Business

‘Non-disparagement agreements’ are the employment version of a prenuptial agreement

When it comes to non-disparagement agreements, there are implications and considerations for both employers and employees.
When it comes to non-disparagement agreements, there are implications and considerations for both employers and employees. Getty Images/iStockphoto

Hiring an employee or agreeing to accept a job is a lot like marriage. The interview process is akin to dating. Everyone is on their best behavior, employment candidates wait anxiously for “the call back”, employers nervously hope good candidates aren’t “dating” anyone else. Eventually, the candidate and the employer raise the stakes, formal interviews give way to lunch, which leads to meeting the friends (potential co-workers) which leads to, gulp, “do you want to come over” (the working interview at the office). Everyone likes each other and so eventually, the proposal … “we’d love to have you work here.” The candidate accepts.

The first day of work is like wedding planning, so much to do! There’s the direct deposit, the 401k plan, health insurance (do I need dental and vision?), and of course the venue (which office). The candidate is giddy with excitement, the employer is thrilled for the possibilities and then, the pre-nup comes out …. “so, this is out standard confidentiality/non-disparagement agreement, it outlines your obligations in the event of a separation from employment.”

Buzzkill. With the changing technology landscape, websites such as GlassDoor, Great Place to Work and Indeed provide a breeding ground for disgruntled employees to anonymously vent about perceived slights and alleged misbehavior by their former employers. Thus, a common trend in the employer/employee relationship is the non-disparagement agreement.

Non-disparagement agreements have traditionally been used during an employer/employee divorce as part of settlement agreements. In other words, they showed up after things went south. Now, however, employers are increasingly trying to protect against the disgruntled employee review that claims that, not only is the employer a bad place to work, it’s the worst place to work in the history of places to work.

Michael Elkins
Michael Elkins is a 17-year litigation attorney and the founder of MLE .

When it comes to non-disparagement agreements, there are implications and considerations for both employers and employees.

For employers, it is important that the non-disparagement agreement is appropriately drafted. The National Labor Relations Board has held that overbroad non-disparagement agreements may violate Section 7 of the National Labor Relations Act (“NLRA”). Section 7 of the NLRA guarantees employees the right to engage in “concerted activities” for the purpose of collective bargaining or other mutual aid or protection, i.e. union activity. Section 7 protects employees’ rights to discuss the terms and conditions of their employment, to criticize or complain about their employer or their conditions of employment, and to enlist the assistance of others in addressing employment matters.

In order not to run afoul of the NLRA, employers should make sure that their non-disparagement agreements are narrowly tailored, specifically addressing the posting of false or defamatory information. Said another way, the non-disparagement agreement should narrowly define what information it encompasses and should not ban the discussion of topics such as wages, hours, and the terms and conditions of employment.

For employees, this does not mean that they can take to the keyboard with impunity and say whatever they want about a perceived bad employer. To the contrary. Employees need to be mindful that whether a non-disparagement agreement is enforceable requires a case by case analysis. Courts have enforced non-disparagement agreements against former employees who speak negatively about their former employer.

Employees should read these agreements carefully and before signing, consult labor and employment counsel to get an understanding of what they can and cannot do in the event of a separation.

Divorce is never pretty, employer/employee breakups can be even worse. It’s critical that employers and employees consult labor and employment counsel regarding non-disparagement agreements.

Michael Elkins is a 17-year litigation attorney and the founder of MLE Law, a full-service labor and employment/business law firm in Fort Lauderdale. He is also the host of the Game 7 podcast. For more information, visit www.mlelawfirm.com.

▪ This opinion piece was written for Business Monday of the Miami Herald. It does not necessarily reflect the view of the newspaper.

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