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Showing posts from June 26, 2016

The BUSKLAW July Newsletter: Speak No Evil - About Non-Disparagement Clauses (And Their Flip Side)

A non-disparagement clause in a commercial contract discourages one party from saying bad things (whether or not true) about the other party. The clause is  common in litigation settlement agreements and employee termination agreements. In the latter, the purpose of a non-disparagement clause is to prevent the former employee from criticizing their former employer after the discontinuation of employment. In a litigation settlement agreement, this clause is included so that new customers (or vendors) won't be discouraged from doing business with the settling parties. 

As a general rule, a non-disparagement provision in a non-consumer contract is valid and enforceable. But damages resulting from their breach may be difficult to prove, because what is your reputation worth before compared to after the provision has been breached? You would likely be forced to hire expert witnesses to testify about reputational damage substantiated by customer or social media surveys; in the end, the a…