Non-disparagement Agreement

Non-Disparagement Agreement

A non-disparagement agreement, also known as a non-disparagement clause, is a contractual provision that prohibits one or both parties from making negative statements about each other. This type of agreement is commonly found in employment contracts, separation agreements, and settlement agreements. The primary purpose of a non-disparagement clause is to protect the reputation of the parties involved by preventing harmful public statements.

Key Features of Non-Disparagement Agreements

• Scope: These clauses can cover a wide range of negative statements, including verbal comments, written statements, and even social media posts. They may also extend to indirect actions, such as encouraging others to make negative comments.
• Purpose: The main goal is to safeguard the reputation and business interests of the parties involved. This is particularly important for businesses, as negative publicity can impact their operations and profitability.
• Types: Non-disparagement clauses can be either unilateral (applying to one party) or mutual (applying to both parties).
• Legal Considerations: While these clauses are designed to protect reputations, they have faced criticism for potentially being used to suppress legitimate concerns, such as workplace harassment or discrimination. Recent legislation, like the Speak Out Act in the U.S., limits the enforcement of non-disparagement clauses in cases involving harassment or abuse.

Examples and Applications

Non-disparagement clauses are often included in:

• Employment Contracts: To prevent former employees from making negative comments about their former employer or colleagues.
• Settlement Agreements: To ensure that parties to a dispute do not publicly criticize each other after reaching a settlement.
• Marital Settlement Agreements: To maintain a respectful environment during and after divorce proceedings.