... and they lived happily ever after.
Does this happen in our corporate lives? Particularly after parting ways?
When any relationship comes to an end, both sides have their own versions on what (if anything) went wrong.
More often than not, you get to hear sob stories or abuses about each other - depending on which side you are lending your ears to. Badmouthing, derogatory comments and what not ... very common when there is a disengagement, particularly if not at a happy note.
Such actions result in definite lowering of image of the parties against whom this blabbering takes place, particularly in social media. Even people who have no stakes in the subject matter are just itching to join the bandwagon, without even bothering to checking any facts.
This is so true about Employment Agreements.
Avoiding badmouthing or passing derogatory marks about the company by any employee / ex-employee is one of the challenges for the companies as such badmouthing or derogatory marks could adversely damage the reputation of the company – it applies in the reverse as well. A negative feedback or passing bad remarks about an ex-employee by an ex-employer could adversely impact the career prospects of the concerned professional.
To get rid of this malice, the parties could well incorporate a non-disparagement provision in in employment agreements – in many cases, it is a crucial and instrumental provision to prevent employee or employer from passing bad or derogatory remarks against each other.
The underlying intent of this provision is to prevent an employee or employer from spreading negative image or intentional damaging the image of the other party. You buy silence of the other party - by offering incentive under the contract to keep silent and penalising, if the party goes astray.
Key components of a non-disparagement provision:
Timeline:Timeline will describe the period of time in which non-disparagement provision will be in effect. It can be limited to the tenure of the employment or go beyond tenure of employment as well – the latter may be more important in majority of the cases. As long as the employment continues, the parties may not like to go on a rampage as much as they would once the contract is terminated.
Scope: Typically, employee and employer are the parties to the provision, In case of the employer, employee may be restricted from passing derogatory comments about the company, its business, officers, employees, personnel etc. In case of the employee. On the other hand, employer may be restricted from passing derogatory comments against the employee and family and friends and employee work profile.
The non-disparagement clause could specify the restrictions in detail – e.g., no posts on social media, no articles / open letters in media platforms, no interviews and so on.
Exceptions: Following may be exceptions to a non-disparagement provision
- a) Official communications between the employer and employee and any related parties during the employment and thereafter for a certain period of time which needs to be put on official record in any manner.
- b) Communications with statutory and regulatory authorities to the extent employer or employee is mandated to disclose the truthful information about other even it could adversely affect the other party.
Originally published July 24, 2023.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
