Non-Disparagement Clause

Limits statements one or both parties may make about the other, often in separation, settlement, or executive transition agreements.

Reviewed by GC AI Solutions Team•Updated August 2026

Definition

A non-disparagement clause is a contractual provision under which one or both parties agree not to make statements that criticize, demean, or damage the reputation of the other party. It appears most often in separation, settlement, and executive transition agreements. Unlike a confidentiality clause, which protects specific information, a non-disparagement clause restricts negative speech even when the statement is truthful, so its enforceability is limited by labor law, whistleblower protections, and several state statutes.

Bars statements that criticize or damage the other party's reputation, including truthful ones
Names who is bound, which for a company usually means a defined list of officers and directors rather than every employee
Carves out testimony, government reporting, and other legally protected speech
Sets the remedy for breach, often clawback of severance, liquidated damages, or injunctive relief
Runs mutually or in one direction, which is the most negotiated point

Post-2023 clauses increasingly carry explicit carve-outs for protected concerted activity, whistleblowing, and truthful testimony.

What It Does

A non-disparagement clause shifts the risk that one party will speak badly about the other after the relationship ends. For in-house counsel, it does two jobs at once: it protects the company's reputation when an executive or employee departs, and it creates legal exposure if the clause is drafted too broadly. Since the NLRB's 2023 McLaren Macomb decision, simply offering a non-supervisory employee a severance agreement with a sweeping non-disparagement provision can itself be an unfair labor practice. A practical test: if your clause would stop a departing employee from reporting harassment to the EEOC, talking to the NLRB, or testifying truthfully under subpoena, it is drafted too broadly to enforce and may be unlawful on its face.

When You'll See It

Non-disparagement shows up most in separation agreements, settlement agreements, executive transition and retirement agreements, and severance plans. It also appears in commercial settlements, co-founder departures, and some vendor and partnership agreements where reputation is part of the deal. In employment documents it sits near the release of claims and confidentiality covenant; in commercial settlements it sits near the release and the no-admission language.

It matters most where the departing party has a platform or an audience: a founder, a senior executive, a public-facing employee, or a counterparty in a dispute that drew press. The more the other side could move your reputation, the harder you negotiate who is bound, what counts as disparagement, and which carve-outs survive.

Examples

Twilio Inc. / Jeff Lawson

Letter AgreementScope-limitedMutual2024

"To the fullest extent permitted by law and except as otherwise provided in this Agreement, you agree that you will not disparage or encourage or induce others to disparage the Company or any of the Released Parties. The Company agrees to not disparage or encourage or induce others to disparage you."

Source

Yum China Holdings, Inc. / Andy Yeung

Transition and Advisor AgreementTestimony carve-outMutual2024

"you shall not disparage the Company, its agents or employees in any manner at any time (either during or following your employment with the Company)... The Company's executive officers and directors shall not disparage you in any manner at any time... Notwithstanding the foregoing, nothing herein shall prevent either you, the members of the board of directors of the Company, or any of the Company's employees or representatives from testifying truthfully in any legal or administrative proceeding where such testimony is compelled or requested, or from otherwise complying with applicable legal requirements."

Source

Shutterstock, Inc. / Jarrod Yahes

Transition Agreement and General ReleaseMultiple carve-outsOne-Sided2024

"You will not disparage Releasees, or issue any communication, written or otherwise, that reflects adversely on or encourages any adverse action against Releasees, except: (a) if testifying truthfully under oath pursuant to any lawful court order or subpoena, (b) otherwise responding to or providing disclosures required by law, or (c) while engaging in the activities referenced in Paragraph 10 of this Transition Services Agreement."

Source

Traws Pharma, Inc. / Mark Guerin

Separation Agreement and Release of All ClaimsNames specific platformsOne-Sided2025

"Guerin agrees that they shall not disparage the reputation of any Released Parties to any person or entity whatsoever. This includes written statements, oral statements, or other conduct that could reasonably disparage any Releasee's reputation (including, but not limited to, any third-party media outlet, Glassdoor, Yelp, Facebook, Twitter, LinkedIn, Instagram, TikTok, Snapchat or other social media service or personal website)."

