Non-Disparagement Clauses and Their Restrictions in the Digital Age

As the digital age continues to grow, more and more people are turning to places like Facebook and Yelp to gather information about a company. Using digital platforms allows them to read reviews as well as leave reviews of their own and determine whether or not to invest their time and money into a business. Given the rise in digital communication, attorneys are finding themselves confronted with an ever-increasing amount of claimed non-disparagement violations.

Enter The Non-Disparagement Clause

A non-disparagement clause is a legal representation of a private agreement that restricts free speech. Employers often implement a mutual non-disparagement clause that promises both parties, company and employee, agree to not disparage the other.

However, as with any provision, the non-disparagement clause can come with inferences, assumptions, and questions regarding what, exactly, constitutes disparagement.

What Constitutes Disparagement?

At its core, the term disparage means to belittle or reduce in rank or esteem.

Generally speaking, if a non-disparagement clause is included in an employment or severance agreement, courts view and enforce it as a matter of contract interpretation principles.

In regards to the courts in Illinois, they examine the contract to determine the intention of all parties at the time they entered into it. Once the court has determined the intention, they may rely on a dictionary to provide a definition of any undefined terms, giving them their intended meanings.

Challenges Non-Disparagement Clauses Face

Certain positions within a company offer higher risks of disparagement than others. Employees with access to confidential information within the company, separated employees, and those that have been terminated all pose a greater risk.

While a non-disparagement clause can lessen this risk, it isn’t without its challenges.

These contractual clauses restrict free speech, and with that can come legal attacks from governmental agencies charged with regulating the workforce.

For instance, the Equal Employment Opportunity Commission (EEOC) has filed lawsuits challenging certain non-disparagement provisions included in severance agreements that precluded employees, both former and current, from cooperating with them in their investigations into illegal discrimination.

Consumer Review Fairness Act Levels The Field

In 2016, Congress passed this act in order to void provisions in non-negotiable “Terms of Use” contracts that limit someone’s right to publish genuine, negative reviews online.

Even the United States Supreme Court became involved when they overturned a non-disparagement provision due to it being an unconstitutional restriction on free speech.

Overcome Restrictions On Free Speech & Protect Your Company

Restrictions of free speech caused by non-disparagement clauses are not being taken lightly.

In order to best protect your company as well as your legal clients, these contractual provisions should be drawn up in a way that only includes what is reasonably necessary.

Ensure the language used in the non-disparagement clause limits the restriction on free speech. You will also need to include a reasonable timeframe the provision holds rather than an unending, over-generalized contract.

To find out more about non-disparagement clauses in the digital age, download the original article found in the Newsletter of Illinois State Bar Association.

Article shared by: Law Office of Cathy Ann Pilkington