The Basics of Non-Disparagement Clauses

No employer is perfect, and almost everyone has made negative comments about their employers at one point or another. But, depending on the public profile of the employee (or former employee) making the statement and the forum in which it is made, such comments can cause immense reputational and financial damage to their targets. As a result, many employers make use of non-disparagement clauses in their employment contracts, which limit the ability of persons affiliated with the employer from making certain kinds of statements. Employers seeking to implement non-disparagement clauses and employees curious about their rights under them should speak to a Richmond employment contract attorney.   

What Are Non-Disparagement Clauses? 

Non-disparagement clauses are contractual provisions that prohibit a party (typically current employees and former employees post-termination) from making disparaging — i.e., negative — statements about their employers. They are most commonly found in employment contracts and severance agreements, but they can also show up in other types of agreements, like partnership agreements and independent contractor agreements. They typically prohibit disparaging the company itself as well as its directors, officers, and employees, and sometimes they extend to the employer’s customers, suppliers, and investors. 

Commonly Prohibited Activities in Non-Disparagement Clauses 

“Disparagement” is a broad term that encompasses a wide of behaviors. While every non-disparagement clause is different, these are some of the most common activities they prohibit: 

• Defaming, libeling, or slandering the employer
• Placing the employer in a false light in a public manner 
• Impairing the goodwill of the employer 
• Making oral or written statements disparaging to the employer
• Emailing, texting, or posting disparaging comments about the employer on social media
• Reposting or liking disparaging comments about the employer on social media

Readers should note that “disparagement” is not the same as “defamation.” Defamatory statements are factually false statements that harm the target’s reputation. Disparaging statements harm the target’s reputation regardless of whether they are true, false, factual, or opinion-based. Thus, while many non-disparagement clauses specifically mention defamation, disparagement is a much broader concept. 

Limitations on Non-Disparagement Clauses 

Some states restrict the use of non-disparagement clauses, and, in 2023, Virginia joined that cohort. Under § 40.1-28.01 of the Virginia Code, employers are prohibited from requiring employees or prospective employees to sign a non-disparagement agreement that has the effect or purpose of concealing the details of a claim related to sexual assault or harassment. This prohibition applies only to non-disparagement clauses that are made as a condition of employment or continued employment. It does not apply to non-disparagement clauses in other contexts, such as in severance agreements.

Contact a Richmond Employment Contract Attorney for Further Guidance on Non-Disparagement Clauses 

Employers seeking to implement non-disparagement provisions in their contracts should consult an attorney to ensure that they are drafted to achieve maximum enforceability. Likewise, employees unsure of the scope of a non-disparagement clause should seek legal counsel before making statements that could be construed as disparaging. For more information, please contact a Richmond employment contract attorney at Pierce / Jewett by calling 804-502-2320 or using our online contact form.