting in a way that did not jive at all with the pastel color-scheme and happy baby pictures that are plastered all over their website, where they claimed that they:

aim to be #1 in customer service by providing a nurturing and loving environment throughout the maze of fertility options and instituting plans to help bring baby home.


It seemed that there was a clause that the baby people had inserted into their “Terms of Service contract” that forbade the Jersey-girl from making public complaints about the experience. For when she did, she got an e-mail from the baby-people that said:

“You directly violated our legal agreement by attempting to post an online review. As such, we are setting the plans in motion for a multi-million dollar defamation case against you. . . . unless you withdraw your unwarranted BBB complaint or any illegal online reviews, we will proceed at lightening [sic] speed in a defamation case against you to minimize as much damage as possible. We have your signed legal agreement clearly stating you will NOT post online reviews.”

And caring….

If you at the e-mails that were sent from the baby-people this woman’s attorney, the threats and claims get funnier (or more horrifying, depending upon your perspective) as the e-mail string plays out.  All because she had the nerve to complain to the BBB after they took her money and told her to go pound salt, when the egg-donor backed out.

Jersey-girl’s conundrum was the fact that she had that non-disparagement clause in her contract and that the baby-people were going to use it to teach her a lesson. (Never mind the irony that they were willing to use napalm where a warm breeze might have worked; or that their whole vibe is that they are creating a loving, caring, nurturing – dare we say “family-like” environment to help childless folks navigate a very daunting landscape) Of course, one of the nuances of non-disparagement clauses is that you can treat people like garbage because you can legally muzzle them. If they tell anyone how you behaved, just write them a letter that says you’re gonna sue the bejeezus out of them.

Editor’s plug: The whole story can be found here. It was handled by the awesome folks at Public Citizen.  They are a non-profit that “advocates for a healthier and more equitable world by making government work for the people and by defending democracy from corporate greed” Now who wouldn’t love them?  Jump onto their website and you’ll see the various gears that make their machine go.  One of those gears, the litigation group, was responsible for saving our Jersey-girl.

What is a non-disparagement clause

Simply put, a non-disparagement clause is the seller’s way of saying that you (the buyer) are commanded to keep any fights, spats, complaints or negative feedback to yourself. If you write a post on the web that says anything other than “I love them and would recommend them to all of my friends because their product did everything they said it would – and more!” they can stop you.  This usually comes in the form of a fine.  (and remember, these people have your credit card number and a fancy contract that they can wave at your credit card dispute resolution department when you howl about the $3,500 charge that appears on your bill because you vented about them)

“Oh, they can’t stop me. I’ve got free speech, a keyboard and a router. I’ll type whatever I want!” That’s true; you can type whatever you want.  But, if those Terms of Service (that’s the screen where you click “I agree” before you can go ahead with your purchase) have a non-disparagement clause, you’re in for a fight. They can force you to take any dispute you have with them to arbitration (usually in a far-away land) or fine you for saying anything negative against them.

Who do non-disparagement clauses help?

(Not any of us that’s for sure) These clauses are purely a way for the seller to muzzle any negative feedback that they might receive.

The reality is that we all lose every time one of these clauses is upheld. Every one of us has a vested interest in being able to research the companies we’re gonna do business with. How else can we tell the bad guys from the good guys? Let’s look back at our Jersey-girl. If she was researching fertility places and could see that somebody else was given the same treatment that she was (egg-donor backs out; down-payment gone; company refuses to answer calls, return money or help in any way) she might have gone somewhere else. There’s something inherently wrong with a free-market system where the consumers are not allowed to complain if things go sideways.

“Read every contract that you sign”

This refrain is offered up as Consumer-advice 101; along with “Don’t sign anything that you don’t understand.” No doubt these are great pieces of advice. The problem is, in situations where non-disparagement clauses are common (purchases over the internet; software downloads or long-term consumer service contracts) they are a little tough to follow.

  • “Read every contract that you sign” If the contract is for home improvements and it’s two pages long, by all means, read that puppy. Search every word for an indication of when the work will be done; when you have to pay and what they are going to fix. But, if the contract is the 24 page Terms of Service that constitutes your cell phone contract, it’s not gonna happen. (not to mention that the contract changes every time they mail you the teensy-printed onion skin booklet they call an “update to our terms” OR that you are bound by those updates whether you agree to them or not)  If you actually read the Terms of Service, you are one in a million because almost none of us actually reads ToS agreements. 
  • “Don’t sign anything that you don’t understand” That’s a tall order. Again, we think this is great advice when the contract is not a ton of pages or is being slid across the table for you to look at. However, if you only see the contract when you bring it up in a separate window in your browser whilst you attempt to complete a purchase over the interweb – trying to understand all of its terms becomes a little more difficult.
  • “Never agree to arbitration/mediation/class action waivers” Angie’s list tells us not to agree to gag clause  But, it’s not that simple. You can try to cross out any terms that you don’t agree with. But, unless you click “I AGREE” on the proper screen, you’re not buying anything.

