On September 9, 2014, Governor Jerry Brown signed into law AB
2365, popularly referred to as the "Yelp" bill. The new
law, codified at California Civil Code section 1670.8, will
prohibit the use of "non-disparagement" clauses in
consumer contracts beginning January 1, 2015. This article provides
a brief summary of the law, its potential impact and ambiguities,
and practical tips for businesses to avoid its penalties and ensure
compliance in the coming year.
Summary of Cal. Civ. Code § 1670.8
The new law 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)(1). It will also be "unlawful to threaten or
to seek to enforce" such a provision, or to "otherwise
penalize" a consumer for making any such statement. Cal. Civ.
Code
