While there are several considerations for employers when drafting & enforcing non-solicitation clauses, a key concern of employment is that by recruiting from the former employer’s ranks and/or soliciting the former employer’s clients/customers, former employees may drain their former employer’s staff or customer/client base. To prevent this from happening, the law permits employers to draft and enforce employee non-solicitation agreements and clauses and client/customer non-solicitation agreements and clauses. Importantly, employers should avoid ambiguity or overreaching when drafting and structuring non-solicitation agreements.
In this blog post, we have reviewed the provision of non-disparagement and why it may be included when drafting restrictive covenants.
Including Non-disparagement Provisions in Restrictive Covenants
Sometimes, an employee may, after leaving a company or business, make disparaging comments concerning the now-former employer, which may end up damaging the reputation of this employer. To prevent this from happening, employers should consider including provisions for non-disparagement when drafting restrictive covenants at the point of employment.
In order to cover comments concerning the former employer’s affiliates, employees, and/or officers, as well as the former employer, non-disparagement provisions should, as a best practice, be drafted broadly. Notably, the scope if entities or persons to whom a departing employee is prohibited from making disparaging comments should also be considered. Generally, the list of such parties should include the media, competitors, investors, and prospective and actual employees.
However, it is also crucial for employers to ensure that a non-disparagement provision includes a clause making it clear that while the employee is not prevented from participating in government investigations, no laws on whistleblower protections would be interfered with by the provision.
In Part XXVIII of this series, we will, in our blog post titled “Confidentiality Provisions in Drafting Restrictive Covenants,” hammer on the importance of including confidentiality provisions and clauses when drafting and structuring restrictive covenants at the point of hiring and onboarding employees.
As usual, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always Rising Above the Bar,
Isaac T.,
Legal Writer, Author, and Publisher.