Should You Use Or Sign A Non-Disparagement Clause?

When you settle a case, it’s expected that you will sign a settlement agreement. That settlement agreement will likely contain a confidentiality clause. What you may not expect to be in that agreement, but what may be there, is a non-disparagement clause.

What is a Non-Disparagement Clause?

A non-disparagement clause is a clause that requires the other party signing the agreement, not to say anything negative about you or your business. That can include telling people negative things or posting negative things online.

As you can see, what is unique about a non-disparagement clause is that it isn’t technically related to the facts of your case or lawsuit. Unlike a confidentiality clause, which says that someone can’t say anything about the case or the settlement, the non-disparagement clause prevents someone from saying anything bad about you or your business whether the information is relevant to or related to your case or not.

Non-disparagement clauses aren’t just limited to settlements. Many employers will have employees sign non-disparagement clauses, which may even extend beyond the end of the employee’s relationship with the company.

Clauses Cover Almost Anything Negative

Additionally, non-disparagement clauses don’t just cover false information that you spread about the other party (which could technically be defamation). Even if what you’re saying is totally true, or even if it is just your opinion—both of which would not be considered defamation—you can still be in violation of your non-disparagement clause.

Who Will Know?

Of course, one thing that people want to know is, if they are bound by a non-disparagement clause, anybody would actually know if they are violating the clause by “talking trash” about the other party to the clause. The answer is a solid “it depends.”

Certainly, if you are at the bar with your buddies and you talk about how awful Chase Bank or Amazon.com or some other company that you signed a non-disparagement clause with is, it’s unlikely they will find out. However, if you post something to Facebook, or Reddit, or some other public forum, it’s much more likely to be discovered.

If you are the one who wants to keep someone else from disparaging your company, you can certainly do so in your contracts or agreements. However, the other side must get something in return (in other words, there must be consideration supporting the agreement not to say anything negative about you or your company).

You can have someone sign a non-disparagement clause as a condition of employment, or as a condition of settling a lawsuit or claim, or as consideration for getting a  raise and promotion.

You also should be specific, no matter what side you are on, whether the non-disparagement clause requires the take down or removal of previous comments or statements that are in public view, or whether the clause only covers conduct going forward.

Call the West Palm Beach business litigation attorneys at Pike & Lustig today to help your business with its business contracts and agreements.

Sources:

themuse.com/advice/non-disparagement-clause-agreement-sample#:~:text=What%20Is%20a%20Non%2DDisparagement,in%20any%20form%20of%20communication.

contractscounsel.com/g/44/us/non-disparagement-clause