Healing the workplace means letting ex-employees tell their side of the story without fear of retribution. It’s time to stop signing them into silence

It’s time to rethink non-disparagement clauses in separation agreements

 As published in Fortune Magazine

By Christine Shen 

For years, it has been standard to include non-disparagement clauses in separation agreements between employers and employees. These clauses prohibit the departing employee from ever saying anything negative or “disparaging” about the company, in exchange for a sum of money. Sometimes, but not always, these clauses are mutual, which means that the employer cannot technically disparage the employee either. 

But far too often, these clauses are aimed to instill fear, preventing the departing employee from speaking truthfully about festering problems within a workplace culture, or from sharing their side of an employment story. Sometimes, information needs to be brought out of the echo chamber of a human resources department and gut-checked in the broader court of public opinion. For example, the behavior of a rainmaker at an organization might be seen as acceptable or par for the course in that specific climate or culture–but when examined by a broader public with critical thinking skills and without organizational biases, that behavior might be seen in a different light. Empowering employers to shield their bad actors behind non-disparagement clauses prevents the natural societal checks and balances system from serving its purpose. It also eliminates all accountability for destructive and sometimes criminal behavior that causes serious social and financial damage in the broader community–including preventable suicides, low worker morale, and increased workplace absenteeism, as well as escalating systemic mental and physical health costs nationwide.

Beyond this, even if a clause forbids an employer from technically saying anything negative about their former employee, it may be near-impossible for an employee to take meaningful legal action against an employer if they hear that they are still being disparaged. Employees who currently work for the company and who might have knowledge of the disparagement will have a hard time sharing hard evidence about the disparagement of a former colleague. This is because they may be under confidentiality provisions themselves, and not to mention, they do not want evidence to be linked back to them. Additionally, if a former employer offers a negative verbal or written reference to a future employer, the ex-employee might receive a rejection and never know that this was the reason they did not get the job.

Most people do not want to take legal action after hearing that a former employer is disparaging them, whether out of fear of career consequences or lack of financial resources. But even if this is the case, when no one is bound by a non-disparagement clause, then at least the employee can share their side of things with less fear of retribution. Many are doing this anonymously in places like Blind or Glassdoor, or publicly on social platforms like TikTok and LinkedIn. Should someone outright lie about a person or devise a story that is completely concocted, there is recourse that people can potentially take by making use of defamation law.

New Jersey and Rhode Island are two states that are considering or have already limited the use of non-disparagement agreements in severance agreements, especially when civil rights abuses are taking place. In California, a non-disparagement clause cannot stop the employee from speaking about discrimination, harassment, or retaliation at work. On a federal level, the National Labor Relations Board announced last year that it is evaluating whether employers can use non-disparagement clauses moving forward. Globally, the United Kingdom is calling for a ban on non-disclosure agreements in sexual harassment cases. And even in states without any laws, employers can choose not to include or enforce these clauses in employment or separation agreements.

We will never be able to prevent or predict all workplace malfeasance. Human nature will inevitably rear its head, and incentives are set up so that a lot of bad behavior is swept under the rug in the name of increasing profit and productivity. But the truth will eventually come out, even if it’s been signed into silence in the past. If employees and workers are able to bring legitimate stories and valid information to light without fear of legal retribution, we will actually make meaningful progress in healing our workplace cultures and the people within them.