Is this legal?

“I mean, can they just take away my right to speak freely about how I was treated?” Yes, they can. It seems weird, yes? Weird, but legal. In an effort to justify non-disparagement clauses business owners complain that they are at a disadvantage if customers can just say anything on the internet. What they forget is that there are laws against lying about somebody in public. Business owners can sue any customer who lies about them. If they write it down – you can sue them for liable; if they say it out loud – you can sue them for defamation”  It’s a shame that this is even a thing.

The reality is that the internet has changed the way we all do business.  Years ago it would have seemed silly to send your money to a company you had never heard of, just because you saw a picture of the thing you wanted to buy.  I can hear us all saying “How do you know it’s not a scam?  What if they just take your money and go away?”  Now, it’s second nature.  We don’t care whether the “retailer” across the street or in a basement in Irkutsk – we’re getting a great deal!  The possibility that we are going to be paying for a bag of garbage (and will wind up being angry enough to type out our frustrations) is much higher when dealing with internet retailers.

Is there Hope?

If you are a consumer in California, you don’t have to worry, because non-disparagement clauses are illegal there.  For the rest of us, we’ll either have to wait for our State legislatures (or congress) to outlaw non-disparagement clauses. (or stop using the internet to buy or download anything)

There was also a bill introduced in Congress in May of 2015 that would outlaw non-disparagement clauses. Unfortunately, it suffers from the “makes too much sense so it probably won’t pass” rule.  Until it does, you’d better keep your disparagements to yourself.

Posted by: Mark Wiseman (who would have been a whole lot quieter growing up if his schools made him sign a non-disparagement clause)

I have to pay a fee if I don’t like you? (Non-disparagement clauses for internet purchases)

If you’re anything like 131 Million other Americans, you bought something on the internet on Cyber Monday.    It’s a good bet that many of those people will have a less-than-stellar shopping experience.  (They will receive the wrong size/color.  The item might not work, or just won’t arrive)  In any case, what can you do if your purchase doesn’t turn out well?  Yes, it’s more convenient (and probably cheaper) to order something on your PC, while you are still in your jammies.  But, returning an item to (or even finding a customer service rep from) a company that has an address in Wukaluk Alaska could be harder than you think.

Welcome to my nightmare

This is the new rock-bottom for consumers.  You have a brand new, non-functional, wrong-sized, ugly off-green thing-a-ma-bob and a charge of $89.95 to your credit card to go with it.  There’s a phone number on the website. But, every time you call it, the message says:  

Thank you for calling ‘Awesome Things,’ all of our customer service reps are busy handling other calls.  But, your business is very important to us – so, please feel free to leave a message.  We’ll get back to you as soon as we can.

You’ve left three messages and have sent a few increasingly aggressive e-mails, without any kind of response.  Your credit card bill is due and you want some justice. 

I can waive my rights?

You decide to bring your item and your story to your local Consumer Attorney to see what good a lawsuit will do.  Unfortunately, when the attorney sees the Terms of Service that is on the ‘Awesome Things’ website, he realizes that they include some terms that are not so favorable.  It seems that when you clicked ‘I AGREE’ to the Terms of Service to get into the order form part of the website you didn’t bother to see what the Terms of Service actually were.  What can clicking ‘I AGREE,’ mean?

    • Agreement to arbitrate: means that if you have any dispute, you give up your right to go to Court and present the case to a Judge.  Instead, your claim will be heard (most times through the mail) by somebody who makes their money hearing (a lot of) cases that are referred by the company that you have the beef with.  If they rule in the Consumer’s favor, they won’t get much repeat business.  How do you think you’ll do?
    • Jury trial waiver: means that you specifically give up your constitutional right to have a jury of your peers hear the facts and decide the case;
    • Choice of law clause: means that however the case is decided, it will be in the home state of the company that sold you the product – NOT where you live.  Sure it’s inconvenient to go all the way to Wukaluk Alaska to get your ninety bucks back.  But, you agreed!
    • Class action waiver: means that even though ‘Awesome Things’ has shafted thousands of people with the same disappearing-customer-service-rep trick; and even though letting them all join in the same case might be the only way to make them behave in the future, you gave up your right to do this, too.  

These are all typical in Terms of Service clauses.  Unfortunately, they are also legal and enforceable.   To be sure, some Courts don’t uphold those clauses.  But, getting to the point where a Court agrees with you (AND winning the inevitable appeal) can be very costly, time-consuming and an iffy-at-best proposition. 

I know what I’ll do…..

