Maryland Lawmakers Seek To Ban Online Gag Clauses

Thin-skinned business owners in Maryland could find it harder to squelch bad reviews, if a bill introduced this week is enacted.

The proposed H.B. 131, modeled on a similar law in California, outlaws non-disparagement clauses -- contractual terms that restrict consumers' right to comment on the business. The measure comes as Congress is considering whether to prohibit those kinds of clauses nationwide.

In the last several years, several companies have sparked national headlines by taking aim at customers who wrote unflattering reviews. One of the most famous examples occurred in late 2013, when married couple John Palmer and Jennifer Kulas said the online retailer KlearGear tried to charge them $3,500 for posting a bad review. KlearGear reportedly said that the couple violated a non-disparagement clause in its terms of service by criticizing the company on (That clause apparently was added to the KlearGear's terms of service after the couple tried to place an order.)

When Palmer and Kulas refused to pay KlearGear, the company allegedly wrecked their credit. Palmer and Kulas subsequently sued KlearGear for violating federal fair credit laws. A federal judge awarded the couple $306,750 in July of 2014.

Bethesda Magazinereports that there are no known examples of Maryland businesses trying to use a similar tactic to squelch consumer reviews.

But that doesn't mean it hasn't happened.

The digital rights group Electronic Frontier Foundation -- which supports the bill but wants to see it strengthened -- makes that point in its comments. "For every high-profile story of a customer fighting back against this unfair business practice, there are many more stories we’ll never hear: stories of customers who simply gave up under a company’s pressure to pay a fine or delete a review," the group says in written testimony submitted to Maryland lawmakers. "Because legal gray areas are fertile ground for legal bullying, the law should make it clear that customers have every right to speak their mind, even if a company’s form contract says otherwise."

The EFF also is pressing lawmakers to prohibit companies from claiming a copyright interest in reviews.

That strategy was pioneered by the organization Medical Justice, which advised health care professionals to require prospective patients to sign away a copyright interest in any online review. Then, if a patient criticized a doctor on a review site, the doctor could threaten to sue the site for copyright infringement.

U.S. District Court Judge Paul Crotty in Manhattan recently condemned that tactic, but it's not clear whether other judges will follow suit in similar situations.

Crotty's decision stemmed from a dispute between dentist Stacy Makhnevich and one of her former patients, Robert Lee.

The dentist allegedly charged Lee more than $4,000 for a tooth filling, and then failed to turn over the records that would enable him to file an insurance claim. Lee wrote about his experience on Yelp and DoctorBases. The move allegedly prompted Makhnevich and her dental practice to claim that they owned the copyright to his reviews.

Makhnevich not only demanded that the Web sites take down the posts, but also sent Lee invoices of $100 per day for the posts.

The advocacy group Public Citizen then represented Lee in a lawsuit against Makhnevich, who defaulted in the matter. Last year U.S. District Court Judge Paul Crotty in Manhattan ruled that Makhnevich's copyright agreement with Lee was invalid for a host of reasons, including that it's unethical. Crotty also said that even if Makhnevich owned a copyright in the reviews, Lee would have a “fair use” right to post them on sites like Yelp.

Next story loading loading..