Non disparagement agreement template

Content

Non-disparagement agreements are designed to protect a company's reputation by preventing current or former employees from making damaging statements about the business.

Find out how they work, what they should include and when to use them in this free guide.

What is a Non-Disparagement Agreement?

A non-disparagement agreement is a legal document that prevents one party from making defamatory or damaging statements about another. Disparagement means any comment that could be interpreted as a criticism of a business, even if the statement itself may be true.

Businesses use non disparagement agreements to make sure that current or former employees can't harm the company's reputation through negative public statements.

These agreements help the business to maintain a positive image and prevent potential damage to its reputation.

What is the purpose of a Non-Disparagement Agreement?

At a basic level, the purpose of a non-disparagement agreement is to protect a company's reputation. It does this by setting clear boundaries on what employees can and cannot say about the company. This could range from its products and services to its employees.

Who is responsible for managing Non-Disparagement Agreements?

The company's HR or legal team usually manages non-disparagement agreements (or a non-disparagement clause). They are responsible for drafting the agreement, ensuring it is legally sound and enforcing its terms if necessary.

What does a Non-Disparagement Agreement typically include?

The contents of a non-disparagement agreement can vary depending on the company and the specific circumstances. However, most non-disparagement agreements contain these main components:

Parties involved: The agreement should clearly state the names and contact information of both the company and the employee.
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Scope of the agreement: It should then outline the specific actions that are prohibited under the agreement and should clearly define what constitutes disparagement too.
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Duration of the agreement: This outlines how long the agreement is in effect, including when it starts and ends. It might also include information about what happens after the employee leaves the company.
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Consequences for breach: This part covers the consequences if the employee breaches the agreement. It may cover financial penalties, legal action, or other remedies.
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Dispute resolution: This clause outlines the steps to be taken if a disagreement arises. These steps could include renegotiation, mediation, arbitration, or litigation.

When should you use a Non-Disparagement Agreement?

A non-disparagement agreement should be used in situations where there is a risk to the company's reputation due to potential negative statements made by an employee. This could be during the course of employment, upon termination, or even after the person has left employment.

Below, we've outlined just some of the scenarios where a non-disparagement agreement might be beneficial:

‍Employee termination or resignation: When an employee leaves a company, especially under contentious circumstances, they might feel inclined to speak negatively about their former employer. A non-disparagement agreement can help prevent this and protect the company's reputation.‍
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Settlements and severance packages: Non-disparagement clauses are often included in settlement agreements or severance packages. This makes sure that the departing employee doesn't damage the company's reputation after receiving their settlement or severance.
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High-risk positions: If an employee is in a position where they have access to sensitive company information or if they are a public-facing representative of the company, a non-disparagement agreement can help protect the company from potential harm.
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‍During employment: Non-disparagement clauses can also be used during employment to foster a positive work environment and discourage employees from publicly criticizing the company or their colleagues.

Remember, while non-disparagement agreements can be a useful tool, they should be used judiciously and fairly. It's a balance - you should make sure that such agreements don't infringe on an employee's rights to free speech or their ability to report wrongdoing in the workplace.

What is the traditional workflow for managing Non-Disparagement Agreements?

Understanding who manages non-disparagement agreements is one thing, but what does this process look like in greater detail?

Well, that largely depends on how businesses approach these agreements, and whether they use a non-disparagement agreement template.

This can be cumbersome for businesses that operate without a non-disparagement agreement template. It means drafting each contract from scratch, reviewing it internally and obtaining necessary approvals - all of which takes a lot of time and valuable resources.

How can a Non-Disparagement Agreement template help?

Fortunately, many businesses will have a non-disparagement agreement template to hand today or non-disparagement clauses as part of an Employment Termination Agreement, for example.

Having one stored and ready for customization eliminates the need for HR or legal teams to draft each contract from scratch.

It also means that most terms within the non-disparagement agreement are standardized, leaving less room for errors and inconsistencies.

But even with a non-disparagement agreement template in place, manually managing these contracts can be a repetitive and time-consuming process for HR and legal teams. That is, unless you automate them.

