What's happening
This bill prohibits non-disparagement clauses in consumer contracts, protecting consumers' rights to share honest feedback about goods or services.
Why it matters
Prevents businesses from threatening or punishing customers. for sharing honest opinions—protecting consumers not just from explicit contract language, but also from retaliation or attempts to enforce now-illegal clauses.
Empowers consumers with legal recourse. Any harmed consumer can sue for up to triple actual damages plus attorney’s fees, providing a strong deterrent against companies that try to silence negative feedback.
Imposes escalating penalties on violators. Businesses face civil fines up to $500 for the first offense, $1,000 for subsequent offenses, and up to $5,000 for trying to enforce or penalize based on a non-disparagement clause.
Clarifies business and platform protections. The law explicitly allows review-hosting platforms to remove statements they are otherwise legally allowed to remove, balancing consumer speech with moderation rights.
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Who cares
Headline styles
Ban Gag Clauses in Contracts
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to consumer protection
- Print number 6367b
- Amend and recommit to consumer protection
- Print number 6367a
- Amend and recommit to consumer protection
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Gag Clauses in Contracts
In Senate Committee · Consumer Protection · Sponsor James Skoufis
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6367--B
2017-2018 Regular Sessions
IN SENATE
May 11, 2017
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the general business law, in relation to the prohibition of the use of non-disparagement clauses in consumer contracts
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The general business law is amended by adding a new section 399-cccc to read as follows:
§ 399-cccc. Non-disparagement clauses in consumer contracts or services prohibited. 1. Definitions.
a. The term "consumer" shall mean a natural person residing in this state.
b. The term "consumer goods" shall mean goods, wares, paid merchandise or services purchased or paid for by a consumer, the intended use or benefit of which is intended for the personal, family or household purposes of such consumer.
c. The term "consumer services" shall mean services provided to consumers including, but not limited to, legal services, medical services or cleaning services.
d. The term "non-disparagement clause" shall mean a provision waiving the consumer's right to make any statement regarding a seller or lessor or its employees or agents, or concerning the goods or services.
2. Prohibition. a. A contract or proposed contract for the sale or lease of consumer goods or services may not include a non-disparagement clause. The inclusion of such clause in a contract or proposed contract for the sale or lease of consumer goods or services shall not serve to impair the enforceability of any other provision of such contract.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07502-05-7
S. 6367--B 2
b. It shall be unlawful to threaten or to seek to enforce a non-disparagement clause made unlawful under this section, or to otherwise penalize a consumer for making any statement protected under this section. The inclusion of such clause in a written contract for the sale or purchase of consumer goods shall not serve to impair the enforceability of any other provision of such contract.
c. Any waiver of the provisions of this section is contrary to public policy, and is void and unenforceable.
3. Penalty. a. Any person who violates this section shall be subject to a civil penalty not to exceed five hundred dollars for the first violation, and one thousand dollars for the second and for each subsequent violation, to be assessed and collected in a civil action brought by the attorney general.
b. Any person who seeks to enforce a non-disparagement clause made unlawful under this section or otherwise penalize a consumer for making any statement protected under this section shall be subject to a civil penalty not to exceed five thousand dollars to be assessed and collected in a civil action by the attorney general.
c. Any consumer damaged by a violation of this section may bring an action for recovery of damages. Judgment may be entered in an amount not to exceed three times the actual damages plus reasonable attorney's fees. The penalty provided by this section is not an exclusive remedy, and does not affect any other relief or remedy provided by law. This section shall not be construed to prohibit or limit a person or business that hosts online consumer reviews or comments from removing a statement that is otherwise lawful to remove.
§ 2. This act shall take effect on the ninetieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to the prohibition of the use of non-disparagement clauses in consumer contracts
Purpose or general idea of bill
Prohibits companies from using non-disparagement clauses in contracts as to protect consumers who make any statements regarding a seller or lessor or concerning the goods and services
Summary of provisions
Section 1: Prohibits a contract for the sale or lease of consumer goods or services may not include a non-disparagement clause. Creates civil penalties for any person who violates this section.
Section 2: Effective Date
Justification
Given the potential impact of negative reviews for businesses, some have tried to stop them wherever possible. This has prompted legislation in six different state legislatures, with two of the bills already signed into law. Some businesses have used deceptive practices and inserted non-disparagement clauses into online service agreements or fine print of a contract making the consumer liable for statements or actions that could potentially harm the business. Posting a negative online review on a consumer review site (e.g. Amazon, Consumer Reports, Trip Advisor, Yelp) could result in a libel lawsuit against the consumer.
Prior legislative history
None.
Fiscal implications for state and local governments
None.
Effective date
This act shall take effect on the ninetieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.