Amazon's Non-Disparagement Clause Violates Consumers' Free Speech: Class Action

Defendants have a “significant incentive to minimize the negative publicity they receive,” including from negative online reviews and comments, said the complaint. Some companies are “contractually prohibiting customers and potential customers from posting negative online reviews and comments about the goods or services they offer, to the detriment of the consuming public and the State of California,” it said.

California Civil Code Section 1670.8 was enacted “to combat and prevent the negative side-effects of this business practice by protecting the right of consumers to voice their opinions, observations, and experiences about the products or services delivered by a company,” the complaint said. “Non-disparagement clauses go beyond an embargo on business-oriented ‘trade secrets,’ but instead represent an unreasonable limitation on individual freedom,” it said, citing a comment by former California State Assembly Speaker John Perez (D), author of Assembly Bill 2365, codified as California Civil Code Section 1670.8.

The California legislature “correctly determined that the freedom of speech and expression is especially important in the consumer context to keep the public informed and hold corporations accountable for the quality of the goods or services offered,” the complaint said. The code provides that a contract for the sale of consumer goods or services “may not include a provision waiving a consumer’s right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services,” it said. It also holds that it is “unlawful to threaten or seek to enforce a provision made unlawful under this section, or to otherwise penalize a consumer for making any statement protected under this section.” A contract provision inconsistent with Section 1670.8(a) is “contrary to public policy, and is void and unenforceable."

Visitors to Amazon’s platforms are informed they must agree to its conditions of use as a precondition to using and benefiting from the platforms, the complaint said. The “far reaching” conditions require a user to agree on behalf of themselves and household members who use any service under their account, it said. The conditions violate Section 1670.8 by stifling Californians’ right to free speech, their right to receive lawful discourse and to remain informed, the complaint said.

Amazon’s conditions hyperlink to a “non-exhaustive list” of trade names that users are prohibited from commenting on, including “Amazon Prime,” “Ring,” “Whole Foods,” Woot!,” and “Zappos,” the complaint said. Amazon’s business practice “is unlawful and is intended to unilaterally protect” its public image and “maximize commercial profits at the expense of the public’s right to make informed decisions as consumers,” it said.

Plaintiff Barbara Trevino, a Los Angeles County resident, accessed, used and completed transactions on Amazon platforms within the applicable statute of limitations period in California, the complaint said. In addition to Section 1670.8 violations, Trevino also asserts violation of the California Business & Professions Code under the Unfair Competition Law. The plaintiff seeks for herself and the class injunctive relief to prevent Amazon and its brands from continuing to include a “non-disparagement provision” in its customer agreement that contractually obligates them to withhold negative comments relating to Amazon’s business, services, partners, employees and other agents, the complaint said. She also seeks pre- and post-judgment interest and reasonable attorneys’ fees and costs. Amazon didn't comment Tuesday.