Tuesday, December 2, 2014

What Should You Do About that Ex-Employee Bashing Your Business?

There is arguably nothing more frustrating for an employer than finding out that a former employee has been bashing your business. It is even worse if that employee is spreading lies, and doing so through social media, where misinformation can spread faster than Ebola. What should an employer do in this situation?

One solution is to require departing employees to sign a non-disparagement agreement. A non-disparagement agreement forbids a departing employee from engaging in actions that harm the reputation of the employer, its products, services, or personnel. These are frequently part of separation agreements. In fact, in order for a non-disparagement agreement to be enforceable, the employer must provide the employee with some benefit, like money or healthcare, in return for signing the agreement.

While non-disparagement agreements are popular, their effectiveness is questionable at best. First of all, it is often difficult to prove in court that an ex-employee actually made the negative statements. It might put the ex-employee’s former co-workers in the awkward position of having to testify against their former colleague. Secondly, enforcing the non-disparagement agreement is costly. Compiling the evidence required to bring a case might cost tens of thousands of dollars. Did that former employee’s statement do such harm to the company to justify this expenditure? Third, suing the ex-employee for breaching a non-disparagement agreement opens the company up to the type of public scrutiny it probably hoped to avoid. Worse, it might make it appear like the ex-employee is a whistleblower and the company has something to hide.

Therefore, employers should view non-disparagement agreements more as a deterrent than an effective remedy for an employee bashing the company. If the agreement itself does not deter the ex-employee from making disparaging statement, then threats to enforce the agreement might. Beyond that, it might not be worth taking action to enforce the agreement.

In reality, an employer’s best option might be silence. Legal action or a public response may only serve to inflame the situation. Instead, downplaying the situation might allow it blow over relatively quickly.