Non-Disparagement Clauses in California: Are They Enforceable?

California has taken significant steps to limit non-disparagement clauses, particularly in the employment context. Understanding the current landscape is important before agreeing to one.

The Legal Framework

California Senate Bill 331 (the "Silenced No More Act"), effective January 1, 2022, restricts non-disparagement clauses in employment settlement agreements and separation agreements. Under this law, employers cannot include provisions that prevent employees from disclosing information about unlawful acts in the workplace, including harassment or discrimination based on any protected characteristic.

Prior to SB 331, California Code of Civil Procedure Section 1001 (from the STAND Act, SB 820) already prohibited non-disparagement clauses in settlement agreements that would prevent disclosure of sexual harassment, assault, or sex discrimination claims.

What Courts Consider

• Context matters: Non-disparagement clauses in commercial contracts (business-to-business) face less restriction than those in employment agreements.
• Consumer reviews: Under the Consumer Review Fairness Act (federal) and California Civil Code Section 1670.8, clauses that penalize consumers for posting honest reviews are void and unenforceable.
• Scope and specificity: Even where non-disparagement clauses are permitted, courts consider whether the restriction is reasonable in scope and whether it infringes on protected speech.

Red Flags in California

• Non-disparagement clauses in employment agreements that broadly silence employees about workplace conditions
• Clauses that restrict discussion of unlawful conduct, harassment, or discrimination
• Penalty provisions tied to consumer reviews or public feedback
• Clauses lacking any carve-out for truthful statements to government agencies

When to Consult a Lawyer

If you are asked to sign a non-disparagement clause as part of an employment agreement, severance package, or settlement in California, consider consulting an employment attorney. California law provides specific protections, and an overbroad clause may be unenforceable or even unlawful.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.