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non-disparagement provision in contract - has to be removed as of March 14, 2017 March 17, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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non-disparagement provision in contract - has to be removed as of March 14, 2017March 17, 2017
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Next webinar March 28, 2017 - see schedule below
TitleAll You Need To Know About Alarm dealer program contracts - getting in and getting out
Register here: https://attendee.gotowebinar.com/register/7359323076355955715
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non-disparagement provision in contract - has to be removed as of March 14, 2017
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Ken
   I have a few of questions regarding how The Consumer Review Fairness Act will affect the monitoring contracts we purchased from you:
1. does this new law apply to the commercial contracts or only to the residential contracts?
2. how will this effect the contracts that were signed before the date the law takes affect?
Rick
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Response
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   The new Federal law applies in both commercial and residential contracts other than those excepted in the statute.  The disparagement provision is "void" and such provision should not be included in a form contract.  [Note that it can be included in a negotiated contract].  
   The provision in the Standard All in One Agreements should be removed [and not included in contracts after march 14, 2017] and the updated versions will not have the clause in the form.
   Here is the law, which went effective March 14, 2017:
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Consumer Review Fairness Act of 2016  Public Law 114-258  114th Congress

                                 An Act
 To prohibit the use of certain clauses in form contracts that restrict 
the ability of a consumer to communicate regarding the goods or services 
 offered in interstate commerce that were the subject of the contract, 
     and for other purposes. <> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, < Fairness Act of 2016.>> 
SECTION 1. <>  SHORT TITLE.

    This Act may be cited as the ``Consumer Review Fairness Act of 
2016''.
SEC. 2. <>  CONSUMER REVIEW PROTECTION.

    (a) Definitions.--In this section:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Covered communication.--The term ``covered 
        communication'' means a written, oral, or pictorial review, 
        performance assessment of, or other similar analysis of, 
        including by electronic means, the goods, services, or conduct 
        of a person by an individual who is party to a form contract 
        with respect to which such person is also a party.
            (3) Form contract.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``form contract'' means a contract with 
                standardized terms--
                          (i) used by a person in the course of selling 
                      or leasing the person's goods or services; and
                          (ii) imposed on an individual without a 
                      meaningful opportunity for such individual to 
                      negotiate the standardized terms.
                    (B) Exception.--The term ``form contract'' does not 
                include an employer-employee or independent contractor 
                contract.
            (4) Pictorial.--The term ``pictorial'' includes pictures, 
        photographs, video, illustrations, and symbols.

    (b) Invalidity of Contracts That Impede Consumer Reviews.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), a provision of a form contract is void from the inception 
        of such contract if such provision--
                    (A) prohibits or restricts the ability of an 
                individual who is a party to the form contract to engage 
                in a covered communication;

[[Page 130 STAT. 1356]]

                    (B) imposes a penalty or fee against an individual 
                who is a party to the form contract for engaging in a 
                covered communication; or
                    (C) transfers or requires an individual who is a 
                party to the form contract to transfer to any person any 
                intellectual property rights in review or feedback 
                content, with the exception of a non-exclusive license 
                to use the content, that the individual may have in any 
                otherwise lawful covered communication about such person 
                or the goods or services provided by such person.
            (2) Rule of construction.--Nothing in paragraph (1) shall be 
        construed to affect--
                    (A) any duty of confidentiality imposed by law 
                (including agency guidance);
                    (B) any civil cause of action for defamation, libel, 
                or slander, or any similar cause of action;
                    (C) any party's right to remove or refuse to display 
                publicly on an Internet website or webpage owned, 
                operated, or otherwise controlled by such party any 
                content of a covered communication that--
                          (i) contains the personal information or 
                      likeness of another person, or is libelous, 
                      harassing, abusive, obscene, vulgar, sexually 
                      explicit, or is inappropriate with respect to 
                      race, gender, sexuality, ethnicity, or other 
                      intrinsic characteristic;
                          (ii) is unrelated to the goods or services 
                      offered by or available at such party's Internet 
                      website or webpage; or
                          (iii) is clearly false or misleading; or
                    (D) a party's right to establish terms and 
                conditions with respect to the creation of photographs 
                or video of such party's property when those photographs 
                or video are created by an employee or independent 
                contractor of a commercial entity and solely intended 
                for commercial purposes by that entity.
            (3) Exceptions.--Paragraph (1) shall not apply to the extent 
        that a provision of a form contract prohibits disclosure or 
        submission of, or reserves the right of a person or business 
        that hosts online consumer reviews or comments to remove--
                    (A) trade secrets or commercial or financial 
                information obtained from a person and considered 
                privileged or confidential;
                    (B) personnel and medical files and similar 
                information the disclosure of which would constitute a 
                clearly unwarranted invasion of personal privacy;
                    (C) records or information compiled for law 
                enforcement purposes, the disclosure of which would 
                constitute a clearly unwarranted invasion of personal 
                privacy;
                    (D) content that is unlawful or otherwise meets the 
                requirements of paragraph (2)(C); or
                    (E) content that contains any computer viruses, 
                worms, or other potentially damaging computer code, 
                processes, programs, applications, or files.

