When your employment ends badly, there’s a great temptation to bad mouth your employer on as many social media platforms as possible. Regardless of the correctness of your posts, be aware you may have signed away your right to ‘fair comment’ or ‘free speech’.
In the complex realm of employment disputes, ‘non-disparagement’ clauses in deeds of release play a crucial role in maintaining a degree of professionalism and civility between parties. The purpose of these clauses is to prevent both employers and employees from making detrimental statements about each other post-settlement, but do they really work? The recent case of Network Ten Pty Limited v van Onselen [2023] NSWSC 829, sheds light on the practicality and enforceability of non-disparagement clauses.
In that case, Dr Peter van Onselen, former co-host of the Network Ten programs The Project and The Sunday Project signed a Deed of Release when parting company with his then employer, Network Ten. The Deed contained a standard non-disparagement clause in which both sides agreed “not to disparage the other or make any statement or publication or authorise any other person to disparage or make any statement or publication which may, or which does in fact bring the other into disrepute or ridicule, or which may otherwise adversely affect their respective reputations”.
Notwithstanding this clause, Dr van Onselen then wrote an article, published in The Australian newspaper, which Network Ten claimed disparaged it, and therefore breached the Deed.
Dr van Onselen argued that the non-disparagement clause was not intended to cover statements made by him in good faith but only to capture statements made in “bad faith that go beyond fair comment”. By way of example, he described his former employer as “the minnow of Australian commercial television”, as being “out gunned and out rated by 7 and 9”, with a “plummeting” share price and “limping along”.
In defending the action, he argued that as a journalist and commentator, his work, by its very nature, involves public commentary on events and matters of interest. Dr van Onselen noted that the information about Network Ten was already publicly available. In addition, he also claimed that preventing him from writing this article amounted to an unreasonable ’restraint of trade’.
Justice Hammerschlag decided that Dr van Onselen was in breach of the non-disparagement clause. His Honour made some very useful comments about the nature of non-disparagement clauses and the effectiveness of restraints of trade, but for our purposes, this part of the judgement best sums it up:
“This is not a defamation case. It is a claim for breach of contract. There is no defence of fair comment. This is a case about the right to free speech, but only to the extent that, by the Deed, Dr van Onselen bargained that right away.”
Since there was no carve-out in the non-disparagement clause that allowed Dr van Onselen to make derogatory statements about his employer in his capacity as a journalist, Dr van Onselen was in breach of the non-disparagement clause. The language he used could not be described as neutral or analytical and the article overall was pejorative.
Understanding Non-Disparagement Clauses
Most of us do not have a national platform like The Australian to comment on a former employer or employee. However, social media is widely available, and you need to take care when posting potentially pejorative statements.
The take aways for employees are:
- Purpose:
Non-disparagement clauses are common components of settlement agreements, aiming to prevent parties from damaging each other’s reputation by offering both parties post-resolution protection.
- Enforceability:
The case of Network Ten v van Onselen demonstrates that non-disparagement clauses are enforceable under the law.
- Context:
Whether a statement is considered disparaging depends on both the context and the language used. Care needs to be taken when making comments about a former employer. If you need to say something, your statements should be neutral, analytical, or informative, to avoid breaching a non-disparagement clause.
How we can help
In the ever-evolving landscape of employment law, the case of Network Ten v van Onselen provides valuable insights into the practical application of non-disparagement clauses. You need to be aware of the consequences of this type of clause. If you must talk about your former employer, then you need to ensure your comments do not overstep the mark.
Whether you are entering into contract negotiations for a new position, or exiting a current one, Andreyev Lawyers can help you to understand your rights and responsibilities. If you would like to speak to someone about an employment law question, call us today on 1300 654 590 or email us.
The information contained in this post is current at the date of editing – 11 January 2024.
