Non-Disparagement Clauses: What They Cover and Where They Stop

A non-disparagement clause is a contract term in which one or both parties agree not to make negative statements about the other. It commonly appears in severance agreements, settlement agreements, executive contracts and business deals, and it is meant to protect reputations once a relationship ends. These clauses have real legal limits in the US: many non-supervisory employees can’t be required to give up their right to discuss working conditions, harassment-related clauses are restricted, and businesses can’t use form contracts to stop customers from writing honest reviews.

This guide explains what a non-disparagement clause usually covers, where the main limits are, and how to approach one if you’re drafting it or being asked to sign it. It is general information, not legal advice. The rules differ by state and change over time, so talk to an employment or business lawyer about any specific agreement.

What a non-disparagement clause usually covers

Wording varies a lot, but most clauses answer the same questions.

• Who is bound. Often only the employee, or the other party in a settlement. A mutual clause binds both sides, although on the company side it’s usually limited to specific people, such as named executives, or to official company statements.
• What counts as disparaging. Sometimes “any negative statement”, sometimes narrower, such as statements that are false, defamatory or intended to harm the other party’s business.
• Who it protects. The company alone, or also its officers, directors, products and affiliates.
• Where it applies. Usually everywhere: in person, in the press, on social media and on review sites.
• How long it lasts. Often indefinitely, sometimes for a set number of years.
• Exceptions. Well-drafted clauses carve out truthful testimony, reports to government agencies, and communications with lawyers.
• Consequences. Repayment of severance, liquidated damages, or a right to sue for breach.

It’s often paired with a confidentiality clause, which covers the terms of the agreement or the underlying dispute. The two are different: one limits what you say about the other party, the other limits what you disclose about the deal.

Where these clauses appear

Setting	Typical purpose	Main considerations
Severance agreements	Protect the employer’s reputation after someone leaves, in exchange for severance pay.	US labor law limits for non-supervisory employees; carve-outs for agency reports.
Settlement agreements	End a dispute and stop either side from continuing it publicly.	Limits on clauses about harassment and assault; whether the clause is mutual.
Employment contracts	Set expectations from day one, often for senior roles.	Clauses signed before any dispute face extra limits in some areas.
Business agreements	Protect both brands when a partnership, sale or supplier relationship ends.	Usually negotiated between businesses with lawyers on both sides.
Customer terms	Some businesses have tried to stop customers posting negative reviews.	Generally barred in form contracts by the Consumer Review Fairness Act.

The main legal limits in the US

Severance agreements and the NLRB

In its 2023 decision in McLaren Macomb, the National Labor Relations Board held that employers generally can’t offer severance agreements with broad non-disparagement and confidentiality terms that stop employees from discussing their working conditions, because doing so interferes with rights protected under the National Labor Relations Act. The decision applies to employees covered by that law, which generally excludes supervisors and managers. Guidance issued after the decision suggested that narrowly drawn clauses, such as ones limited to statements that are knowingly false and defamatory, may be treated differently. NLRB positions can shift over time, so check the current state of the law with a lawyer before relying on any severance clause.

Harassment and assault claims

Federal law, through the Speak Out Act passed in 2022, limits the enforceability of non-disclosure and non-disparagement clauses agreed before a dispute arises when they concern sexual assault or sexual harassment. Several states have their own, sometimes broader, limits on clauses covering harassment and discrimination. This is an area where a lawyer’s review is essential.

Protected reports and testimony

A contract generally can’t stop someone from reporting possible legal violations to a government agency, cooperating with an investigation or giving truthful testimony. Many employers now write these carve-outs into the clause itself, which also makes it easier to enforce the rest.

Customer reviews

The Consumer Review Fairness Act of 2016 bars businesses from using form contracts, such as terms of service or standard purchase agreements, to prohibit or penalize customers for posting honest reviews, and the FTC can enforce it. Our guide to the Consumer Review Fairness Act explains it in detail. Separately, the FTC’s 2024 rule on consumer reviews targets review suppression through threats or intimidation. See our guide to the FTC fake review rule.

The reputation angle for employers

A non-disparagement clause can reduce the risk of a departing employee or a settled opponent attacking your business publicly. It’s a limited tool, though, and it can backfire.

