Watch Out for those Don’t Speak Clauses (aka Non-Disparagement Clauses) in Employment Agreements!

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22814.blogEmployers have been trying to include non-disparagement clauses in employment exit agreements for a long time but they seem to have gained some popularity recently. The New York Times recently ran an opinion piece, “Fired? Speak No Evil”, by a laid-off employee, Will Blythe, which spotlighted the issue even further.

Mr. Blythe’s former employer fired him and then provided him a severance agreement containing a non-disparagement clause – for Mr. Blythe to “never make any negative or disparaging statements” about the company, its directors, shareholders, remaining employees, products, etc. If Mr. Blythe did not sign the clause, he would not receive his two weeks of severance pay. Mr. Blythe questioned the necessity of that part of his termination and the company president assured him that these types of clauses were perfectly ordinary in the business world. So why did Mr. Blythe end up not signing his agreement, and forgoing two weeks of pay? He wanted his own perfectly ordinary ability to speak his mind.

Employers have been increasingly including these disparagement clauses in settlement agreements and termination or severance agreements like in Mr. Blythe’s case. These clauses seek to prevent employees from speaking about their former employer in exchange for some amount of severance or money. They may be as simple as one or two sentences, saying something like “You agree not to disparage or negatively comment on the Employer, its officers and management, and/or current or former employees.” Often these clauses also include that violations for an employee disparaging or negatively commenting ends up costing the employee the entire severance or money he received or the employee may even be subject to penalties called liquidated damages.

Although these sentences are simple enough in theory, they present many serious questions and concerns in practice. The most obvious issue is definitions–what does “disparage,” and “negatively comment” mean? What if the terminated employee said something about another employee or manager that he or she had some conflict with? How long is the employee required to not disparage? Indefinitely? So the definitions should be specific at the very least about what “disparage” means so an employee could completely understand what he or she is agreeing to not speak about.

Perhaps one of the most serious concerns with these non-disparagement clauses is the reason Mr. Blythe refused to sign off on the agreement – his need to speak for whatever reason it may be. For Mr. Blythe his need was to speak him mind and subsequently penning an article. In all likelihood, if you have been fired, you may still want to talk to others, including your friends and family, about your former employer, employees, products, etc. What you say may not deliberately try to disparage or negatively comment but it could be construed that way, in which case you would be in violation of the non-disparagement clause.

Another reason to speak if you have been fired or laid off is to deal with your emotional distress. Most employees when they are fired are not happy about their exit from the company and many suffer from various degrees of emotional distress. So for many terminated employees, there’s a real need to discuss issues about their emotional distress with their doctors or psychologists or clergy/ ministers/ spiritual advisers. This doesn’t mean that the terminated employee is deliberately trying to bad mouth the employer but during the course of counseling, he or she may either deliberately or perhaps inadvertently say something that could be construed to “disparage” or “negatively comment” about former employees and managers or even the company’s products or services.

As an employee you could try negotiating with the employer to carve out particular individuals or groups (e.g. doctors, spiritual advisers, etc.) that you would be permitted to discuss anything regarding your employment including “disparage” or “negatively comment”. But most employers are not likely to agree. At the end of the day, an employee confronted with one of these clauses like Mr. Blythe, should consult an employment lawyer who represents employees to evaluate the clause. That way the employee can understand what next steps would be appropriate – whether to try to get rid of the clause, negotiate changing the definitions or terms or sign it anyway.

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