As businesses grow and prosper, they often face the risk of negative publicity. Traditionally, companies have dealt with this risk by including non-disparagement agreements in their contracts with employees and clients. But what exactly is a non-disparagement agreement, and how does it work?

In short, a non-disparagement agreement is a clause in a contract that prohibits either party from making negative comments about the other. This can be particularly important for employers, who may be concerned about former employees bad-mouthing the company or revealing trade secrets. Similarly, a business might want to prevent clients from posting negative reviews or otherwise damaging the company`s reputation.

Non-disparagement agreements can take many forms, but they generally require both parties to refrain from making negative comments about the other. This might include verbal statements, written comments, or online reviews. In some cases, non-disparagement agreements may go even further, prohibiting parties from soliciting negative comments or reviews from others.

From a legal perspective, non-disparagement agreements are generally enforceable. However, there are some exceptions. For example, if a party is simply stating factual information (such as a former employee saying that they were fired), that is generally not considered disparagement. Similarly, if a negative comment is made in the context of a legal or regulatory proceeding, it may not be covered by a non-disparagement agreement.

Despite their potential legal enforceability, there are some potential downsides to non-disparagement agreements. In particular, they can be seen as a way for companies to suppress legitimate criticism or whistleblowing. In fact, some states (such as California) have passed laws that restrict the use of non-disparagement agreements.

Overall, non-disparagement agreements can be an effective tool for businesses looking to protect their reputation. However, it`s important to carefully consider the potential downsides, and to ensure that any agreements comply with applicable laws and regulations. As always, consulting with a lawyer experienced in this area can be extremely helpful.