Source

Usio, Inc.

Separation and Mutual Release of Claims AgreementReputation and goodwillMutual2023

"Employee shall not disparage the business reputation of the Company (or its management team) or take any actions that are harmful to the Company's goodwill with its customers, content providers, bandwidth or other network infrastructure providers, vendors, employees, the media or the public. The Company shall not disparage the business or personal reputation of Employee or take any actions that are harmful to Employee's business or personal reputation."

Source

Negotiate

If you're the employer or releasing party:

You want protection

Make the clause mutual only as to a named, defined group on your side, such as your officers and directors, so you are not policing every employee's offhand comment.
Define disparagement in writing rather than leaving it to interpretation, and tie a real remedy to breach, such as clawback of unpaid severance or liquidated damages.
Build in the carve-outs the law requires anyway: truthful testimony, government and agency reporting, and protected concerted activity. A clause without them is both unenforceable and a liability.
For senior or public-facing departures, add a non-solicitation and a confidentiality covenant alongside it rather than relying on non-disparagement to do all the work.

If you're the employee or individual:

You want to stay free to speak

Insist the clause run both ways, and that the company side bind named executives, not just the abstract "Company," so the promise is enforceable in practice.
Narrow disparagement to false or misleading statements, and preserve your right to make truthful statements about your own experience.
Confirm the carve-outs for whistleblowing, agency charges, and testimony are explicit, and add a Defend Trade Secrets Act immunity notice if one is missing.
Push back on liquidated damages that exceed the severance you are receiving, since an oversized penalty can chill speech the law protects.

Reputation is the asset this clause protects, so spend the negotiation defining what actually counts as harming it.

Red Flags

A clause offered to a non-supervisory employee with no carve-out for protected concerted activity, which can be an unfair labor practice under McLaren Macomb
No carve-out for government reporting or truthful testimony, which makes the clause unenforceable and can draw SEC scrutiny under the whistleblower rules
A pre-dispute non-disparagement covering sexual harassment or assault claims, which the federal Speak Out Act renders unenforceable
In California, the absence of the Silenced No More carve-out language for disclosing unlawful workplace conduct
A one-sided clause binding the individual while the company stays free to speak, or one binding “the Company” with no named people, so there is no one to enforce it against
Liquidated damages far larger than the consideration, which courts may strike as an unenforceable penalty

Non-Disparagement Clause FAQs

Is a non-disparagement clause enforceable?

Usually yes, as an ordinary contract term, but with limits. The NLRB's McLaren Macomb decision restricts broad clauses for non-supervisory employees, the federal Speak Out Act bars pre-dispute clauses covering sexual harassment and assault claims, and whistleblower rules prohibit any clause that blocks reporting to a government agency. A clause with the right carve-outs is generally enforceable; one without them often is not.

What is the difference between a non-disparagement clause and an NDA?

A confidentiality clause or NDA protects specific information from being shared. A non-disparagement clause restricts negative statements about a party, even when the statement is true and even when no confidential information is involved. They often appear together but do different jobs.

Should you sign a non-disparagement clause?

It depends on what you receive and how it is drafted. Before signing, confirm the clause is mutual, that disparagement is defined narrowly, that the carve-outs for testimony and government reporting are explicit, and that any penalty for breach is proportionate to the consideration you are getting.

Are non-disparagement clauses legal in California?

Yes, but California's Silenced No More Act limits provisions that would prevent disclosure of unlawful acts in the workplace, such as harassment, discrimination, or retaliation, and requires specific carve-out language. A California clause that lacks that language risks being unenforceable.

How long does a non-disparagement clause last?

That depends on the contract. Many run indefinitely, while others are tied to a defined period or to the survival section of the agreement. The duration should be stated expressly, because an unbounded restriction on truthful speech is harder to enforce.

What happens if you breach a non-disparagement clause?

The remedy is whatever the contract specifies, commonly clawback of unpaid severance, liquidated damages, or an injunction. Proving breach and resulting harm can be difficult, which is why companies often tie the clause to a concrete financial consequence rather than relying on a damages claim.

Related Clauses

This content is for informational purposes only and does not constitute legal advice.