How does a non-disparagement agreement restrict you?

How does a non-disparagement agreement restrict you?

On Behalf of | Aug 25, 2021 | Contracts |

Some companies include a non-disparagement clause in their employment contracts with new hires. They basically say that you agree not to write or say anything negative about the company, its customers, products or your experience working there that could cause harm to its reputation. 

Most new employees don’t think twice about agreeing to this. After all, the company just hired them. They’ve got nothing but good things to say about them.

Why do employers have non-disparagement agreements?

Companies may include non-disparagement clauses in their new hire paperwork because their reputation is crucial to their brand. 

Sometimes, companies include these clauses because current and past employees have previously burned them. Employers may also have their workers sign non-disparagement agreements to reduce the chances of the word getting out that their workplaces are toxic. It could affect their recruiting efforts if this information came to light.

With just about everyone on social media sites, it only takes one unflattering story by an unhappy employee to do significant damage to a company. These non-disparagement clauses typically extend beyond an employee’s time with a company. Employers can often sue for damages long after an employee’s departure.

The fear of unhappy former employees is why some businesses will put a non-disclosure clause in their exit paperwork. A company may have its employees sign a non-disparagement agreement whether they voluntarily or involuntarily leave the company if they wish to receive severance pay, which isn’t legally required in Ohio. You’ll have to weigh what is most important to you in such instances- to vent or take the money. 

Keeping legal exposure low if you breach your agreement 

There are some exceptions where employees or former employees can disparage an organization even with a non-disparagement agreement without exposing themselves to legal liability. Two instances in which they can’t take legal action against you are if you cooperate with a government investigation into a company’s violations of law or file a workers’ compensation claim for injuries due to unsafe conditions or practices. 

The Securities and Exchange Commission (SEC) also previously announced that it’s unlawful for public companies to use severance agreements to stop whistleblowers from participating in securities law violation investigations. 

You may want to seek legal guidance if you have concerns about a non-disparagement agreement that you previously signed. Many companies take these agreements seriously, and violating them can be costly.