A new legislation prevents businesses from acting against customers who post negative reviews about their services on Yelp, The National Journal reported.

Yelp is a California-based company that connects local businesses to customers. Its website provides users an avenue to review and comment about the services of various kinds of establishments.

The Consumer Review Freedom Act, which was introduced by California Representative Eric Swalwell, protects the rights on consumers to voice their opinions about businesses. It was then passed by California Governor Jerry Brown, according to Yahoo.

"Today we're pleased to say that we're making progress with the passage of Assembly Bill 2365 by California Governor Jerry Brown, legislation some have affectionately come to call the 'Yelp Bill,'" a representative from Yelp said in a blog post.

As part of the bill, companies are not allowed to fine patrons who post negative reviews about them or have them banned from Yelp.

According to the company, the "Yelp Bill" was enacted in response to businesses creating policies that discourage users from speaking badly about them.

For instance, it was previously revealed that the Union Street Guest House in Hudson, New York, enforced a rule about imposing fines to customers who post bad reviews on Yelp.

"From time to time we hear about businesses that are so afraid of what their customers might say about them that they sneak clauses into customer contracts designed to forbid their customers from saying anything bad about them on sites like Yelp," the spokesperson said.

"Some of these contracts even threaten fines or legal action." The representative added. "These types of non-disparagement contracts not only seek to intimidate potential reviewers away from sharing their honest experiences online, but also threaten to deprive the public of useful consumer information."

Although the "Yelp Bill" is only enforced in California, Yelp hopes other states will follow in supporting the freedom of consumers to share their opinions online.

"We urge other states around the country to follow the example that California has set and adopt similar laws to clarify that non-disparagement clauses in consumer contracts are void and unenforceable," the company said.

"These types of laws are good public policy and will help to protect Yelp users and consumers worldwide," it added.