Non-Disparagement Clause
Most employment agreements include a provision that sets out the legal terms and conditions for handling employer-employee disputes or ending employment. A non-disparagement clause aims to prohibit employees from making negative statements about their past or present employer.
What Is a Non-Disparagement Clause?
A non-disparagement clause (also called a non-disparagement provision) establishes one party’s agreement not to disparage another party. The clause can be found in employment contracts as well as in separation agreements and severance agreements.
Before we understand the legality of the clause, it is essential to know the meaning of disparagement. By definition, to disparage another party means to make oral or written negative statements about another party’s business, property, or product.
In legal terms, disparagement differs from defamation in that the latter covers only false statements made with the intent to cause harm. However, disparagement is a broader term that covers both true and false statements that may cast the other party in a negative light.
When Do I Use a Non-Disparagement Clause?
Disparagement clauses can be found in employment contracts for regular employees as well as managers and executives.
The clause typically prohibits the following activities.
- Portraying the employer negatively in a public way
- Impairing or disrupting the employer’s goodwill
- Making oral or written statements that cast the employer in a negative light
- Testing, emailing, or posting disparaging comments online about the employer
- Reposting or liking disparaging social media comments about the employer
There are exceptions to a non-disparagement clause that allow employees to testify truthfully about a current or previous employer in legal proceedings or communicate about the employer with a government agency.
Other exceptions can include communication with tax and accounting advisors, boards of directors or shareholders of a corporation, and the employee’s legal counsel.
How Long Does a Non-Disparagement Clause Last?
A non-disparagement clause might be found in a separate section of an employment contract with an easy-to-spot heading.
On the other hand, the clause might be buried in a lengthy section of the document. Either way, the clause includes the word “disparage” or “disparagement.”
For example, the clause should say that it covers disparagement from the date of employment forward so as not to include anything the employee might have stated in the past. The clause should also include a termination date.
Restrictions on non-disparagement clauses
A review of employment contract templates reveals that some non-disparagement clauses have no time limit, while others state a specific duration.
Also, some non-disparagement clauses are mutual, meaning that they restrict the employer from making disparaging remarks about a current or past employee as well as the other way around.
Some states now restrict the use of non-disparagement clauses. Therefore, employers who wish to use this type of provision in their contracts would be wise to consult their attorney beforehand.
Likewise, potential employees should contact a lawyer if they have concerns about their rights under a non-disparagement clause before signing the employment contract.
Helpful Resources:
SHRM - Employment Contract Provisions
AAML - The Use Of Non-Disparagement Clauses In Family Law Cases
Nat. Law Review - New Jersey Supreme Court’s Recent Ruling on Non-Disparagement Clauses
Most employment agreements include a provision that sets out the legal terms and conditions for handling employer-employee disputes or ending employment. A non-disparagement clause aims to prohibit employees from making negative statements about their past or present employer.
What Is a Non-Disparagement Clause?
A non-disparagement clause (also called a non-disparagement provision) establishes one party’s agreement not to disparage another party. The clause can be found in employment contracts as well as in separation agreements and severance agreements.
Before we understand the legality of the clause, it is essential to know the meaning of disparagement. By definition, to disparage another party means to make oral or written negative statements about another party’s business, property, or product.
In legal terms, disparagement differs from defamation in that the latter covers only false statements made with the intent to cause harm. However, disparagement is a broader term that covers both true and false statements that may cast the other party in a negative light.
When Do I Use a Non-Disparagement Clause?
Disparagement clauses can be found in employment contracts for regular employees as well as managers and executives.
The clause typically prohibits the following activities.
- Portraying the employer negatively in a public way
- Impairing or disrupting the employer’s goodwill
- Making oral or written statements that cast the employer in a negative light
- Testing, emailing, or posting disparaging comments online about the employer
- Reposting or liking disparaging social media comments about the employer
There are exceptions to a non-disparagement clause that allow employees to testify truthfully about a current or previous employer in legal proceedings or communicate about the employer with a government agency.
Other exceptions can include communication with tax and accounting advisors, boards of directors or shareholders of a corporation, and the employee’s legal counsel.
How Long Does a Non-Disparagement Clause Last?
A non-disparagement clause might be found in a separate section of an employment contract with an easy-to-spot heading.
On the other hand, the clause might be buried in a lengthy section of the document. Either way, the clause includes the word “disparage” or “disparagement.”
For example, the clause should say that it covers disparagement from the date of employment forward so as not to include anything the employee might have stated in the past. The clause should also include a termination date.
Restrictions on non-disparagement clauses
A review of employment contract templates reveals that some non-disparagement clauses have no time limit, while others state a specific duration.
Also, some non-disparagement clauses are mutual, meaning that they restrict the employer from making disparaging remarks about a current or past employee as well as the other way around.
Some states now restrict the use of non-disparagement clauses. Therefore, employers who wish to use this type of provision in their contracts would be wise to consult their attorney beforehand.
Likewise, potential employees should contact a lawyer if they have concerns about their rights under a non-disparagement clause before signing the employment contract.
Helpful Resources:
SHRM - Employment Contract Provisions
AAML - The Use Of Non-Disparagement Clauses In Family Law Cases
Nat. Law Review - New Jersey Supreme Court’s Recent Ruling on Non-Disparagement Clauses