If you’re a party to any kind of contract in the state of Virginia, you’ll want to learn about non-disparagement clauses. These can appear in all kinds of contracts, and you may see one if you’re an employee or if you and another person are partners for any reason. Additionally, you may see this kind of clause if you receive a settlement from a company or individual for any reason.
Essentially, disparagement means to make negative remarks about a company or an individual. When a contract contains a clause against such activity, the person or company that has agreed to that contract must not say anything disparaging about the other party to the contract. Whether that person is employee, employer, or has some other kind of relationship is irrelevant.
It is not the specific relationship between the two parties that is the focus, but rather what the parties are allowed to say (and do) or not say (and do). This clause is in effect often not just for the term of the contract but sometimes for years after the parties walk away from one another. Most of the time there is a specific limit as to how long the clause is in place.
One of the most commonly used instances of these clauses is in settlement negotiations. When settlements are made, one of the conditions for agreeing to the settlement is often a non-disparagement clause. This would say, for example, that you can’t make disparaging remarks about the company or individual that gave you the settlement. That has to be respected even if you’re telling the truth – and even if you feel people need to know something important about the company.
Partners who are going into business together (or getting out of business) can have these in their partnership agreements, and companies can put them into their employment agreements. They are also sometimes in Virginia contractor agreements to make sure the contractor and/or the person hiring the contractor is not disparaged if things end poorly. Naturally, there’s no guarantee that a person will abide by the clause. However, if he or she does not it becomes breach of contract. That is an offense for which the injured party can seek a remedy.
No matter whether you need to draft this type of clause or you need to litigate because the clause has not been honored by another party, help is available to you. Never avoid seeking legal advice for these kinds of issues. They are very important, and disparaging remarks can harm the reputation (and income) of an individual or a company for a long time into the future. No matter what a person thinks about a company or individual, if he or she has agreed to a non-disparagement clause, that clause must be honored.
Ryan C. Young | Civil Litigation and Contract Attorney | Richmond, VA
