How a Contract Clause Can Help Hide Sexual Abuse

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Sep 9, 2017

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ContractMany employees sign employment agreements that include non-disparagement clauses.

These clauses are found in about 25% of executive-level agreements and also in many agreements with lower-level employees.

Most non-disparagement clauses are one-sided — they restrict what the employee can say about the employer but not what the employer can say about the employee.

For example, a typical clause might say:

Employee agrees that she will not disparage the Company or any of its officers, directors or employees.

However, some non-disparagement clauses are mutual.  For example:

Neither the Company nor Executive shall make any oral or written statement about the other party which is intended or reasonably likely to disparage the other party, or otherwise degrade the other party’s reputation in the business or legal community or in the telecommunications industry.

A mutual non-disparagement clause can actually benefit an employee, by prohibiting the company from sharing negative information in a reference check.

What Does It Mean?

But what exactly does “disparage” really mean?

To “disparage,” according to the Oxford English Dictionary, means “[t]o bring discredit or reproach upon; to dishonour, discredit; to lower in credit or esteem.”

Sometimes employment agreements fail to define what’s meant by “disparaging,” or sometimes the term is defined very broadly, as any “negative statement.”

Defamation

Disparagement isn’t the same thing as libel or slander.

Libel and slander are both forms of defamation, which is a tort.  People can be sued for defamation whether or not they’ve signed a contract that includes a non-disparagement clause.

Defamation is the communication of a false statement that harms the reputation of a person, business, institution, product, etc.

They key thing about defamation is that the statement is untrue.

Someone can violate a non-disparagement clause, on the other hand, by saying something that’s perfectly true.

Hiding Abuse?

As the New York Times reports,

employment lawyers say nondisparagement agreements have helped enable a culture of secrecy. In particular, the tech start-up world has been roiled by accounts of workplace sexual harassment, and nondisparagement clauses have played a significant role in keeping those accusations secret. Harassers move on and harass again. Women have no way of knowing their history. Nor do future employers or business partners.

The Equal Employment Opportunity Commission (EEOC), which enforces federal laws prohibiting discrimination, and the National Labor Relations Board (NLRB — which  protects workers’ rights) are studying whether non-disparagement clauses are discouraging workers from speaking up about legal violations in the workplace.

Some non-disparagement clauses have an explicit exception that allows employees to report when their rights have been violated.

For example:

However, these non-disparagement obligations do not limit Executive’s ability to truthfully communicate with the EEOC, DOL, NLRB, and comparable state or local agencies or departments whether such communication is initiated by Executive or in response to the government.

But most non-disparagement clauses don’t include such an exception.

According to the Times, when a former employee of a San Francisco venture capital firm complained to her bosses about sexism, discrimination, and inappropriate workplace behavior, the company “used the non-disparagement provision in her employment contract to threaten her and prevent her from talking about why she had quit her job.”

An employee faced with non-disparagement clause might want to request the addition of the “exceptions” clause above.

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