Employment law attorneys frequently include non-disparagement clauses in settlement agreements that resolve litigation between employers and former employees and in severance agreements between employers and departing employees. In a typical non-disparagement clause, one party agrees not to make any statements, either written or verbal, that disparage or criticize the other party.
In agreeing to a non-disparagement clause, a party agrees not to disparage the other party in exchange for the stated consideration. In some situations, the stated consideration is money: an employer agrees to pay an employee a certain sum for the employee’s promise not to speak ill of the company. In other situations, the parties both promise not to disparage the other, and the reciprocal promises serve as consideration.
Proving damages in an action alleging the breach of a non-disparagement clause can be difficult. Therefore, some employment law attorneys include a liquidated damages provision. A liquidated damages provision requires a party to pay a certain amount for each breach of the non-disparagement clause.