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Consumers Fight Back Against Contractual Non-Disparagement Clauses That Prevent Them From Criticizing Merchants


The U.S. Constitution’s first amendment, protecting the right to free speech, is one of the country’s most beloved statutes. This is particularly true with the rising prevalence of the Internet, which has provided a forum for people to broadcast their opinions (both good and bad) to the world. It is possible for the rights provided by this law to be waived, but only in certain circumstances, and any such waiver must meet with specific requirements. In most cases, any contract or term of service which requires a civilian to forfeit their free speech cannot be too restrictive.

A couple of different retailers have been faced with legal action in matters pertaining to non-disparagement clauses contained in their Terms of Service contracts. The first was a lawsuit involving KlearGear, an online retailer, and a couple living in Utah. When Jen Palmer posted a negative review of the company online, KlearGear demanded that the couple pay $3,500, alleging that the online review violated a “non-disparagement clause” in the site’s Terms of Sale and Use. When the couple refused, the company reported the $3,500 as “debt” to the credit reporting agencies. The result was that the couple’s credit history was destroyed, providing them with difficulties such as a delayed car loan, a denied application for a credit card, and weeks without heat because their furnace broke and they could not acquire a loan to buy a new one.

However, the $3,500 fine did not exist in KlearGear’s Terms of Sale and Use when the couple was dealing with the company in 2008. Rather, the contract had been updated, but any such updates made after the Palmers’ transaction with the retailer did not pertain to them.

More recently, a consumer who received a defective phone charger from Accessories Store was ignored when she wrote asking for a new one. Karen Murakami wrote again threatening to report them to the Better Business Bureau and to recruit help from her father, who she said was an attorney. Accessories Store finally responded that her threat “allows us to list your personal information with a collections agency for $250, as we will do in the next few days due to a breach of the … legally binding terms of sale. … There is an arbitration clause and a forum selection clause for NY so you have no recourse of any form.” Such language is a classic example of large companies using their leverage against individual consumers who do not have a team of attorneys at their disposal.

When Murakami replied that to give out her information would be a violation of her privacy, Accessories Store responded that, by replying, she had doubled her fine to $500.

The company’s Terms of Service state that “The following shall also constitute a breach of this agreement: sending any threatening or harassing email … or for any other purpose. … By using our website, … you agree that any breach of this agreement shall constitute liability in the amount of $250 plus any related costs directly or indirectly relating from any such breach.”

Murakami acquired legal counsel which determined that Accessories Store’s non-disparagement clause was too excessive to be enforceable. When Murakami’s attorneys contacted the company on her behalf, Accessories Store responded, but it also stopped threatening to take action against Murakami.

Our Chicago libel attorneys concentrate in this area of the law. We have defended or prosecuted a number of defamation and libel cases including cases representing a high profile athlete against a well known radio shock jock, a consumer sued by a large car dealer in federal court for negative internet reviews and videos, one of Loyola University’s largest contributors when the head basketball coach sued him for libel after he was fired, a lawyer who was falsely accused of committing fraud with the false allegation published to the Dean of the University of Illinois School of Law where the lawyer attended law school and the President of the University of Illinois.

Our Chicago defamation lawyers defend individuals’ First Amendment and free speech rights to post on Facebook, Yelp and other websites information that criticizes businesses and addresses matters of public concern. Our Chicago Cybersquatting attorneys also represent and prosecute claims on behalf of businesses throughout the Chicago area including in Schaumburg, and Palatine, who have been unfairly and falsely criticized by consumers and competitors in defamatory publications in the online and off line media. We have successfully represented businesses who have been the victim of competitors setting up false rating sites and pretend consumer rating sites that are simply forums to falsely bash or business clients. We have also represented and defended consumers First Amendment and free speech rights to criticize businesses who are guilty of consumer fraud and false advertising.

Super Lawyers named Chicago and Oak Brook business trial attorneys Peter Lubin and Vincent DiTommaso Super Lawyers in the Categories of Class Action, Business Litigation and Consumer Rights Litigation. Lubin Austermuehle’s Oak Brook and Chicago business trial lawyers have over a quarter of century of experience in litigating complex class action, consumer rights and business and commercial litigation disputes. We handle emergency business law suits involving injunctions, and TROS, defamation, libel and covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud or defamatory attacks on their business and reputations.

Lubin Austermuehle’s Aurora and Schaumburg defamation and libel attorneys have more than two and half decades of experience helping business clients unravel the complexities of Illinois and out-of-state business laws. Our Chicago business, commercial, class-action and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Oak Brook, near Lombard and Wheaton, we serve clients throughout Illinois and the Midwest.

If you are the victim of a defamatory attack on your business or a consumer who has been sued to stop you from posting criticism of a business on line at Yelp or anywhere else, contact one of our Oak Brook and Chicago defamation lawyers for a free consultation at (833) 306-4933 or online by filling out our contact us form.