California "Yelp Law" Shields Online Reviewers

Go ahead and slam whatever you want online ..... at least in California

Sept. 14, 2014 7:24 p.m. ET, from the Wall Street Journal

Under a new California law, companies could be slapped with thousands of dollars in fines for trying to punish consumers for writing negative online reviews.

The so-called Yelp Law makes it unlawful for a company to insert a provision into a consumer contract that waives the right to make "any statement" about the goods or services purchased. The statute makes it illegal to try to enforce such a provision or otherwise penalize a consumer for a review.

Companies that disobey the law could face fines of up to $5,000. The maximum penalty is $10,000 for willful, intentional, or reckless violations. The law doesn't prevent a company from bringing a defamation lawsuit accusing a consumer of lying about a company product or service.

Scott Michelman, a lawyer with Public Citizen, a nonprofit consumer-advocacy firm, said he believed California was the first state with such a law. Gov. Jerry Brown signed it into law Tuesday.

Yelp, which is urging states to pass similar consumer protections, praised its passage.

"From time to time we hear about businesses that are so afraid of what their customers might say about them that they sneak clauses into consumer contracts designed to forbid their customers from saying anything bad about them on sites like Yelp," Laurent Crenshaw, a lobbyist at Yelp Inc., wrote in a blog post.