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Non Disparagement Clause Defined
Non-disparagement clauses prevent parties from making derogatory comments about the other. In the context of employment, non-disparagement clauses can apply to the employer, employee, or both. These clauses typically define what the other cannot say and for how long after resignation or termination.
Non Disparagement Clause Explained
Non-disparagement clauses don’t fall under the first amendment since injurious speech is not protected. For example, if an employee posts disparaging comments online after signing a non-disparagement agreement, the employer can sue for breach of contract.
Non-disparagement clauses in employment contracts are legal as long as they meet the Equal Employment Opportunity Commission (EEOC) requirements. If employees refuse to sign, employers can choose to discontinue employment.
This article also explains non-disparagement clauses.
Purpose of a Non Disparagement Clause
The purpose of a non-disparagement clause is to protect a company from someone making negative comments about them to another party. Since a company’s goodwill and reputation affect its value, a non-disparagement clause supports these elements’ continued success.
Non Disparagement Clause Examples
Examples of non-disparagement clause use include:
- Example 1: Preventing employees from making derogatory remarks
- Example 2: Limiting business associates from making public comments
- Example 3: Stopping your ex-spouse from making statements in front of kids
- Example 4: Using non-disparagement clauses in separation agreements
- Example 5: Inhibiting employees from discussing non-compete agreements
Here is another article about non-disparagement clauses with examples.
Non Disparagement Clause Samples
Sample 1 - Employment Contract:
Non-Disparagement. During the term of Executive’s employment, and thereafter, Executive shall not make any disparaging remarks, or any remarks that could reasonably be construed as disparaging, regarding the Corporation, its Subsidiaries, or its or their officers, directors, employees, stockholders, representatives, or agents. The Corporation shall, except to the extent otherwise required by applicable laws, rules, or regulations or as appropriate in the exercise of the Board’s fiduciary duties (as determined by the Board with advice of counsel), exercise reasonable efforts to cause the following individuals to refrain from making any disparaging statements, orally or in writing, regarding Executive from and after the termination of the Employment Period: the Corporation’s executive officers and the members of the Board.
Security Exchange Commission - Edgar Database, EX-10.5 6 d453783dex105.htm EX-10.5, Viewed April 5, 2021, < https://www.sec.gov/Archives/edgar/data/1519401/000119312517275682/d453783dex105.htm >.
Sample 2 – Confidentiality and Non-Competition Agreement:
Non-Solicitation; Non-Disparagement. During the term of Employee’s employment with the Company and for the two (2) year period following the termination of Employee’s employment with the Company for any or no reason, Employee will not, and Employee will cause his Affiliates to not, directly or indirectly: (i) solicit for employment, or employ any person who, at the time of such solicitation or employment, is an employee or independent contractor of the Company or its Affiliates or was employed or engaged by the Company or its Affiliates during the twelve month period prior to the solicitation or employment or induce or attempt to induce any person to terminate his employment or engagement with the Company or its Affiliates; (ii) do business with or solicit Customers of the Company or its Affiliates, or engage in any activity intended to terminate, disrupt or interfere with the Company or its Affiliate’s relationships with their Customers; or (iii) engage in any conduct or make any statement disparaging or criticizing the Company or its Affiliates, or any products or services offered by the Company or its Affiliates.
Security Exchange Commission - Edgar Database, EX-10.20 26 dex1020.htm FORM OF CONFIDENTIALITY AND NON-COMPETITION AGREEMENT, Viewed April 5, 2021, < https://www.sec.gov/Archives/edgar/data/1383825/000119312509022488/dex1020.htm >.
Sample 3 – Employment Agreement:
Non-Disparagement. During and after any employment with the Company, regardless of how, when or why such employment ends, (a) you shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning the Company or its subsidiaries or affiliates, any of their clients or businesses or any of their current or former officers, directors, employees or shareholders and (b) Company Parties (as defined below) shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning you; provided, however, that nothing herein shall prohibit (i) critical communications between you and the Company or Company Parties during the Initial Term and any Renewal Term and in connection with your employment or (ii) you or any Company Party from disclosing truthful information if legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process). For purposes of this Agreement, the term “Company Parties” shall mean the executive officers and designated spokespersons of the Company.
Security Exchange Commission - Edgar Database, EX-10.1 2 ex10-1.htm EMPLOYMENT AGREEMENT BETWEEN BARNES & NOBLE, INC. AND RONALD D. BOIRE, Viewed April 5, 2021, < https://www.sec.gov/Archives/edgar/data/890491/000095015715000744/ex10-1.htm >.
Common Contracts with Non Disparagement Clauses
Common contracts with non-disparagement clauses include:
- Divorce decrees
- Employment agreements
- Non-solicitation agreements
- Noncompete agreements
- Separation agreements
- Contractor agreements
- Severance pay agreements
- Termination contracts
Check out this non disparagement clause example.
Non Disparagement Clause FAQs
Non-disparagement clauses are complicated and nuanced. Below, please find the answers to some common non-disparagement clause FAQs to help you understand them better:
Are non-disparagement agreements enforceable?
Non-disparagement clauses are enforceable in specific situations and according to the laws in your state. They are only illegal if they are unduly burdensome or overarching, especially within the context of employment law.
What qualifies as disparagement?
Disparagement is any comment, remark, or state, in writing or verbally, that falsely or injuriously harms a company. Disparaging comments hurt the brand perception and profitability. Companies can file a claim against their detractors when an enforceable disparagement clause exists.
Employment lawyers can help you determine if your situation qualifies for disparagement violation claims.