    (c) Prohibition.--It shall be unlawful for a person to offer a form 
contract containing a provision described as void in subsection (b).
    (d) Enforcement by Commission.--

[[Page 130 STAT. 1357]]

            (1) Unfair or deceptive acts or practices.--A violation of 
        subsection (c) by a person with respect to which the Commission 
        is empowered under section 5(a)(2) of the Federal Trade 
        Commission Act (15 U.S.C. 45(a)(2)) shall be treated as a 
        violation of a rule defining an unfair or deceptive act or 
        practice prescribed under section 18(a)(1)(B) of the Federal 
        Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
            (2) Powers of commission.--
                    (A) In general.--The Commission shall enforce this 
                section in the same manner, by the same means, and with 
                the same jurisdiction, powers, and duties as though all 
                applicable terms and provisions of the Federal Trade 
                Commission Act (15 U.S.C. 41 et seq.) were incorporated 
                into and made a part of this Act.
                    (B) Privileges and immunities.--Any person who 
                violates this section shall be subject to the penalties 
                and entitled to the privileges and immunities provided 
                in the Federal Trade Commission Act (15 U.S.C. 41 et 
                seq.).

    (e) Enforcement by States.--
            (1) Authorization.--Subject to paragraph (2), in any case in 
        which the attorney general of a State has reason to believe that 
        an interest of the residents of the State has been or is 
        threatened or adversely affected by the engagement of any person 
        subject to subsection (c) in a practice that violates such 
        subsection, the attorney general of the State may, as parens 
        patriae, bring a civil action on behalf of the residents of the 
        State in an appropriate district court of the United States to 
        obtain appropriate relief.
            (2) Rights of federal trade commission.--
                    (A) Notice to federal trade commission.--
                          (i) In general.--Except as provided in clause 
                      (iii), the attorney general of a State shall 
                      notify the Commission in writing that the attorney 
                      general intends to bring a civil action under 
                      paragraph (1) before initiating the civil action 
                      against a person described in subsection (d)(1).
                          (ii) <>  Contents.--The 
                      notification required by clause (i) with respect 
                      to a civil action shall include a copy of the 
                      complaint to be filed to initiate the civil 
                      action.
                          (iii) Exception.--If it is not feasible for 
                      the attorney general of a State to provide the 
                      notification required by clause (i) before 
                      initiating a civil action under paragraph (1), the 
                      attorney general shall notify the Commission 
                      immediately upon instituting the civil action.
                    (B) Intervention by federal trade commission.--The 
                Commission may--
                          (i) intervene in any civil action brought by 
                      the attorney general of a State under paragraph 
                      (1) against a person described in subsection 
                      (d)(1); and
                          (ii) upon intervening--
                                    (I) be heard on all matters arising 
                                in the civil action; and
                                    (II) file petitions for appeal of a 
                                decision in the civil action.
            (3) Investigatory powers.--Nothing in this subsection may be 
        construed to prevent the attorney general of a State

