Non-Disparagement Clause Explained (2026 Guide)

What Is a Non-Disparagement Clause and When Is It Enforceable?

A non-disparagement clause is a contractual provision that prohibits one or both parties from making negative, critical, or damaging statements about the other — in writing, orally, or online — regardless of whether those statements are true. It appears most often in severance, settlement, and executive transition agreements. Enforceability today depends on three overlapping legal regimes: the federal Speak Out Act (2022), the NLRB's McLaren Macomb ruling (2023), and a growing patchwork of state statutes.

Key takeaways

• A non-disparagement clause can ban truthful statements — that's what distinguishes it from a defamation claim, and also what makes courts scrutinize it closely.
• The Speak Out Act, 42 U.S.C. § 19403, voids pre-dispute non-disparagement clauses for sexual harassment and sexual assault claims filed on or after December 7, 2022, even if the clause was signed years earlier.
• NLRB McLaren Macomb, 372 NLRB No. 58 (Feb. 21, 2023), holds that offering a broad non-disparagement provision to a non-supervisory employee in a severance agreement is itself an unfair labor practice under NLRA § 8(a)(1).
• California Gov. Code § 12964.5 (SB 331) requires specific verbatim carve-out language in any non-disparagement clause covering employment; clauses without it are void.
• In commercial, B2B, or executive (supervisor-level) contexts, parties retain broad freedom to craft wide-ranging non-disparagement obligations — the restrictions above do not apply.

Why One Template Fails Four Different Situations

Most articles treat a non-disparagement clause as one clause. It isn't. Depending on who is signing and what they are settling, the clause operates under a completely different legal regime. Using a single standard template — the most common mistake — can turn an otherwise valid severance package into an unfair labor practice charge, a void agreement, or a regulatory investigation.

The table below maps the four primary scenarios:

Signing Party & Context	Governing Rule	What's Permitted	What's Automatically Void
Non-supervisory employee, severance agreement	NLRA § 8(a)(1); McLaren Macomb (2023)	Clause limited to "maliciously untrue" (defamatory) statements about the employer only	Any language covering employer's affiliates, agents, or employees; perpetual or undefined scope
Any worker, pre-dispute — sexual harassment or assault	Speak Out Act, 42 U.S.C. § 19403 (2022)	Post-dispute agreements after a claim is filed	Entire pre-dispute clause as to covered conduct
Employee in California employment settlement	Cal. Gov. Code § 12964.5 (SB 331, eff. Jan. 1, 2022)	Clause that includes verbatim statutory carve-out language	Clause without the exact required SB 331 language
Employee in Washington state employment agreement	Washington's 2022 workplace non-disclosure law	Nothing covering discrimination, harassment, retaliation, or assault — even post-dispute	Retroactively voids blanket clauses regardless of when signed
Supervisor or executive, any state	NLRA (generally inapplicable to supervisors) + state contract law	Broadly worded mutual or unilateral restrictions	Must still preserve whistleblower and government-agency reporting carve-outs
Commercial / B2B settlement	State contract law only	Mutual or unilateral, broad scope	Overreaching liquidated damages that function as a penalty rather than a genuine pre-estimate

Oregon's Workplace Fairness Act (ORS 659A.370) adds a similar restriction: non-disparagement clauses covering discrimination, harassment, sexual assault, or bias-motivated conduct are void unless the employee affirmatively requested confidentiality and received a seven-day revocation window.

Understanding which row of this table governs your situation is the entire game. The non-disparagement clause you put in a founder buyout agreement is legally nothing like the one you put in a warehouse worker's severance package.

Non-Disparagement vs. Non-Defamation: The Crucial Difference

Non-disparagement is deliberately broader than defamation. Defamation requires a false statement of fact presented as true. A non-disparagement clause can — and routinely does — prohibit truthful statements if they harm the other party's reputation or business interests.

Courts have confirmed this repeatedly. In one often-cited Georgia case, a court upheld a judgment against former employees who had accurately told others that their employer was under investigation for insurance fraud. The statements were true, but they still breached a clause prohibiting "disparaging or defamatory remarks" — because courts read both terms together to cover different ground, not the same ground twice.

