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Two somewhat unrelated questions on disparagement, specifically in the context of California:

  1. What is the current standing law with regard to non-disparagement clauses in contracts? I recall a recent law prohibiting them in terms of service agreements, but what about employment an other (e.g. severance) contracts? Are they legally enforceable? Does California have an anti-SLAPP law?

  2. What is the legal definition of disparagement in the context of a non-disparagement agreement? Is it like libel in that it is limited to untrue claims, or are any negative and business-impacting claims subject to it even if demonstrably true?

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California has a law prohibiting non-disparagement clauses in consumer transactions.1 The rule tells us that any waivers of the rule are void. We also learn that the penalty is $2500 for the first violation and $5000 for each subsequent. The consumer can bring the lawsuit.

Non-disparagement agreements are valid in employment and severance agreements. So, yes, they are enforceable as a matter of law. (But note that the NLRB and the EEOC have recently come out against certain broadly worded non-disparagement language.)

CA has an anti-SLAPP statute.2

There is no "legal definition of disparagement in the context of a non-disparagement agreement." If the term is not defined in the contract the court will likely apply the plain meaning rule. Generally speaking, the plain meaning of disparagement is speaking or writing about the subject in a negative light. As such the term "disparagement" will apply to negative speech, regardless of truth. In fact, most non-disparagement clauses will include a word like "criticize." The thing is, false negative comments are already a tort which means that you can get sued for those even without the non-severance agreement. However, a non-disparagement agreement makes it easier for the plaintiff because they do not need to prove damages and they can include liquidated damages in the contract.

This might be confusing because disparagement is a tort recognized in CA.3

A claim of disparagement requires a plaintiff to show a false or misleading statement that (1) specifically refers to the plaintiff's product or business and (2) clearly derogates that product or business.

The point is that the disparagement prohibited in employment contracts is not the recently-defined tort of disparagement but rather the plain definition of disparagement. The disparagement prohibited in employment contracts applies to true statements. (The caveat being that the definition is subject to a definition included in the contract.)


1Cal. Civ. Code 1670.8. (a) (1) A contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer's right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.

2CODE OF CIVIL PROCEDURE 425.16. (a) The Legislature finds and declares that there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.

3 Hartford Casualty Ins. Co. v. Swift Distribution, Inc., 326 P. 3d 253 - Cal: Supreme Court 2014

  • Is the anti-SLAPP statute applicable when an anti-disparagement contract is in effect and the statements are in the public interest, or is the anti-SLAPP statute only for suits for libel or the like and that aren't covered by an existing contract? – Justin Olbrantz Sep 18 '15 at 23:32
  • @JustinOlbrantz take a look at (b)(1). Part (a) tells us that this statute exists so that people can't abuse the judicial process to chill free speech. Part (b)(1) tells us that a defendant can get a motion to strike UNLESS the court finds that the plaintiff will likely prevail on the claim - which in the facts is the breach of the non-disparagement clause. So it's up to the judge who will discern if the plaintiff is abusing the court to shut you up or if they have a legit claim – jqning Sep 19 '15 at 4:03

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