Retailer demands $3,500 from author of bad review

It's difficult to fathom how a legitimate business could act this way: A Utah woman, Jen Palmer, several years ago wrote a negative online review about trinket retailer KlearGear and the company responded by attempting to enforce against her what just might be the most despicable terms of service ever imagined.
From an Electronic Frontier Foundation blog post:

It's a terrifying story: Palmer's husband placed an order for her with KlearGear that never arrived. She got a refund, and after being unable to contact the site's customer service representative, left a negative review of her experience on Ripoffreport.com.

Three years later, Palmer received an email demanding $3,500 dollars for violating KlearGear's Non-Disparagement Clause (which reads):
"In an effort to ensure fair and honest public feedback, and to prevent the publishing of libelous content in any form, your acceptance of this sales contract prohibits you from taking any action that negatively impacts KlearGear.com, its reputation, products, services, management or employees.
"Should you violate this clause, as determined by KlearGear.com in its sole discretion, you will be provided a seventy-two (72) hour opportunity to retract the content in question. If the content remains, in whole or in part, you will immediately be billed $3,500.00 USD for legal fees and court costs until such complete costs are determined in litigation. Should these charges remain unpaid for 30 calendar days from the billing date, your unpaid invoice will be forwarded to our third party collection firm and will be reported to consumer credit reporting agencies until paid."

Translation: Don't you dare say anything bad about us. And, if you do, your choices are to pay us $3,500 or we'll ruin your credit. The Palmers didn't pay. KlearGear ruined their credit.
I am not a lawyer, unlike Ken White, lead blogger and founder of Popehat, who writes of the KlearGear shakedown clause:

KlearGear's non-disparagement clause is a contemptible, unethical, and un-American. I say that whether or not KlearGear is defrauding customers by citing the clause to customers who didn't even agree to it. You should not - you cannot - trust a company that hides in its small print a clause saying you can't criticize it for bad service. Only a dishonest and amoral company would insert such a clause into its terms of use. Only amoral and dishonest people, deserving of our contempt - owners, officers, employees, and company lawyers - would create and attempt to enforce such language.

White's entire analysis is well worth reading.
Meanwhile, KlearGear has reportedly retreated to a social-media bunker - its Twitter account now designated private. (They've also not responded to my email.) And John Biggs at TechCrunch summaries the likely fallout facing the retailer:

This is pretty damning for a company that has a revenue of $47 million catering to an audience of cubicle dwellers and, presumably, Internet users. Like GoDaddy before them, social media behavior in the face of negative press can make or break a company. By retreating the company has essentially destroyed its own Internet reputation and, in honesty, I'm glad. These sorts of stories - company gets burned for being mean - are short-lived but important and each instance is a white paper in itself on how not to do business. In short, when you're cornered apologize and make it right instead of committing business suicide.

Are they really goners? A message on the company's site this morning puts on a brave face (I mean the text, not the goofy kid):

But I'm guessing that the Internet isn't quite done passing  judgment and that fulfilling orders promptly will be the least of KlearGear's concerns.