Severance Package

We are offering employees a severance package that requires a nondisclosure/nondisparagement clause as part of the agreement – anything wrong with that?

 

Generally, no, there is nothing wrong with that – EXCEPT for one important detail.  The Federal Speak Out Act prohibits employers from enforcing “predispute” nondisclosure and nondisparagement clauses in such agreements, as they relate to sexual harassment or assault.  Accordingly, if the employee has not raised such an allegation BEFORE the severance agreement is signed, the nondisclosure/nondisparagement clauses in the agreement cannot be enforced against the employee if the employee raises such an allegation AFTER signing the agreement.  Accordingly, employers should ensure that all such allegations are disclosed by employees prior to the execution of any such agreement.