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Would a non-disparagement agreement protect my business?

On Behalf of | Jul 6, 2021 | Business Law

Employment contracts may contain provisions designed to prevent your staff members from sharing information that could harm your company. As noted by the American Bar Association, a non-disparagement clause prohibits employees from making negative statements that can damage your company’s reputation.

An employee may post derogatory statements about your business over the internet. If you file a legal action alleging defamation, they may claim in defense that the posted statements are true. A non-disparagement agreement, however, may serve to restrict employees from posting statements that could cause harm to your company.

When might a non-disparagement agreement not be helpful?

Title VII of the Civil Rights Act of 1964 forbids employers from retaliating against an employee who speaks out about company harassment. If a manager or coworker harasses an individual because of race, national origin, gender or sexual orientation, a non-disparagement agreement may not protect your company.

As noted by the U.S. Equal Employment Opportunity Commission, employers face automatic liability for incidents of harassment that result in a wrongful termination. If an employee complains online about a hostile work environment, the EEOC may use the information made available to the public as part of its investigation into an alleged wrongful termination.

How is a non-disclosure agreement different?

A non-disclosure agreement typically requires employees to maintain confidentiality. You may, for example, seek relief if an employee divulges trade secrets. You might consider also creating a confidentiality agreement that includes a non-disparagement provision. This may prohibit employees from sharing or posting negative details about your company.

California businesses may protect their interests with ironclad employment agreements. Contracts made with employees may protect trade secrets and other lawful activities within a company.


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