by Wendy Davis , Staff Writer @wendyndavis, November 29, 2016

Businesses will no longer be able to prevent consumers from posting bad reviews, under a new federal law.

The Senate Monday passed the Consumer Review Fairness Act by unanimous consent. The measure now awaits signature by President Barack Obama.

The bill invalidates standardized contractual provisions that restrict consumers' ability to post critiques. The measure also prevents companies from squelching criticism by asserting a copyright interest in reviews -- a technique pioneered by health care professionals earlier this decade. The Federal Trade Commission and state attorneys general are tasked with enforcing the law.

advertisement advertisement

Numerous advocacy groups backed the bill, as did review sites like Yelp. The bill comes several years after a highly publicized dispute between online retailer KlearGear and the married couple John Palmer and Jennifer Kulas, who reported that KlearGear attempted to charge them $3,500 for posting a bad review.

KlearGear reportedly said the couple violated a non-disparagement clause in its terms of service by criticizing the company on RipoffReport.com. (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 2015.

KlearGear, while perhaps the most famous company to try to squelch reviews, is hardly the only one to do so. Earlier this year, the Dallas-based pet-sitting service Prestigious Pets brought a $1 million lawsuit against a couple who gave the company a one-star review. Prestigious Pets alleged that its pet-sitting contract contained language prohibiting consumers from "taking any action that negatively impacts Prestigious Pets, LLC, its reputation, products, services, management, employees or independent contractors."

In August, Dallas County District Court Judge Jim Jordan dismissed Prestigious Pets' lawsuit and ruled that the company may also face sanctions.

The FTC weighed in against non-disparagement clauses last year, when the agency sued alleged in a complaint that the Sarasota, Florida-based Roca Labs engaged in an unfair practice by including a gag clause in its terms of service. A federal judge entered an injunction that bans Roca Labs from continuing to use those types of clauses, but that order isn't final.