Signed into law yesterday by Governor Jerry Brown, California Civil Code Section 1670.8 now 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.
This statute comes with a fine of up to $2,500 for the first violation, up to $5,000 for the second and subsequent violations, as well as up to $10,000 for a willful, intentional, or reckless violation.
Software product EULAs are sometimes used to forbid negative reviews, and while this is not mentioned specifically in the text of the law, it is a fairly reasonable argument to think that this provision will apply there as well as in places like Yelp.com.
This law only applies in California, not in other states, or in other nations. Even so, it is a step in the right direction.
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[More After the Break]
(Score: 4, Insightful) by Thexalon on Monday May 11 2015, @01:14PM
When I see clauses like this in a contract, I know for sure the company is fully planning to screw me over. Another good indication of that is a binding arbitration clause where the company has chosen the arbitrator already.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 3, Interesting) by ikanreed on Monday May 11 2015, @01:32PM
I'm so glad you know that every company you could possibly deal with is planning to screw you over. That doesn't help you find products and services you need.
(Also, one more you missed in the trifecta of legal bullshittery is reserving the right to change the contract)
(Score: 0) by Anonymous Coward on Monday May 11 2015, @01:44PM
You checked every single company he could possibly deal with?
(Score: 2) by Dunbal on Monday May 11 2015, @01:46PM
To be honest every single company does screw you over but usually it's built in to the price and there's no need to go above and beyond that.
(Score: 5, Insightful) by ikanreed on Monday May 11 2015, @02:07PM
Look, if you sign a contract with a corporation in the US, you've been screwed. That's just how one sided contracts work.
(Score: 2) by isostatic on Monday May 11 2015, @11:22PM
Well if it's a whore-bouse, win-win!
(Score: 1) by anubi on Tuesday May 12 2015, @04:48AM
I have seen way too much of this "businesstalk". Its my biggest quencher of any enthusiasm to do business. Its the equivalent of looking like you are casing the place for an after-hours shopping spree during an interview.
I research places like Yelp.com and RipoffReport.com and ask around the neighborhood for references. Most printed ads just go in the trash can ( exception being trade magazines). Telephone solicitions go unanswered. Television simply no longer received. Door to door is always met with angry response, as I am usually not home unless I am sleeping, having a meal, using the toilet, or personal affairs and none of those is a good time for an interruption. God knows how much I would like to train a German Shep to pee on their shoes upon signal.
A reputation is the only thing a business has going for it. I end up doing business most of the time through word of mouth from friends and neighbors. If the first I see of that business is all sorts of "businesstalk", far more harm was done to their reputation just by my seeing it. Personally, I would think I would make about the same impression if I asked to be held harmless from watching porn on company time, and put that in my resume.
How businessmen can produce such a document and present it to a customer is beyond me. Often the very first words a prospective customer hears is all sorts of gobble-de-gook about "with qualifying service", "up to", "when purchased with something else", "just pay separate shipping and handling", and is left how many hundreds of dollars of trumped-up charges the company will levy on their credit card.
When I get one of those documents, I had just as soon cover it in feces and return it.
Personally, I am very pleased that the State of California has seen fit to pass this legislation. Its very one-sided to allow businesses the services of all these credit reporting agencies ( TRW, Equifax, TransUnion, Experian, and countless insurance/medical databases ) yet deny the consumers to keep track of honest businesses.
It costs money to do the job right, and without watchdogs, businesses will take the money and run, thinking a good advertising campaign will get them a steady stream of suckers.
Everyone is accountable for what they do. No exceptions.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 0, Offtopic) by Ethanol-fueled on Monday May 11 2015, @01:38PM
Good, good, California passes a good law for a change -- Now if only we could stem the tides of illegals leeching our healthcare resources and ruining our public education all so that the Democrats can have a few more votes.
(Score: 5, Insightful) by rts008 on Monday May 11 2015, @01:56PM
You make an excellelant point.
I guess I am just more cynical, because I use the 'shotgun' approach, and initially assume that all of them are out to screw me over. After more than 5 decades, experience has hammered into my skull that this is the only rational approach. The very few times that I have experienced exceptions to this, those companies/businesses have gained a loyal customer.
Pro-tip for companies/businesses wanting 'brand loyalty':
Show some honest customer loyalty, and it brand loyalty will be rock-solid without having to spend gazillions on marketing and advertising...your customers will gleefully advertise and market for you.
You{business) killed brand loyalty with that whole 'you are a consumer, not a customer' campaign.
Customers have brand loyalty, consumers look for the best bargain. Look at the root/base of those two words...it is very telling.
The only time I even came close to 'consuming' music was back in the 1970's, when I 'tasted the music' on an acid-trip. It was two hits of 4-way windowpane, and Santana 'tasted' so yummy that weekend! But, when the trip ended, I still had the LP, it was not consmed...I did not have to fish it out of the toilet and clean the shit off after it had passed through my digestive system.
