Non-disparagement: Overview, definition and example
What is non-disparagement?
Non-disparagement refers to a contractual provision that prohibits one party from making negative, harmful, or disparaging statements about another party. In employment or business contracts, a non-disparagement clause is often included to prevent either party from publicly criticizing, defaming, or undermining the reputation of the other party, whether through direct statements or indirect comments.
The aim of a non-disparagement clause is to protect both parties from reputational harm, ensuring that their relationship remains professional and that any disputes or disagreements are resolved privately rather than through public commentary.
Why is non-disparagement important?
A non-disparagement clause is important because it helps safeguard the reputation of both parties and maintains a respectful and professional relationship. This clause is commonly included in employment contracts, severance agreements, or settlement agreements to prevent employees, former employees, or business partners from making harmful statements about the company or other stakeholders.
For businesses, protecting their reputation from negative or damaging comments is crucial for maintaining customer trust, investor confidence, and employee morale. For employees or business partners, a non-disparagement clause ensures that they do not risk legal repercussions from making disparaging comments after the end of the relationship.
Understanding non-disparagement through an example
An employee signs a severance agreement that includes a non-disparagement clause. The clause prohibits the employee from making any negative statements about the company after they leave. The company, in return, agrees not to make disparaging remarks about the employee, ensuring that both parties maintain a neutral stance regarding the separation.
An example of a non-disparagement clause
Here’s how a non-disparagement clause might appear in a contract:
“The Employee agrees not to make any disparaging, defamatory, or negative statements, whether oral or written, about the Company, its officers, employees, or affiliates. Similarly, the Company agrees not to make any disparaging statements about the Employee. This provision shall remain in effect after the termination of this Agreement.”
Conclusion
A non-disparagement clause is a valuable provision in contracts designed to protect both parties from reputational harm by prohibiting negative or defamatory statements. By including this clause, both parties are encouraged to resolve any conflicts or grievances privately, maintaining professionalism and ensuring that public statements are respectful. Non-disparagement clauses are particularly useful in employment and business agreements to preserve relationships and reputations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.