This breadth is also why broad non-disparagement clauses are increasingly vulnerable. The NLRB's General Counsel, following McLaren Macomb, 372 NLRB No. 58, stated explicitly that only a narrowly tailored non-disparagement provision limited to statements "made with knowledge of their falsity or with reckless disregard for their truth or falsity" — the common-law defamation standard — can survive for non-supervisory employees. A clause that reaches truthful workplace criticism or discussions of working conditions chills the Section 7 rights the National Labor Relations Act protects.

The practical result: in employment contexts, a properly NLRA-compliant non-disparagement clause does little more than defamation law already does. Its main value there is deterrence and speed of enforcement — not additional legal protection.

A Worked Mistake-and-Fix Example

The mistake: A mid-size company furloughs 12 hospital support workers. HR sends every departing employee the same severance template used for departing VPs. The relevant clause reads:

"At all times hereafter, the Employee agrees not to make statements to Employer's employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives."

No definition of "disparage." No time limit. No carve-out for NLRB charges, EEOC filings, or talking to coworkers about working conditions. No mention of Section 7 rights.

Why it fails: This is nearly verbatim the language that gave rise to McLaren Macomb, 372 NLRB No. 58. The NLRB held that merely offering this agreement to non-supervisory employees violates NLRA § 8(a)(1) — before anyone even signs it. The mere proffer is the unfair labor practice. The General Counsel's position is that the company cannot enforce this clause regardless of when the employee signed, because maintaining and enforcing unlawfully broad provisions is a continuing violation with no statute-of-limitations shield.

The fix for non-supervisory employees:

1. Limit the prohibition to statements about the employer — not its "parent, affiliated entities, officers, directors, employees, agents."
2. Narrow "disparagement" to statements "made with knowledge of their falsity or with reckless disregard for their truth or falsity" (the NLRB-approved defamation standard).
3. Add an explicit carve-out: "Nothing in this clause limits Employee's right to engage in activity protected by the National Labor Relations Act, including filing charges with the NLRB, discussing wages and working conditions with coworkers, or communicating with any government agency."
4. Add a time limit — one to three years is defensible; perpetual is not.
5. If the employee works in California, add the SB 331 verbatim carve-out under Cal. Gov. Code § 12964.5.

For supervisors and executives, the fix is different: you have more latitude on scope, but you still need carve-outs for SEC whistleblower rules (SEC Rule 21F-17), EEOC charges, and truthful legal testimony. And if the company side is bound, name the specific individuals — "the Company's CEO and General Counsel agree not to disparage Employee" — because a promise by "the Company" with no named people binds no one in practice.

Required Carve-Outs: What the Law Mandates Regardless of What You Negotiate

Certain carve-outs are not optional. A non-disparagement clause that omits them is either void on its face or exposes the drafter to regulatory liability.

Mandatory for all parties:

• Truthful testimony in legal, administrative, or arbitral proceedings
• Communications with and filings to any government agency, including the NLRB, EEOC, DOL, and SEC

Mandatory for non-supervisory employees under McLaren Macomb (2023):

• NLRA § 7 protected concerted activity (discussing wages, organizing, filing labor charges)

Mandatory in California (SB 331, eff. Jan. 1, 2022):

• Verbatim language: "Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful."

Mandatory everywhere for sexual harassment/assault contexts:

• Under the Speak Out Act, 42 U.S.C. § 19403, no pre-dispute clause can bar discussion of sexual harassment or sexual assault allegations. A savings clause stating the agreement complies with the Speak Out Act is not enough — the pre-dispute coverage is void regardless of savings-clause language.

The SEC has also penalized companies for using non-disparagement provisions to chill whistleblower reporting. BlueLinx Holdings was fined $265,000 and required to notify former employees of their right to contact the SEC — a direct consequence of overbroad settlement language.

How to Negotiate a Non-Disparagement Clause

Whether you're the employer or the departing employee, the negotiation centers on five variables: scope (who and what is covered), direction (mutual vs. one-sided), duration, remedy (what happens if someone breaches), and carve-outs (what speech stays protected).

If you're the company:

• For non-supervisory employees, consider whether any non-disparagement clause adds value beyond existing defamation law. After McLaren Macomb, the answer is often "not much."
• For executives and founders, a mutual clause binding named senior officers on your side is more enforceable and more credible than binding "the Company" abstractly.
• Set liquidated damages at a number that is a genuine pre-estimate of harm — courts have enforced a $185,000 liquidated damages provision (Smelkinson Sysco v. Harrell, 162 Md. App. 437 (2005)) and have struck down amounts that look like penalties rather than estimates.