(Score: 1, Interesting) by Anonymous Coward on Monday May 11 2015, @02:15PM
Customers have brand loyalty, consumers look for the best bargain.
Those are two strategic choices for companies in almost any retail segment. For example, Bloomingdale's goes after the first one, Wal-Mart the second.
(Score: 3, Interesting) by infodragon on Monday May 11 2015, @05:01PM
Bloomingdales is only different from Wal-Mart in one way. Bloomingdales wants you to consume their brand, Wal-Mart wants you to consume as much as possible in their store. Both see you as a consumer, one sees you as consuming a brand the other sees you as consuming whatever is the cheapest. Both care about only one thing, the bottom line!
Don't settle for shampoo, demand real poo!
(Score: 2) by Thexalon on Monday May 11 2015, @02:20PM
My point is that these contract clauses make it clear that they screw people over enough to be planning ahead for the likely litigious aftermath. That suggests that they'll do more than overcharge or provide shoddy service (that is just to be expected).
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by Grishnakh on Monday May 11 2015, @03:55PM
The problem is almost every company out there will happily screw you over if they can.
(Score: 0) by Anonymous Coward on Monday May 11 2015, @09:56PM
Companies are composed of people. There are many people that will happily 'screw you over'. There are also many honest people. Likewise honest companies exist as well. You have mechanics that are crooks and you have a few good mechanics as well. Some mechanics don't do work on your car that they know are unnecessary but they do charge you more for the work they do. Likewise there are wealthy and expensive mechanics that are make a lot of money simply because they're just very good at what they do and there are people willing to pay a high premium to ensure the car is fixed right the first time without having to come back because their time is very valuable to them. I see little wrong with that. It's free market capitalism.
Some of the examples of relatively good big companies (though some of that maybe changing) include
Triple A (member owned)
Costco (If I understand correctly they promise their customers only a 13 profit margin)
Costco employees tend to be well paid (though Costco may try to get away with contracting with companies that benefit Costco but have lower paid employees (ie: CDS)).
Google
UPS (freight)
and the idea that everyone with a contract is out to scam you is a bit overrated (though I would refuse to sign a gym contract after being screwed by one, hahaha, but that's a long story).
(Score: 0) by Anonymous Coward on Monday May 11 2015, @10:09PM
[Citation Needed]
(Score: 4, Insightful) by Anonymous Coward on Monday May 11 2015, @01:52PM
Now if only they would make it illegal to ask someone to give up their access to the justice system...
(Score: 4, Interesting) by MrGuy on Monday May 11 2015, @02:29PM
So, this is a step in the right direction, but I wonder what relationships it will actually apply to.
I could see this applying in any of three ways (IANAL, so maybe there are more):
1. Contracts made with consumers in California for sales activity in California.
2. All contracts made by companies with operations in California
3. Any contracts governed by the laws of the state of California.
2 would potentially be the best for the most consumers, but seems least likely to be the case - it's not clear California can legislate operations outside CA . 1 is much more likely (setting conditions on items offered for sale in California or any other state has a lot of precedent behind it).
However, I wonder if companies will be able to get around the restriction by reading the rule like 3 (contracts GOVERNED by the laws of the state of California). Many EULA's already contain governing law and choice of venue clauses ("This Agreement shall be governed by and interpreted in accordance with the laws of the state of xxx" and "Any claim or dispute arising in connection with this Agreement shall be resolved in the federal or state courts situated within xxx"). I wonder if this gives companies a near-complete "out" from these restrictions - simply ensure your governing law clause is for a state other than CA, and the CA rules don't apply...
(Score: 2) by hendrikboom on Monday May 11 2015, @02:37PM
At least there are now lots of California high- tech corporations specifying that (presumably for their convenience) the laws and courts of California apply.
(Score: 3, Interesting) by VLM on Monday May 11 2015, @03:13PM
As an opposing anecdotal data point, if you want to startup with VC funds you're pretty much "required" to incorporate in Delaware even when you operate in CA.
"required" in quotes as in not all will demand it, but pissing off the hand that feeds you is probably a bad idea. Also it costs money to re-incorporate in a new state (such as DE) so you may as well just start out there. Also "most" corporate law lawyers don't really understand Montana corporate law but learned Delaware corporate law because thats where the corporations are (aside from family farms, etc) so unless you have a really good reason to incorporate in Idaho, you'd best go to DE.
