Nondisparagement Clauses in Severance Agreements: A Capstone Contracts Exercise
Forthcoming in Journal of Legal Studies Education, Vol. 34, Issue 1 (Feb. 2017)
48 Pages Posted: 27 Oct 2016
Date Written: October 26, 2016
Nondisparagement clauses in severance agreements are common and generally legal but are controversial. This paper compares clauses in this context with such clauses in other types of contracts, where they may violate relevant employment or consumer protection statutes. In the classroom exercise, students engage in critical thinking to discern why the law permits nondisparagement clauses in severance contracts but not in some other contexts. Students also examine the strategic and ethical question of whether employers should seek nondisparagement clauses.
Keywords: contract law, employment law, nondisparagement, free speech, NLRA section 7, civility, freedom of contract, consumer protection, contract policy
JEL Classification: K20, K12, K31, J83, J53, M12
Suggested Citation: Suggested Citation