Non-disparagement Clauses: Breaches

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So, non-disparagement clauses are commonly used in settlements and deeds of release, but do you know what they mean? Let's discuss!

Firstly, let's define - non-disparagement clauses often restrict an employee in a contract from saying anything negative about the company to another person, this includes the company's products, goods, and /or services being offered. Typically, these types of clauses are enforceable upon the conclusion of the employment relationship.

Whether or not these clauses can ACTUALLY be enforced was recently investigated in the case of Network Ten Pty Ltd v van Onselen (2023). This was a high-profile case where van Onselen signed a deed of settlement that included a non-disparagement clause, however, it appeared that shortly after, van Onselen released an article that allegedly breached this clause.

Dr van Onselen had claimed that he was not in breach as the non-disparagement clause did not restrict him from making 'fair comments' - however, the Supreme Court found that this was not the case as van Onselen was publishing information that wasn't readily available to the public in an attempt to damage the company.

That being said, the Supreme Court identified that this was a one-off mistake with minimal risk of repeated breaches likely to occur.

HOWEVER - This case highlights the importance of including non-disparagement clauses in settlements and deeds of release as a way to protect the company and its reputation. These types of clauses can be enforced and are valuable when used correctly!

To view the full article by Kelly Godfrey, click here.

If you have any questions about non-disparagement clauses or are unsure if this information applies to you, reach out to the Employii team at [email protected]

Author: Chelsea Finlay (HR Officer).

Non-disparagement Clauses: Breaches

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