[[Page 130 STAT. 1358]]

        from exercising the powers conferred on the attorney general by 
        the laws of the State to conduct investigations, to administer 
        oaths or affirmations, or to compel the attendance of witnesses 
        or the production of documentary or other evidence.
            (4) Preemptive action by federal trade commission.--If the 
        Federal Trade Commission institutes a civil action or an 
        administrative action with respect to a violation of subsection 
        (c), the attorney general of a State may not, during the 
        pendency of such action, bring a civil action under paragraph 
        (1) against any defendant named in the complaint of the 
        Commission for the violation with respect to which the 
        Commission instituted such action.
            (5) Venue; service of process.--
                    (A) Venue.--Any action brought under paragraph (1) 
                may be brought in--
                          (i) the district court of the United States 
                      that meets applicable requirements relating to 
                      venue under section 1391 of title 28, United 
                      States Code; or
                          (ii) another court of competent jurisdiction.
                    (B) Service of process.--In an action brought under 
                paragraph (1), process may be served in any district in 
                which the defendant--
                          (i) is an inhabitant; or
                          (ii) may be found.
            (6) Actions by other state officials.--
                    (A) In general.--In addition to civil actions 
                brought by attorneys general under paragraph (1), any 
                other consumer protection officer of a State who is 
                authorized by the State to do so may bring a civil 
                action under paragraph (1), subject to the same 
                requirements and limitations that apply under this 
                subsection to civil actions brought by attorneys 
                general.
                    (B) Savings provision.--Nothing in this subsection 
                may be construed to prohibit an authorized official of a 
                State from initiating or continuing any proceeding in a 
                court of the State for a violation of any civil or 
                criminal law of the State.

    (f) <>  Education and Outreach for Businesses.--Not 
later than 60 days after the date of the enactment of this Act, the 
Commission shall commence conducting education and outreach that 
provides businesses with non-binding best practices for compliance with 
this Act.

    (g) Relation to State Causes of Action.--Nothing in this section 
shall be construed to affect any cause of action brought by a person 
that exists or may exist under State law.
    (h) Savings Provision.--Nothing in this section shall be construed 
to limit, impair, or supersede the operation of the Federal Trade 
Commission Act or any other provision of Federal law.
    (i) <>  Effective Dates.--This section shall 
take effect on the date of the enactment of this Act, except that--
            (1) subsections (b) and (c) shall apply with respect to 
        contracts in effect on or after the date that is 90 days after 
        the date of the enactment of this Act; and

[[Page 130 STAT. 1359]]

            (2) subsections (d) and (e) shall apply with respect to 
        contracts in effect on or after the date that is 1 year after 
        the date of the enactment of this Act.

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WEBINARS:  Sign up for any or all of the webinars that interest you.
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FREE Webinar Series "All You Need To Know About" alarm industry issues. 
Register for one or all.  Each presentation scheduled for half hour to hour.  Not recorded.
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TitleAll You Need To Know About Alarm dealer program contracts - getting in and getting out
When: March 28,  2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about honeypots/trappings of dealer program contracts and how difficult they are to get out of. 
Who should attend: Alarm company owners.
Presented by: James Babbitt, Esq. General Counsel, RMR Capital Group jbabbitt@rmr-capital.com; 952 467 8610
Register herehttps://attendee.gotowebinar.com/register/7359323076355955715
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TitleAll You Need To Know About Getting Top Dollar for your  Alarm Business -sale or financing
When: April 11, 2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about how to maximize the value of your alarm business and position yourself for sale or financing
Who should attend: Alarm company owners.
Presented by: Rory Russell, Acquisition Funding Services, www.afssmartfunding.com 888 551 0476
Register here: https://attendee.gotowebinar.com/register/3874048237745402369
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TitleAll You Need to know about Internet security and why is it relevant for the alarm industry 
When: April 25,  2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: Discussion of securing Internet devices.  Attacks by Mirai and other botnets and disruption to Internet services around the world made possible because of the millions of poorly secured cameras, DVRs and other installed network devices. 
Who should attend: Alarm company owners, general and technical managers
Presented by: Securifi, a leading router and smart home hub company, soon to be offering its own comprehensive Total Security Solution (Monitored Security + IoT Security + Parental Controls + Malware Blocking) to the alarm industry.  Rohit Somani     rohit.somani@securifi.com    855 969 7328  
Register here:  https://attendee.gotowebinar.com/register/6899604070803705091
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com
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