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Non-Disparagement Agreement
"I need a non-disparagement agreement to prevent former employees from making negative statements about our company, with a clause for a £1,000 penalty for breaches, applicable for 2 years post-employment, and covering all forms of communication including social media and public forums."
What is a Non-Disparagement Agreement?
A Non-Disparagement Agreement stops people from making negative comments or harmful statements about each other. It's commonly used when employment ends, as part of settlement agreements, or during business deals where maintaining reputation is crucial.
Under English law, these agreements must be specific about what counts as disparagement and can't prevent someone from making truthful statements or reporting genuine wrongdoing. They're particularly valuable in protecting business relationships, managing publicity around senior departures, and safeguarding company reputations during sensitive transitions.
When should you use a Non-Disparagement Agreement?
Non-Disparagement Agreements work best during high-stakes transitions and sensitive business separations. They're particularly valuable when negotiating executive departures, settling employment disputes, or finalising business partnership breakups where reputation matters greatly.
These agreements become essential before major announcements, company restructures, or when dealing with key stakeholders who hold sensitive information. In England and Wales, they're commonly paired with settlement agreements and confidentiality clauses. Use them proactively during negotiations - waiting until after negative statements emerge can make reputation damage harder to control.
What are the different types of Non-Disparagement Agreement?
- Mutual Non-Disparagement: Both parties agree not to make negative statements about each other - common in settlement agreements and business partnerships
- One-Way Non-Disparagement: Usually favours the employer or larger entity, restricting only one party from making negative comments
- Limited Scope: Restricts disparagement only about specific aspects like business practices or leadership
- Time-Bound: Contains expiry dates or specific periods during which the agreement applies
- Conditional: Links non-disparagement obligations to specific events or behaviours, often used in phased business transitions
Who should typically use a Non-Disparagement Agreement?
- Departing Executives: Often sign Non-Disparagement Agreements as part of their exit package to protect company reputation
- HR Directors: Oversee implementation during employee separations and settlements
- Business Partners: Use these agreements when dissolving partnerships or ending joint ventures
- Employment Solicitors: Draft and review agreements to ensure enforceability under English law
- Company Directors: Negotiate terms to protect corporate interests and maintain stakeholder confidence
- PR Teams: Help shape agreement scope to align with reputation management strategies
How do you write a Non-Disparagement Agreement?
- Party Details: Gather full legal names, roles, and contact information for all involved parties
- Scope Definition: List specific topics, actions, or statements the agreement will cover
- Duration: Determine how long the non-disparagement obligations will remain in force
- Exceptions: Identify legally required disclosures or protected statements that must be excluded
- Consequences: Define clear remedies for breach, including potential damages or injunctive relief
- Review Process: Use our platform to generate a legally sound agreement that includes all mandatory elements
What should be included in a Non-Disparagement Agreement?
- Identifying Parties: Full legal names and roles of all parties bound by the agreement
- Prohibited Actions: Clear definition of what constitutes disparagement
- Permitted Statements: Exceptions for truthful statements and legal obligations
- Duration Clause: Specific timeframe during which restrictions apply
- Consideration: Clear statement of value exchanged to make the agreement binding
- Remedies: Consequences and enforcement mechanisms for breaches
- Jurisdiction: Explicit statement that English law governs the agreement
- Signature Block: Space for dated signatures from all parties
What's the difference between a Non-Disparagement Agreement and a Non-Disclosure Agreement?
Non-Disparagement Agreements are often confused with Non-Disclosure Agreements (NDAs), but they serve distinct purposes in English law. While both protect sensitive information, their scope and application differ significantly.
- Focus and Scope: Non-Disparagement Agreements specifically prevent negative statements or criticism, while NDAs protect confidential information from being shared
- Duration Impact: NDAs typically have longer enforcement periods for protecting trade secrets, while non-disparagement terms often align with specific events or transitions
- Legal Remedies: NDAs usually focus on preventing information leaks with clear financial penalties, whereas non-disparagement breaches often require proving reputational damage
- Permitted Disclosures: NDAs commonly include detailed exceptions for legal requirements, while non-disparagement agreements must allow for truthful statements and regulatory reporting
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