How can automation improve how you manage Non-Disparagement Agreements?

A contract management software, like Juro, can help by automating the contract admin tasks that HR and legal teams spend the most time on.

Juro's AI contract collaboration platform enables your team to create, execute and manage contracts 10x faster than traditional tools. For those creating Non-Disparagement Agreements, the following features are useful:

1. Automated contract templates

HR and legal teams can create flexible non-disparagement agreement templates that are quick and easy to edit, amend or adjust in the software's rich-text editor.

2. Conditional logic

Instead of generating mismatched contracts for different employees, users can include certain conditions in a non-disparagement agreement based on the employee's specific needs. This makes it easier to customize the non-disparagement agreement templates without adding manual admin work.

3. Integrations with HR platforms

The software integrates with platforms like Workday, BambooHR and others, enabling data from employee profiles to be pulled directly into contract fields, thereby eliminating manual data entries. This makes it quick and easy to populate non-disparagement agreement templates. ‍

4. Mass generation

‍The software's bulk actions allow HR teams to create, auto-fill and send out non-disparagement agreements for signing on a large scale – this is ideal for businesses that want to use non-disparagement agreements for all their employees.

5. Browser-based redlining

‍Non-disparagement agreements can sometimes be confusing for employees, but the software's in-browser contract negotiation features allow employees to add redlines directly onto the contract.

6. Legally binding eSignature

‍Employees can quickly sign non-disparagement agreements as soon as they've read and received them using the software's mobile-responsive electronic signature feature.

Automate Non-Disparagement Agreements with Juro

If you're looking for a scalable way to create, negotiate, sign and share non-disparagement agreements, our team of specialists at Juro can help you to explore the benefits of automating these agreements.

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Frequently Asked Questions

What is a non-disparagement agreement template?

A non-disparagement agreement template is a ready-made contract a business can adapt whenever it wants someone to agree not to criticize it in public. Employers most often use it with departing employees, and it records who it covers, what counts as disparagement, how long the promise lasts and what happens if it's broken.

Do I need a non-disparagement agreement when an employee leaves on good terms?

Usually, yes, if their opinion could affect how customers or future hires see the business. Goodwill at the exit interview doesn't bind anyone, and relationships can sour months later when a former employee joins a competitor or posts a review. A short agreement signed at departure sets clear expectations while both sides are still on good terms.

How is a non-disparagement agreement different from an NDA?

A non-disclosure agreement (NDA) stops someone sharing confidential information, such as trade secrets or customer lists. A non-disparagement agreement stops them making negative statements about the business, even when those statements use no confidential information at all. Many exit packages include both, because each one covers a gap the other leaves open.

How broad should the definition of disparagement be?

Define it tightly enough that a court would likely enforce it, usually by covering public statements that damage the company's reputation and leaving out honest references and private conversations. Very broad clauses that ban any negative comment forever are the ones most likely to be challenged. Employees also commonly ask for the promise to be mutual, so the company agrees not to disparage them either.

Can a non-disparagement agreement stop someone reporting wrongdoing?

Normally, no. In most places, these agreements can't stop someone reporting illegal conduct to a regulator or giving evidence in legal proceedings, and a clause that tries to do so may be unenforceable. Include a clear carve-out for these situations so the rest of the agreement stands up.

Can I use this template as it is?

It gives you a sound starting point, but you'll usually need to adjust the scope and duration to fit each departure and check the rules where the employee works. For specific legal advice on your contract templates, consult an attorney.

What's the easiest way to manage non-disparagement agreements?

Set the agreement up as a template in Juro once, then let HR generate each one from it, filling in the employee's details and the end date of the obligation. If legal changes its position on scope or carve-outs, it edits that single template and every new agreement picks up the change. Signed agreements are stored together, so you can search them to see which former employees are still bound and when each obligation ends.

Can Juro create a template like this for me?

Yes. Operator, Juro's AI drafting feature, can build a non-disparagement template from your existing contracts, picking up your drafting style and the positions you normally take on terms like scope and mutuality, so the draft matches your risk appetite. Your legal team reviews and approves that first version before HR sends it to anyone.