Oregon Sues SFW Construction Over Consumer Gag Clauses
Contractors using non-disparagement clauses in consumer agreements face legal risk under federal and state trade laws.
Updated on Oct. 20, 2026 in Construction
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Oregon Attorney General Dan Rayfield has filed a federal lawsuit against Portland-based SFW Construction for allegedly using contract clauses that prohibit customers from posting negative reviews. The action, which impacts the construction firm's operations in Portland and Eugene, aims to halt these practices and secure monetary penalties.
Why it matters
The case highlights the operational risk of using non-disparagement clauses that conflict with federal consumer protection laws, which can lead to costly litigation and regulatory oversight. Businesses using such contract language face immediate scrutiny regarding their compliance with both federal and state trade practice statutes.
The Oregon Attorney General's lawsuit challenges contract terms in use since 2022 at a firm with established operations in Portland and Eugene. The final impact remains unknown, pending federal court rulings on the legality of the company's non-disparagement provisions.
The players
Dan Rayfield
The Oregon Attorney General, serving as the state's chief legal officer and regulator of trade practices.
SFW Construction
A Portland-based construction company with branch locations in Eugene.
The details
SFW Construction allegedly included gag clauses in its standard customer contracts to prevent the sharing of negative feedback while continuing to display positive reviews on its website. This practice is being challenged for violating the federal Consumer Review Fairness Act and Oregon's Unlawful Trade Practices Act. Operators using similar restrictive clauses in consumer-facing agreements now face potential legal exposure and the requirement to align standard terms with broader transparency mandates.
Timeline
The company began using the standard contract with gag clauses in 2022.
The lawsuit was filed in federal court on October 20, 2026.
Market Landscape
This lawsuit underscores the active enforcement of the Consumer Review Fairness Act, which prohibits contract terms that limit honest consumer feedback. It serves as a regulatory signal that restrictive non-disparagement clauses are under increased scrutiny by state authorities.
Business owners should review all consumer contracts to ensure they do not contain provisions that restrict honest feedback, as these are increasingly subject to federal and state litigation. Legal counsel should be consulted to confirm that standard terms align with current consumer protection requirements.
The takeaway
The use of restrictive non-disparagement clauses in consumer contracts creates significant legal vulnerability regardless of local business size. Operators with concerns about their own contract templates should contact the Oregon Department of Justice at 1-877-877-9392 for guidance on compliance.
Further reading
For more on industry compliance and standards, visit Construction.
More information
To file a grievance or learn more, visit the Oregon Department of Justice consumer complaint portal.
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