Legal Question in Employment Law in California

Enforceability of Severance Agreements
I was recently offered a Severance Agreement that included a clause which read, ''You agree that you will never make any negative or disparaging statements (orally or in writing) about the Company or its stockholders, directors, officers, employees, products, services or business practices, except as required by law.'' This seems to be unnecessarily burdensome to me, and could be quite broadly interpreted. I wonder if it is legally allowable for a company to put this kind of an restriction on former employees. ''Never'' is an awfully broad and encompassing term to use in what is essentially a contract. Is such a clause likely to be enforceable?

Asked on 8/20/07, 5:55 pm

2 Answers from Attorneys

Michael Kirschbaum Law Offices of Michael R. Kirschbaum

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Re: Enforceability of Severance Agreements

This type of provision is one we, as lawyers, see quite often in settlement agreements resolving employment disputes. While the wording may vary, the intent is always to limit employees from making negative comments about their employers.

Some employees request the provision be made mutual, to say the company will not say anything negative about them either.

I agree that these provisions are sometimes difficult to enforce, but not because of the word, "never", rather interpreting what is truly "negative" or "disparaging". These words can be extremely subjective.

You certainly can insist they draft the provision more narrowly, running the risk they take the severance off the table altogether. Remember, they don't have to offer you any severance, at all, so if this is one of the conditions they insist upon, and it is non-negtiable, you don't have any bargaining leverage to get them to modify the language or take it out, unless you truly have a basis for a lawsuit against the employer.

In any case, it is usually a good idea to have an attorney review the agreement before you sign away your rights.

Answered on 8/20/07, 7:22 pm

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