Backlash Against Non-Disparagement Clauses

Employees Silenced by Non-Disparagement AgreementsIt has become extremely common, if not standard practice, for employers to include non-disparagement clauses in settlement agreements and severance packages they offer to their former employees.  These provisions prohibit employees from saying anything negative about their former employers.  They are extremely broad, since they prohibit true but negative statements and opinions.  In addition, they typically prohibit employees from saying anything negative not just about the company itself, but also about its current and previous owners, directors, officers, employees, subsidiaries and parent companies.

The unfortunate reality is that many employees who sign severance agreements either have not read the entire agreement or do not understand or appreciate many of its provisions.  Even individuals who realize they are being asked not to say anything negative about their former employers generally have no choice but to agree if they want the severance pay and other benefits that have been offered to them.  Of course, for someone who has recently lost his or her job it can be difficult to reject a severance offer over something like a non-disparagement clause.  As a result, employees regularly agree not to disparage their former employers.

A recent article in the New York Time, Laid-Off Americans, Required to Zip Lips on Way Out, Grow Bolder, indicates that there is a growing backlash against non-disparagement clauses.  For example, it indicates that several prominent Democrat and Republican members of Congress have questioned the widespread use and misuse of non-disparagement agreements.

The Times article focuses on Marco Pena, a former technology worker for Abbot Laboratories for 13 years before his job was eliminated as part of a mass layoff.  He and approximately 150 of his co-workers were replaced by foreign workers on H-1B Visas.   Mr. Pena rejected approximately $10,000 in severance pay because the agreement would have required him to agree not to disparage Abbot.  Mr. Pena and 13 of his former coworkers sued, alleging Abbot discriminated against them based on their ages and American citizenship.  Their case is pending.

It may be obvious that non-disparagement agreements allow employers to cover up discrimination, retaliation and violations of other employment laws.  But they also permit companies to sweep other violations of law under the rug by discouraging, if not prohibiting, their former employees from blowing the whistle to the local, state and federal government, the press, or virtually anyone else.  As a result, while they can be very valuable to employers, they can be even more harmful to the public.

Separation agreements usually are written by a lawyer who works for your employer.  As a result, they protect the company but rarely protect your interests.  They also invariably require you to waive important legal rights.  As a result, if you have been offered a separation agreement it can be extremely important for you to have an experienced employment lawyer review it before you decide whether to sign it.

If you have any questions regarding your employment law rights in New Jersey or New York, we welcome you to call our office at (973) 744-4000.

Contact Information