Once used for keeping legitimate trade secrets under wraps, nondisclosure and nondisparagement clauses are coming under fire for shrouding shady dealings.
Last week, the New York Times shed some much needed light on the subject of nondisparagement agreements. Katie Benner’s article tells the story of an uncomfortable reality for women in the tech industry.
According to the Times piece, AngelList, a venture capital firm, held a corporate retreat last October where their mostly male staff partied with scantily-clad female guests. The testosterone-heavy atmosphere led to situations that made some women working as contracted employees for AngelList personally uncomfortable, such as a board member asking two bikini-clad guests to warm the pool water by jumping in and rubbing their bodies together. Unfortunately for anyone who might make business decisions based on stories like this, those involved are no longer allowed to speak about what went down at the party. As part of a settlement, they signed nondisparagement clauses, which are a kind of gag order that forbids statements or actions that reflect negatively on an organization, its products, or representatives.
What Is A Non Disparagement Clause? Posted by trendy sparky.
Some kinds of gag orders have their place. Companies have a real interest in protecting trade secrets, such as proprietary product formulas. Increasingly, however, that shroud of secrecy has been pulled further than it should really go, tipping the balance from the protection of legitimate secrets to the protection of wrongdoers. Nondisparagement agreements have been popping up in recent years in settlements, employment contracts, and are becoming boilerplate material rather than a deftly wielded tool used only when necessary.
That’s the trouble, isn’t it? “Necessary” is, as always, a matter of perspective. Necessary for who? Necessary for what purpose? Who benefits?
Nondisparagement clauses should be a big red flag for anyone signing a contract. If someone wants you to sign a legally binding agreement to remain silent on some matter, especially if it means giving up your right to complain about bad service, faulty products, or even maltreatment and harassment, wouldn’t you be curious what it is, exactly, that they’re afraid you’ll talk about?
While the tech industry may deem nondisparagement clauses a necessary protection against media indictment for rampant sexism, other ne’er-do-wells have their own reasons to want you to STFU. The practice of slipping these gag clauses into user agreements made news a few years ago when customers were subject to litigation for complaining about shoddy business dealings by pet sitters and mail order novelty stores. While incidents like these inspired the Consumer Review Fairness Act, signed by then-President Obama earlier this year and which protects the rights of consumers to leave online reviews, some uses of nondisparagement clauses are much shadier.
For example, the guy who seems excited to undermine consumer protections, but who inserts gags just about anywhere he can. Donald Trump would probably be more infamous for his use of nondisparagement clauses if people were willing to talk about them. During the 2016 campaign, Trump required even his unpaid volunteers to sign unusually restrictive gag orders, which effectively forbid them from criticizing him, his family, any of their businesses or products, or the campaign itself, for the rest of their lives. It’s not the first time he’s covered his arse this way, either. His 1991 divorce settlement contains an order gagging Ivana from speaking about their marriage without his permission. What else has he hidden away through the threat of expensive, drawn-out legal action? If it’s so crucial to keep these things hidden, wouldn’t knowing them be even more important than sussing out which tchotchke vendors are unreliable?
Nondisparagement clauses are telling. If only we could hear what people aren’t allowed to say.