Should I Agree to a Gag Clause?

Written by Sattiraju Law Firm on September 11, 2019

An employer’s reputation is one of its most important assets. For that reason, employers often try to control what negative information gets released by former employees. A current employee probably refuses to say anything negative because they fear getting fired. But once an employee has been let go, there is nothing to stop them from trashing the reputation of their former boss. For this reason, many employers try to enforce non-disclosure agreements, sometimes called NDAs or, more colloquially, “gag clauses.”

Gag clauses are often included as part of a severance package when an employee leaves a company or as part of a legal settlement if the employee sues. If you are facing a possible gag clause, you should carefully consider whether to sign it. To answer that question, you should take a closer look at the clause.

What is a Gag Clause?

If you agree to a gag clause, then you are agreeing not to disclose certain details to the public. For example, you might have sued your employer because of sexual harassment and reach a settlement. As part of the settlement, you agree not to tell anyone about what happened or even that you reached a settlement with your employer.

If you break the terms of the gag clause, then you can be sued. Your employer can ask for attorney’s fees and damages as a result of your breaking of the agreement. Gag clauses are contracts and, if you sign one voluntarily, you are bound by the terms.

Many Gag Clauses are Illegal in New Jersey

Before signing, you need to understand the lay of the land in New Jersey.  Under New Jersey law, any NDA that prohibits disclosing details about retaliation, harassment, or discrimination is illegal as against public policy. This means that any provision keeping you from talking about the discrimination you face will not stand up in court.

New Jersey law is very broad. It doesn’t simply outlaw NDAs about sexual harassment, which some other states have passed. Instead, it covers all harassment and discrimination, including conduct based on race, age, religion, etc. It also prohibits gag clauses related to retaliation.

Some Gag Clauses are Okay

Our state law has some exceptions, though. An NDA can prohibit disclosure of trade secrets, business plans, client information, and other proprietary information. So your employer can enforce a gag clause that keeps you from disclosing details about its intellectual property or client lists.

Also, standard non-compete agreements are still valid. These agreements can prohibit you from working for a competitor for a certain amount of time.

Any agreement that contains provisions like these is enforceable in court. If you sign it and violate it, you can be sued.

Should You Sign an NDA?

Whether to agree to a gag clause is complicated. Many different factors are in play, which an experienced attorney can help you understand.

At Sattiraju Law Firm, we are experienced at negotiating favorable severance packages. We also represent employers in severance or employment law disputes.

Contact us today to get individualized advice. You can schedule a confidential consultation with a gag clause lawyer in New Jersey today.

Posted Under: New Jersey Employment Law
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