From memory of my "starting business" ideas the primary effect of DE registration is you pay $75/yr for an agent to represent you physically in DE, and there's some fuzzy stuff about sales tax (you're now based in CA and DE and pay franchise tax to DE or something). Also there's something hilarious about DE has two ways to bill franchise tax and they always send out an invoice with whichever is more expensive, so its a traditional song and dance to get a bill for $100K based on 10 cents per share or some formula like that, and then request the alternative invoice of percent of (something) which usually works out to like $90/yr. Also when you're small you don't have enough money to afford justice so you'll have to settle out of court for the other guy every time, and once you're big enough to afford justice you'll mostly be bullying people who can't afford justice so it doesn't really matter where you're incorporated or under which state laws, this is a country of might makes right and whoever has more $ tends to win. Also your state, not only CA, will probably require a biz license type paper from the state you're actually in, which you'd require anyway but there might be a different checkbox for your lawyer to check for out of state corporation. My plans never worked out so I never pulled the trigger and incorporated and got to work, but this was from "serious research" level analysis just a step or so short of hiring a lawyer and telling him to do it.
(Score: 5, Interesting) by Techwolf on Monday May 11 2015, @02:45PM
MS Windows had a clause that prevents anyone from posting performance reviews. Will this law now allow newspapers and magazines to publish performance tests of windows? I remember that it was forbidden to publish any filesystem performace test for windows.
(Score: 0) by Anonymous Coward on Monday May 11 2015, @02:45PM
I suspect there may be some unintended consequences of this law, as clever lawyers (or their clients) invoke the act to get around some contract provision in a field that doesn't resemble retail sales.
For example, when a CEO or EVP is fired, often they are given a golden parachute with a non-disparagement clause. That particular circumstance probably isn't covered by this law, but there might be other non-disparagement clauses that could be.
(Score: 0) by Anonymous Coward on Monday May 11 2015, @07:02PM
Almost all executives in large companies operate under a "services contract". If that contract is bound by the laws of California I would imagine this new law would apply to it.
(Score: 2) by gman003 on Monday May 11 2015, @02:53PM
It's good that there's an actual penalty for this, rather than just making such clauses unenforceable. Keeps people from putting it in there anyways, knowing that most people aren't going to know that it can't be enforced.
But those penalties better be per-instance, not just per-contract. By which I mean if they make 100 sales with a term like that in the contract, it better be a total fine of $250,000, not $2,500. The latter is chump change to anyone big enough to care enough to put a clause like that in their contract. It needs to scale with how many people are being affected by the bullshit contract. The law unfortunately isn't explicit on that matter, and probably relies on a definition of "contract" that I, as a non-lawyer, am not familiar with.
(Score: 3, Interesting) by MrGuy on Monday May 11 2015, @03:03PM
So, specifically outlawing reviews is out.
What about confidentiality agreements? These are used in a wide range of contracts for a wide variety of reasons. NDA's are in widespread usage.
Is there wiggle room for companies to reword the "no bad reviews" clause as an NDA or confidentiality agreement, where sharing details of your experience in general is forbidden (i.e. something WIDER than a strict prohibition on online reviews)? A law forbidding NDA's or confidentiality agreements would be highly problematic and massively impactful for a wide range of contracts that AREN'T ELUA's....
(Score: 2) by scruffybeard on Monday May 11 2015, @04:53PM
The law is addressing consumer goods and services. In my experience, NDAs are used in business-to-business or employment related agreements to protect trade secrets. I don't think that they would be affect by this situation.
(Score: 0) by Anonymous Coward on Monday May 11 2015, @06:19PM
Well, even if you could legally force all customers/consumers to sing an NDA (which i doubt), i would like to think that, people are not THAT stupid.
(Score: 2) by maxwell demon on Monday May 11 2015, @08:43PM
Solo or in a choir? :-)
The Tao of math: The numbers you can count are not the real numbers.
(Score: 4, Funny) by cafebabe on Monday May 11 2015, @08:56PM
NDA (sung to the tune of Happy Birthday):-
1702845791×2
(Score: 1, Interesting) by Anonymous Coward on Monday May 11 2015, @07:22PM
I think this is a step in the right direction, but it makes me
wonder how it could be made more general. Some mechanisms such
as copyright depend on speech being alienable--you sell exclusive
rights to your novel, you can't sell it again.
OTOH, we could go further. We could, and IMHO should, outlaw
gag orders. If you win a suit against a corporation, you shouldn't
have to be quiet about the details. Then there's the pesky issue of
"national security", real or imagined...
(Score: 2) by MichaelDavidCrawford on Tuesday May 12 2015, @06:50AM
you're thinking of settlements.
I have some lawsuits in mind; in each case I'm contemplating suing for one dollar in damages. That's to send the message that I won't settle. I want a jury judgement, as well as a judge's written opinion, and precedent.
Rather worse than the mutual silence enforced by settlements, is that settlements do not create precedent. That's why so many respondents are so quick to settle. We'd all be a lot better off if we refused to accept settlements.
Yes I Have No Bananas. [gofundme.com]
(Score: 2) by MichaelDavidCrawford on Monday May 11 2015, @10:14PM
Filter error: Comment too short
Yes I Have No Bananas. [gofundme.com]
(Score: 2) by kaszz on Tuesday May 12 2015, @12:03AM
A small step for California, a micro step in the right direction as seen by others ;)
So welcome to the sane world :P