What Is a Non Disparagement Agreement
14 Apr 2022I have over 25 years of experience representing private and corporate clients, large and small, in transactions such as mergers and acquisitions, private offerings of securities, commercial loans and commercial activities (supply contracts, manufacturing agreements, joint ventures, intellectual property licenses, etc.). My specialty is complex and new drawing. Employment lawyers can help you determine if your situation qualifies for defamation lawsuits. You settle your case and the defendant agrees to pay you a lot of money. All that remains is to sign a “standard” settlement agreement prepared by the defendant`s lawyer. You will be redirected to page 10 and see a paragraph titled “No insult.” You see that this means that neither side will “denigrate” the other. never. You call your lawyer who tells you not to worry, that this is a common provision and that it probably means nothing. He`s not even sure what “insult” is, and wouldn`t that really be hard to prove? Most clients, often on the advice of their legal counsel, sign these things every day.
There are times when employees can legally denigrate a company after signing a non-insult agreement. Examples: Whether it appears in an employment contract or as part of a separation agreement, a non-insult clause – which prevents you from saying anything negative about a company again – can be intimidating. And like many of the formalities that come with hiring and firing, it can be confusing: what does it really say? What are the consequences of the signature? Termination and dispute resolution agreements often contain a provision that prohibits one or more of the parties from making “derogatory” statements about the other party. Such non-disparaging clauses are often used, but rarely challenged. Therefore, employers negotiating these terms (as well as their lawyer) may not be familiar with how they might be triggered and the practical implications of trying to enforce them. Here are some thoughts for employers considering including non-insult clauses in their settlement agreements. On the one hand, if you`ve been taken by surprise by a layoff and need money to pay your rent and buy groceries for a few months until you find a new job, you may decide to sign a non-insult clause to get the severance pay offered to you. On the other hand, you can have savings and are motivated by various factors to pass on the money so that you can freely say what you want. In the context of settling a work claim, claimants sometimes respond to a request for the inclusion of a non-disparagement clause by requesting that it be based on reciprocity. Employers should carefully consider whether to accept a mutual non-disparagement clause, particularly because of the practical aspects involved. For example, the inclusion of such a provision could potentially make an employer contractually liable on the basis of negative comments from people employed by the company (including those who may not even be aware of the agreement).
You can also expect to have to pay damages. However, Elkins notes that calculating damage can be difficult. “When you go on social media and blow up your former employer, it`s really hard for the former employer to show how much it hurt them financially,” he says. For this reason, you may see a so-called lump sum clause. This defines the cost of damage per breach (so if you visit Twitter, Facebook, and Instagram to share dirt on your old business, you`ll pay three times the amount you`ve planned). Do you have to sign it to get a separation? Severance pay and benefits are not on the table if you refuse to sign a non-disparagement clause. Is it worth it for you? A possible red flag to watch out for: “The non-insult agreement should only cover behavior from the date of signature. It must explicitly exclude everything that has happened before – because an employee may have already reduced their employer to 15 people,” says Michael Elkins, labor and labor lawyer and founder of MLE Law. Clarify with your employer or an employment lawyer to make sure the agreement only covers what you do after you sign it, and nothing you`ve already done, he points out.
If you sign a non-insult agreement and then write a message on social media about how your boss is an idiot, you are violating your agreement and you can be held liable as stated in your contract. This can range from termination to payment of significant fines. Companies generally require their employees to sign a non-disparagement clause in two circumstances: when hiring or terminating their employment relationship. They are often included in a longer-term contract, which also includes non-compete obligations and non-competition clauses. Here is another article on non-slur clauses with examples. One way to get around the problem of speculation and create damages is to include a lump sum/agreed compensation provision in conjunction with the non-disparagement clause. Note that employers may want to choose the amount of lump sum damages carefully – setting the amount too high could be considered an unenforceable “penalty clause”. If you set the amount too low, the relief may be limited to actual damages in extreme cases. Another way to avoid the problem of damages is to seek an injunction and specific enforcement instead of damages. “If I have to pay her severance pay, I want to make sure she doesn`t walk around and talk badly about me or my company,” isn`t an unusual call from an employer who breaks up with a difficult employee.
The labour lawyer`s most common response to these concerns is to add a non-disparagement clause to the separation agreement. While it can be difficult to enforce non-insult clauses, most labor lawyers will tell you that they have never had to enforce one, suggesting that the clauses serve as an effective deterrent against criticism of their former employer or boss by disgruntled former employees. Before refusing to sign the agreement, try talking to the hiring manager. Perhaps the wording of the agreement can be changed or they can provide useful clarification as to what the non-insult clause actually entails. “Could the reasons for your departure or what you know about the organization be such that you won`t remain silent?” Cheddie says and cites, for example, the latest movement #MeToo. “In this case, there may not be enough money to stay calm.” If you`ve been harassed, attacked, or bullied at work, there may not be a dollar amount that could prevent you from sharing your experiences and notifying others. .