If you're the individual:

• Push for mutual obligations. A clause that only runs against you while the company stays free to speak is asymmetric and negotiable.
• Confirm the company's obligations bind named people — a VP of HR, the CEO — not just "the Company."
• Preserve your right to make truthful statements about your own experience. A clause narrowed to "false or misleading statements" protects you from an overreaching enforcement action.
• Push back on liquidated damages that exceed the severance you're receiving; an oversized penalty can chill speech the law protects and may be unenforceable as a penalty clause.

Use Pactlio to generate a separation agreement with a properly scoped non-disparagement clause — one that accounts for the signing party's NLRA status and includes the jurisdiction-specific carve-outs the law requires. Pair it with a mutual NDA if confidentiality obligations also apply.

For a broader look at related restrictive covenants, see our guides on the confidentiality clause and non-solicitation clause, which often appear alongside non-disparagement provisions in the same agreement. Our separation agreement guide covers how these clauses fit within the full document. And if the context involves a sexual harassment or assault claim, read our detailed breakdown of the NDA sexual abuse ban and the Speak Out Act's full scope.

Common Mistakes to Avoid

• Using one template for all employees. Supervisors and non-supervisory employees face entirely different legal regimes. Applying an executive template to hourly workers is the fact pattern that produced McLaren Macomb.
• Omitting required carve-out language in California. SB 331 (Cal. Gov. Code § 12964.5) requires verbatim statutory language; paraphrasing it is not enough.
• Writing "the Company agrees not to disparage Employee" without naming people. A company cannot bind every employee; name the specific executives who are bound.
• Setting liquidated damages so high they read as a penalty. Courts will strike an in terrorem figure and may void the entire settlement clause along with it.
• Assuming a savings clause cures an unlawfully broad provision. The NLRB General Counsel confirmed that a generic savings clause does not save an otherwise overbroad non-disparagement restriction under McLaren Macomb.
• Forgetting the Speak Out Act applies retroactively to new claims. A pre-dispute clause signed in 2018 is unenforceable for a sexual harassment claim filed today — there is no grandfathering of older agreements.

Sources

• Speak Out Act, Pub. L. 117-224 (42 U.S.C. §§ 19401–19404): https://uscode.house.gov/view.xhtml?path=%2Fprelim%40title42%2Fchapter164&edition=prelim
• NLRB McLaren Macomb, 372 NLRB No. 58 (Feb. 21, 2023): https://www.nlrb.gov/cases-decisions/weekly-summaries-decisions/summary-of-nlrb-decisions-for-week-of-february-21-24-1
• NLRB General Counsel Memorandum on McLaren Macomb (March 22, 2023): https://www.bsk.com/news-events-videos/nlrb-general-counsel-releases-guidance-on-board-rsquo-s-mclaren-macomb-decision
• California SB 331, Gov. Code § 12964.5 (eff. Jan. 1, 2022): https://calcivilrights.ca.gov/wp-content/uploads/sites/32/2022/11/Employment-Separation-and-Settlement-Agreements-Limitations-FAQ_ENG.pdf
• Oregon Workplace Fairness Act, ORS 659A.370: https://www.vaquill.ai/blog/[nda](/glossary/nda)-enforceability-by-state
• Venable LLP — States Regulating Non-Disclosure Provisions (2024): https://www.venable.com/insights/publications/2024/06/the-list-of-states-regulating-nondisclosure
• Smelkinson Sysco v. Harrell, 162 Md. App. 437 (2005) — cited in Littler analysis: https://www.littler.com/publication-press/press/non-disparagement-agreements-worth-it
• Ogletree — Negotiating and Enforcing Anti-Disparagement Clauses: https://ogletree.com/insights-resources/blog-posts/negotiating-and-enforcing-anti-disparagement-clauses-a-primer-for-employers/
• LII / Cornell Wex — Nondisparagement Clause: https://www.law.cornell.edu/wex/nondisparagement_clause

This article is general information, not legal advice. Laws vary by jurisdiction. Pactlio generates professional drafts for review — have a licensed attorney review anything important.