Break Away From The Pack

Will non-disparagement agreements be a thing of the past?

On Behalf of | Apr 7, 2023 | Employment Matters |

Over the last couple of years, employment agreements that restrict the speech and activities of employees – particularly once they’ve left a company – have started to fall. From non-disclosure agreements (NDAs) that prevent people from talking about sexual harassment, discrimination and other wrongdoing to non-compete agreements that have been misused to keep low-wage workers from getting a job at a competing fast-food restaurant, lawmakers and courts are loosening the strings that have tied people to former employers long after they’ve left.

Now, one more type of agreement seems poised to fall (or at least to be used far less frequently): the non-disparagement agreement. In February, the National Labor Relations Board (NLRB) ruled that such clauses are unlawful in any future employment agreements.

These agreements (which are typically broader than non-disclosure agreements) have been used to prevent current and former employees from speaking (privately or publicly) about a company, working conditions or people at the company in any way that can be viewed as negative. While likely no one’s going to monitor your private conversations or texts, venting on social media or speaking to a reporter could easily come with consequences.

Exceptions and limitations

There will be some exceptions – for example, executives at large companies may still be able to be placed under some non-disparagement restrictions. Further, the “disparagement” is only protected if it’s accurate. Otherwise, it could be viewed as defamation.

It’s important to note that when the ruling is finalized, it won’t be retroactive. Therefore, if you’re leaving a company you signed a non-disparagement agreement with years ago, you are likely still bound by that. 

If you’re starting a new business, it’s crucial to know what can and cannot be included in your employment agreements under both state and federal law. In a time of rapid changes in employee rights, legal guidance for employment issues has never been more crucial.