by Evan Mascagni
Non-disparagement clauses are making a lot of headlines these days. Just last month, a federal judge ruled against Donald Trump’s 2016 presidential campaign and held that a broad non-disclosure agreement that the campaign required employees to sign was unenforceable, and that there were problems with the non-disparagement clause in the agreement.
The case at issue involved a former campaign staffer who accused the Trump campaign of sex discrimination, and who had previously been ordered to pay $50,000 to the Trump campaign for violating the non-discosure agreement (that order was later overturned).
In his opinion, U.S. District Court Judge Paul Gardephe noted that:
The Campaign’s past efforts to enforce the non-disclosure and non-disparagement provisions demonstrate that it is not operating in good faith to protect what it has identified as legitimate interests,” the judge added. “The evidence before the Court instead demonstrates that the Campaign has repeatedly sought to enforce the non-disclosure and non-disparagement provisions to suppress speech that it finds detrimental to its interests. (emphasis added.)
Powerful interests using non-disparagement clauses to suppress speech are nothing new. From a hotel that threatened to charge guests $500 for posting negative reviews online, to a contractor who voided his client’s warranty because of a negative online review, numerous examples have shed light on this shameful practice by powerful interests against everyday Americans.
These stories are ultimately what led California to enact Civil Code section 1670.8 in 2014, via AB 2365, which banned consumer-silencing non-
However, experience has shown that both California’s law and the federal law are quite narrow in scope and only apply to consumer contracts (and not to cases like the one the Trump campaign filed).
Even for those consumer contracts, there are some limitations to the law as well. Professor Eric Goldman discusses whether or not the federal law goes far enough in Part III of his recap of the legislation. One of the solutions Professor Goldman offers is to enact strong federal anti-SLAPP legislation:
Existing state anti-SLAPP laws may protect consumer reviews, but not completely. Not every state has anti-SLAPP laws, and some state anti-SLAPP laws are so narrow that they don’t include consumer reviews. A federal anti-SLAPP law would fix both problems. It would ensure that all Americans are protected by anti-SLAPP laws, and it should ensure that law-suits over consumer reviews are covered by the anti-SLAPP law. Thus, a federal anti-SLAPP law would enhance the CRFA by providing a fast lane and fee-shift if any businesses illegitimately sue to suppress consumer reviews.