Aware that a lawsuit will be costly and risky (and smarting from paying $89.95 for a piece of garbage) you decide to embark on a smear campaign.  You’re going to let the world know how awful ‘Awesome Things’ really is.  So you go to a website for Consumers who want to vent about their experiences (like Ripoff Report) and fire up your keyboard – saying inciting things like “There is absolutely no way to get in touch with a physical human being,” and that they have “horrible customer service practices.”
Unfortunately, one of the other things that you agreed to was a ‘Non-disparagement’ clause.  If you’re not sure what this means, you’re not alone.  This actually happened to a couple who live in Utah.  The clause (which allowed the seller to charge them $3,500.00 for any violations) read something like this:

“In an effort to ensure fair and honest public feedback, and to prevent the publishing of libelous content in any form, your acceptance of this sales contract prohibits you from taking any action that negatively impacts Kleargear.com, its reputation, products, services, management or employees.”

Note of irony:  Consumer Courage digs the need for Kleargear.com to try to reduce the number of bad reviews about their company on the internet.  But, if their customer service is horrible, shouldn’t they fine themselves $3,500 for hurting their own reputation?

In any case, Kleargear.com hit them with an additional charge of $3,500.00 for violating the non-disparagement clause.  The consumers did what everyone reading this post would do (which is to tell them to pound salt).  So, Kleargear.com decided to up the ante and reported them to the credit bureaus for having an unpaid bill, which caused them all sorts of grief.  As the TV report makes clear, the negative credit report made it hard for them to get a car loan, sell their house, borrow money to fix their furnace (they had three heatless weeks, waiting to qualify for a loan), etc. 

There outta be a law!………

In fact there is.  Or, more appropriately, as you can see by this letter sent to the folks at Kleargear.com on behalf of the consumers, there are several.   The letter was sent by the wonderful people at Public Citizen’s Litigation Group

(Public Citizen is a DC-based non-profit that ‘serves as the people’s voice in the nation’s capital….since [their] founding in 1971.’  Their Litigation Group – which does incredible work for some people who can’t afford a lawyer, but need one anyway – functions as a public interest law firm that takes on special cases in various areas, including Consumer Rights and Internet free speech) 

The non-disparagement clause is outrageous enough.  But, Kleargear.com put the squeeze to the Consumers by reporting the so-called debt to the credit bureaus.  Those credit-bureau notifications opened them up for claims based on the Fair Cred it Reporting Act, the Fair Debt Collection Practices Act, and (ironically enough) Defamation.  Sadly, this case has unfolded the same way the majority of high-profile consumer cases do:

Consumer is wronged in some not-so-major way and complains to the source (using reason and logic) merely hoping that the corporation will just cut it out.  The corporation (exhibiting a lack of what some might call ‘minimal adult-supervision’) refuses to entertain anything close to an amicable resolution, while relying on a ‘gotcha’ mentality.  Consumer is forced to go to Court to fix what started out as a border skirmish, but has devolved into an all-out war.

At this point, the case is still at the ‘hate mail’ stage.  Stay tuned to see what happens.

“But, I HAVE to buy things off of the web.  What’ll I do? What’ll I do?

What can you do to prevent this from happening?

    • Read that agreement: conventional wisdom says to read anything you agree to.  True enough.  But, try clicking ‘DON’T AGREE’ and see how fast you get booted off of the ‘complete your order’ page.  (Research has shown that people usually spend around 6 seconds reading Terms of Service Agreements so you’re not alone if you never do);
    • Go to the store: If you are feeling brave, go to the store.  It might not be as convenient, but you won’t have to waive your Consumer rights, just to make a purchase;
    • Look for a trusted name: If you don’t recognize the name of the company you’re dealing with on the net, maybe you should slow down a little.  Do they have a reputation? Are they far away? Nationally known companies usually care about repeat business, so they have an incentive to keep you happy if things go bad.  Some place you’ve never heard of doesn’t much care whether you hate them or not, once they run your credit card numbers;
    • Search for Customer Service BEFORE you purchase: Try this test – call their customer service line before you buy something.  Is it a recording? Do they not call you back? Is it a voice-mail loop?  Do you think that any of these red-flags will go away once they have your money?;
    • Always use your credit card:  As opposed to debit cards, check-cards or gift certificates, most credit cards have dispute-resolution procedures to help the card holder who got shafted.  They will usually put a hold on the payment, while you haggle about your product;
    • Research: Here’s a website that rates Terms of Service Agreements for 77 companies that you might have heard of.  It won’t help if you don’t want to click ‘I AGREE.’  But, it might give you an idea about which company is better to deal with;

And, if you absolutely must review a company on the internet, for the love of mercy, use an alias!  By all means, tell everyone what happened.  But, if you don’t put your name and home town, it’ll be awfully hard for them to figure out just exactly who violated their ‘don’t tell anyone how much we stink’ clause (or whatever it’s called).

Posted by: Mark Wiseman (who makes everyone he meets sign an agreement not to disparage HIM. You know…..just in case)