What Is a Non-Disparagement Clause?

Definition: Prohibits an employee or party from making negative statements about the company or its products.

Common in separation agreements, settlement agreements, and creator or vendor contracts. Often paired with confidentiality-of-terms wording.

What this clause actually does

A non-disparagement clause restricts what you are permitted to say. Typically it bars statements that are “disparaging,” “critical,” “negative,” or “damaging to reputation,” about the company and often about its officers, products, affiliates and customers, in any medium.

Two features of the standard drafting are worth stating plainly, because they surprise people:

• Truth is usually not a defence under the words of the clause. An accurate, factual account of a bad experience can still be “disparaging” as drafted. If you want truthful statements protected, the clause has to say so.
• It usually has no end date. Unlike most obligations, it commonly runs indefinitely.

Where it bites

• Vagueness with teeth. “Any statement that could reasonably be expected to harm the reputation of the Company” is broad enough to cover a neutral public review, a candid answer in a reference call, a conference talk about a failed project, or a social media post.
• One-way drafting. You are silenced; they are not, including in what they say about you to future employers.
• It reaches people you cannot control. Some versions extend to your agents, representatives, or family members.
• The enforcement mechanism is financial and immediate. Forfeiture of remaining severance instalments, repayment of a settlement sum, or a fixed figure per breach — often triggered by their assertion rather than by any determination.
• It collides with things you may be required or entitled to do. Testifying, responding to a subpoena, reporting suspected unlawful conduct to a regulator, cooperating with an investigation, or discussing pay and working conditions with colleagues.
• In creator and vendor contracts, it can bar an honest review of the product you were paid to use, which is a disclosure problem as well as a contractual one.
• It leaves you with nothing to point to. If you cannot discuss why you left, and no agreed reference exists, you are silent in exactly the conversation where silence is read badly.

What to negotiate

• Make it mutual, expressly including what they say in reference calls and to third parties.
• Narrow “disparaging” to knowingly false statements, or statements made with malice, so an accurate account is not a breach.
• Add an end date.
• Limit who is protected to the company itself, rather than every officer, affiliate, customer and product.
• Add express carve-outs: truthful statements in legal or regulatory proceedings; responses to a subpoena or a regulator's request; reports of suspected unlawful conduct; communications with your own lawyer, accountant or insurer; discussion of your own wages and working conditions; and statements to your immediate family.
• Agree the reference now. Get an agreed reference in writing, with a named contact and agreed wording, attached to the agreement. This is the single most practically valuable thing to negotiate, and it is usually easier to obtain than any of the drafting changes above.
• Remove automatic forfeiture. Any remedy should require an actual determination, after notice and an opportunity to respond — not one side's assertion.
• Add notice and cure. A requirement to identify the offending statement in writing and allow correction or removal resolves most real disputes without anyone losing money.
• Cap or delete liquidated damages.

What a reasonable version looks like

Mutual; limited to knowingly false statements; time-bounded; protecting the company rather than an open list of people; with express carve-outs for legal process, regulators, protected discussions and your own professional advisers; an agreed written reference; and remedies that require a determination rather than an accusation, after notice and a chance to cure.

What to push back on hardest

• A one-way, permanent clause covering any negative statement, true or not.
• Wording that appears to prevent you reporting suspected unlawful conduct, responding to legal process, or testifying truthfully.
• Wording that appears to prevent you discussing your own pay and working conditions.
• Automatic forfeiture of money already earned, on the other side's unilateral say-so.
• Uncapped liquidated damages per breach.
• Extension of the obligation to family members or others you cannot control.
• No agreed reference, combined with a bar on discussing your departure.

Questions worth asking before you sign

• Is it mutual — and does it cover what you say about me in reference calls?
• Does it cover statements that are true?
• When does it end?
• Who exactly is protected by it?
• Can I still testify, or report something to a regulator?
• Can I discuss my own pay and conditions?
• What do I lose if you decide I breached it, and who decides?
• Will you give me an agreed reference in writing, attached to this agreement?

Related clauses

• Confidentiality clause
• Survival clause
• Liquidated damages

Not legal advice. What's My Contract is not a law firm, and this page is general information about how a clause of this type is usually written — not advice about your contract, and not a statement of the law in any particular place. How a clause is read, and whether it can be relied on, depends on where you are, what the rest of the agreement says, and facts a general explainer cannot know. Before you sign, refuse, or act on any clause, have a lawyer licensed in your jurisdiction read your actual document.