Last Friday, I wrote about a new California law that provides that a contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer’s right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services. Cal. Civ. Code § 1670.8(a) (new).   I raised several interpretational questions regarding the law.  I was not alone.  In this post, UCLA Professor Eugene also saw problems with California’s new law, wishing “that the legislature were more careful in having crafted the law in the first place.”

Just yesterday U.S. Representatives Eric Swalwell and  Brad Sherman, both Democrats from California, introduced the Consumer Review Freedom Act, H.R. 5499.  This law would similarly void and declare unlawful form contract provisions that prohibit or restrict the ability of a person to engaged in a covered communication.  A “covered communication” is “a person’s written, verbal, or pictorial review, performance assessment of, or other similar analysis of, the products services or conduct of a business which is a party to the form contract.”  This bill would vest enforcement in the Federal Trade Commission and state attorney generals.

While similar in intent, the federal bill does differ in some significant respects.  Significantly, the federal bill addresses the interpretational problem that I identified in California’s new statute.  The federal bill provides that it must not be construed to affect “any civil action for defamation, libel, slander, or any similar cause of action.  The federal bill, unlike California’s new statute, is not limited to contracts for the sale or lease of consumer goods or services (putting a lie to the title of the law).  The federal bill also void exclusive license provisions, a problem unaddressed by the California law.  Finally, the federal bill’s definition of “covered communication” appears to be limited to speech relating to the business.  California’s law, in contrast, extends to “any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.”

Although I and others use the term “non-disparagement” to describe this type of legislation, neither the federal bill or the California law actually employs the term “disparagement” or “disparage”.  The term is derived from desparagier, an Old French word meaning to take down in rank.