May 10, 2019
The Federal Trade Commission (“FTC”) has settled its first Consumer Review Fairness Act (“CRFA”) violation investigations. Enacted in December of 2016, the CRFA prohibits businesses from offering provisions in form contracts that prevent customers from publicly expressing honest reviews about products or services, or penalizing those customers who have publicized such reviews. Complaints were filed against: 1) A Waldron HVAC, LLC and its owner; 2) National Floors Direct, Inc.; and 3) LVTR LLC and its owner (collectively, “Respondents”). In the complaints, the FTC alleged that Respondents violated Section 2(c) of the CRFA, by offering customers form contracts that contained non-disparagement provisions. In each case, the Respondents have accepted proposed consent agreements, and are awaiting public comment before a final order is entered.
Why were the non-disparagement provisions deemed invalid?