• It doesn’t reach everyone. Current staff, former staff who never signed one, customers and the public aren’t bound.
• Enforcing it is visible. Suing a former employee over a Glassdoor review can draw far more attention than the review did, and the lawsuit itself may become the story.
• Overbroad clauses may not hold. A clause that tries to cover everything, including protected activity, is more likely to be challenged.
• It can look like a cover-up. If a clause comes to light after a serious allegation, people may assume the business was buying silence.

The better protection is usually a fair exit process, honest references and calm, professional replies on employer review sites. Our guide to responding to Glassdoor reviews covers the last part, and our review management service can handle monitoring and replies if you’d rather not do it in-house.

The reputation angle for employees and individuals

If you’re asked to sign one, the clause affects what you can say publicly about the organization, possibly for years. That matters for your own reputation too, especially if the reason you left is likely to come up in interviews or online.

1. Read what it actually covers. “Any negative statement” is very different from “false and defamatory statements”.
2. Ask whether it’s mutual. If you’re agreeing not to criticize them, it’s reasonable to ask that named executives and official company statements don’t criticize you. That protects what they say to reference checkers and future employers.
3. Check the carve-outs. Truthful testimony, agency reports and conversations with your lawyer, family and financial advisers should be allowed.
4. Agree what can be said about your departure. A short, agreed line (“left to pursue other opportunities”) gives both sides something safe to say. Our guide on what a former employer can say about you covers references.
5. Understand the consequences of breach. Would you have to repay severance? Is there a set damages figure?
6. Get advice before you sign. An employment lawyer can tell you whether the clause is likely enforceable and what’s worth negotiating.

A worked example

This is an illustrative scenario, not a real client. A marketing director is leaving a mid-size agency after a disagreement over strategy. The draft severance agreement includes a one-way clause banning her from saying “anything negative” about the agency, its staff or its clients, forever, with full repayment of severance for any breach.

Her lawyer proposes changes: limit the clause to false or defamatory statements, make it mutual for the two founders and the agency’s official statements, add standard carve-outs for agency reports and legal testimony, and agree a neutral one-line description of her departure for both sides to use. The agency accepts most of them. The result protects both reputations more fairly than the original draft, and neither side is left worrying about an offhand comment at a conference.

How to draft a clause that holds up

If you’re an employer or business drafting one, these points generally make a clause fairer and more defensible. Your lawyer will adapt them to your situation.

• Keep the scope narrow, focused on false or defamatory statements rather than all criticism.
• Include clear carve-outs for protected activity, agency reports and truthful testimony.
• Make it mutual where fair, and specify which people on the company side are bound.
• Consider a time limit. Indefinite restrictions are harder to justify.
• Don’t use it to hide misconduct. If there is a serious underlying problem, fix it. Clauses rarely keep serious issues quiet for long.
• Never put review restrictions in customer form contracts.

Common mistakes

• Copying an old template. Clauses drafted years ago may not reflect current law.
• Relying on the clause instead of good practice. It won’t stop criticism from people who never signed it.
• Threatening to enforce over honest criticism. Threats tend to become screenshots.
• Signing without reading the scope. A broad clause can limit what you say in future job interviews.
• Confusing criticism with defamation. Honest opinions and true statements are treated very differently from false statements of fact. Our guide on defamation vs opinion explains the difference.

Frequently asked questions

Is a non disparagement clause enforceable?

Often, yes, if it’s reasonable in scope and doesn’t cover protected activity. Clauses that are overly broad, that stop covered employees from discussing working conditions, that restrict pre-dispute claims about sexual harassment or assault, or that stop customers posting reviews in form contracts may be unenforceable or unlawful. Enforceability depends on the wording, the setting and the state, so ask a lawyer.

What happens if you break a non-disparagement clause?

It depends on the agreement. Common consequences include repaying severance or settlement money, paying a set amount of damages, or being sued for breach of contract. Whether the other side can actually recover depends on whether the clause is enforceable and what you said.

Can a non-disparagement clause stop me leaving a review?

A business generally can’t use a form contract, such as standard terms of service, to stop customers leaving honest reviews, because of the Consumer Review Fairness Act. A clause you negotiated in a settlement or severance agreement is different and may restrict what you post, subject to other legal limits.

Does a non-disparagement clause stop an employer from giving a bad reference?

Only if it binds the employer. Many clauses bind only the employee. If you’re negotiating, ask for a mutual clause that covers named executives and official references, and an agreed description of your departure.