Gag Clauses (continued)

"Car owners souring on lemon-law 'gag clause'

Consumers: Automakers are blocking the flow of information about buybacks"

"Motorists who want automakers to buy back defective vehicles under the state's lemon law frequently must promise to keep dangerous mechanical problems a secret.

Auto companies including Ford and General Motors often require car owners to sign 'gag clauses' before the companies will buy back the cars. Chrysler requires it in every case, lemon-law attorneys said. One lawmaker calls the practice coercive and wants to outlaw it.

'It's intimidation,' said Assemblyman Kevin Shelley, D-San Francisco, who has introduced a bill to ban the gag clauses. Consumer groups say the practice squashes free speech and potentially threatens the safety of all drivers.

Motorists who sign the agreements can't reveal safety hazards to subsequent owners, complain to consumer groups or even talk to a state investigator, even if that investigator is looking into possible lemon-law violations.

'If they talk to someone about it, (the companies) could sue them,' said Rosemary Shahan, founder of Consumers for Auto Reliability and Safety, a Sacramento-based consumer advocacy group that lobbied Shelley to introduce the bill.

Jeff Crabtree, a Honolulu attorney, said Chrysler has refused to buy back cars in cases where consumers resisted the gag clauses. 'I've tried to negotiate that out before and they've said, 'Look, no confidentiality, no deal,' Crabtree said."

– Orange Country Register, May 15, 1998