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Non-Disparagement Clauses in Ontario: What You Risk If You Say the Wrong Thing
When you receive a severance agreement after being terminated, the amount of money offered is usually what gets the most attention. What often gets overlooked is the non-disparagement clause a provision that restricts what you can say about your employer, often indefinitely, and whose breach can trigger consequences that include losing your severance or being sued for what you already received. Many employees sign these clauses without reading them carefully, and then find out later that a social media post, a conversation with a former colleague, or a candid reference given to a prospective employer has put their settlement at risk. Understanding what you are agreeing to before you sign matters significantly.
The range is wide. A narrow clause restricts only false statements made with intent to harm. A broad clause may restrict any negative statement true or not about the employer, its management, its products, or its business practices. Some clauses extend to statements made to future employers as part of a reference. The key phrase is "the wording determines your exposure" which is why the specific language in your agreement, not a general understanding of what non-disparagement means, is what you need to review.
Were you asked to sign a severance or settlement agreement containing a non-disparagement clause in Ontario?
The scope of what you are agreeing to, and the consequences of a breach, depend on how the clause is worded. Get your agreement reviewed before signing anything and before making any public statements about your employer.
Call: 1-800-771-7882 Get Your Agreement ReviewedWhat a broadly worded non-disparagement clause can cover
What can happen if you breach a non-disparagement clause in Ontario
Loss of remaining severance payments
Where severance is paid in installments, a breach of the non-disparagement clause may give the employer the right to stop future payments. The specific terms of the agreement determine whether this right exists and how it operates not all agreements tie ongoing payments to compliance.
Demand for repayment of amounts already received
Where the agreement contains a repayment provision tied to non-disparagement compliance, the employer may demand back amounts already paid. The enforceability of such provisions depends on how the agreement is drafted and whether a court would treat forfeiture as an appropriate remedy for the specific breach.
Legal action for damages
The employer may pursue damages for any quantifiable harm caused by the disparaging statement harm to reputation, loss of business, or other demonstrable consequences. Where the statement caused no measurable harm, the practical claim may be limited, but the legal exposure is still real and the cost of defending a claim is itself significant.
Voiding of the settlement agreement
In the most serious circumstances, a breach of the non-disparagement clause may give the employer grounds to argue the entire settlement agreement should be voided effectively restoring both parties to their positions before the settlement. This is a drastic remedy and may not always be available, but it is a risk in agreements where the non-disparagement clause is framed as a material term.
Common ways employees inadvertently breach non-disparagement clauses
Reviewing a severance agreement with a non-disparagement clause or worried about a potential breach?
Getting the specific language assessed before signing, or getting advice before making any public statements after signing, is the most effective way to protect your position.
Get Your Agreement Reviewed Or call us: 1-800-771-7882Frequently asked questions about non-disparagement clauses in Ontario
What is a non-disparagement clause in an Ontario severance agreement?
A non-disparagement clause is a provision in a severance or settlement agreement that prevents you from making statements that could harm your former employer's reputation. The scope depends entirely on how the clause is worded it may cover verbal comments, written statements, social media posts, and communications with former clients or colleagues. Some clauses are narrow, covering only false statements; others are broadly worded and restrict any negative statement regardless of its accuracy. What you are agreeing to is determined by the specific language, not by the general concept of non-disparagement.
Can I still tell the truth about my employer after signing a non-disparagement clause in Ontario?
It depends on how the clause is worded. Many non-disparagement clauses are written broadly enough to restrict truthful negative statements as well as false ones particularly where the clause says you will not make any statement that could harm the employer's reputation, without a carve-out for truthful statements. Whether your statement is accurate does not automatically determine whether you have breached the clause. The specific language you signed is what matters, and getting it reviewed before making public statements is the safest approach.
Do I have to agree to a non-disparagement clause in Ontario?
No non-disparagement clauses are negotiable. You can ask that the clause be removed, narrowed, made mutual (applying to the employer as well as to you), or modified to carve out truthful statements or statements made in legal proceedings. Whether the employer will agree to modifications depends on the circumstances and the relative negotiating positions. Getting legal advice before signing including advice on what modifications to request can significantly improve the terms you end up with.
What happens if I breach a non-disparagement clause in Ontario?
Consequences vary depending on the specific agreement terms, the nature of the breach, and any harm caused. Possible consequences include loss of future severance installments, a demand for repayment of amounts already received, legal action for damages caused by the breach, and in serious cases an argument that the entire settlement agreement should be voided. The practical consequences also depend on whether the employer can demonstrate measurable harm from the statement which affects the size of any damages claim even if a breach occurred.
Are non-disparagement clauses enforceable in Ontario?
Generally yes, where the clause is clearly worded and reasonable in scope. Ontario courts will enforce non-disparagement provisions in settlement and severance agreements where the parties understood what they were agreeing to. Courts may limit the enforcement of clauses that are excessively broad or that produce manifestly unreasonable results. However, employees should not assume a non-disparagement clause is unenforceable without legal assessment the starting assumption is that written terms in a signed agreement are binding.
Questions about a non-disparagement clause in an Ontario severance agreement?
Our team reviews severance and settlement agreements for employees across Ontario, including the scope and enforceability of non-disparagement clauses. Contact us for a confidential consultation before signing anything or making any public statements.
Call us at 1-800-771-7882 or fill out the form below and we will be in touch.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©