A non-disparagement clause depicts that the employees agree not to disparage or depreciate the company or make any written or stated negative remarks about the company that could adversely affect its reputation – and are almost universal in deeds of release, or other forms of agreement relating to employment separation or settling employment disputes.

In the deed in question, Network Ten also agreed not to disparage its employees, as noted by Ham­mer­schlag J.

“The deed con­tained (in cl 7) what the par­ties have described as a non-dis­par­age­ment clause,” His Honour said.

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“Under it, both sides agreed not to dis­par­age the oth­er or make any state­ment or pub­li­ca­tion or autho­rise any oth­er per­son to dis­par­age or make any state­ment or pub­li­ca­tion which may, or which does in fact bring the oth­er into dis­re­pute or ridicule, or which may oth­er­wise adverse­ly affect their respec­tive reputations.”

After his employment with Network Ten ended, Dr van Onse­len wrote an arti­cle in The Australian, which Network Ten claimed breached the deed. Ten then sought a permanent injunction restraining Dr van Onse­len from any further breaches, which Dr van Onse­len opposed.

Ten alleged the article breached the non-disparagement clause by making it seem “weak, commercially unviable and/or worthless” and by implicating its news ratings were “embarrassingly poor”.

In a judgment handed down last month, Justice Hammerschlag said the article made several implications that could “self-evidently undermine the confidence of investors”.

“This is not a trivial or insignificant matter,” he said.

However, Hammerschlag J was persuaded the article was a “one-off mistake” that Dr van Onselen would not repeat because it would “be obvious that if there were a further non-inadvertent breach, the assertion of lack of risk could not be legitimately put”.

Despite the nature of Dr van Onselen’s work as a journalist involving public commentary on events and matters of interest, His Honour found that he still was in breach of the disparagement clause in his redundancy contract. This, Swaab partner Michael Byrnes told Lawyers Weekly, carries a number of legal implications for those in the employment law space.

“Lawyers should carefully consider the possible impact the terms of a non-disparagement clause might have for the particular person or organisation that will be subject to it,” he said.

“It should not be assumed that the application of the clause will be subject to an actual or perceived need by a former employee to comment on their former employer, even in a professional context. Similarly, employers need to carefully consider what they can say in response to reference checks from prospective employers of the former employee.

“The scope of a non-disparagement clause might even conceivably apply to something as trivial as a former employee giving a negative review of the products or services of their former employer on a consumer feedback website or forum.”

The decision also, as Emplawyer managing principal Michelle Dawson reflected, means that non-disparagement clauses can act as restraints.

“Almost every employment-related dispute is resolved on the basis of terms, which include mutual non-disparagement clauses and obligations. The primary reason for this being in the case is that generally, in employment-related disputes, each of the parties (employers, employees but also any third parties involved in the settlement) has an interest in ensuring that their reputations are not damaged by the other moving forward,” she explained.

“For employment lawyers drafting settlement agreements or deeds of release to resolve employment-related disputes, the decision in the case of Network Ten Pty Limited v van Onselen [2023] reinforces the need to ensure precise drafting, consider relevant carve-outs and take care that clients (both employers and employees) entering into agreements or deeds [that] contain non-disparagement clauses, are advised fully of their obligations arising under such clauses, and that fact that the clauses will likely be enforced by a court against them in the event of a breach.

“Also interesting in this case is that the court hasn’t closed off the possibility that a non-disparagement clause could operate as a restraint of trade in the right circumstances. This will be an interesting space to keep watch on.”

Moving forward, if the terms of the non-disparagement clause are likely to present employees with difficulty, Mr Byrnes said employment lawyers should aim to seek a specific carve-out or exception to accommodate the legitimate interests of the employee, such as good faith commentary in the course of their professional work

“Relying on representations at the time of negotiations not clearly reflected in the terms of the clause can be a risky approach. Mind you, seeking such a carve-out can raise questions as to the future intentions of the employee, impacting negotiations,” he added.

“It is theoretically possible that a non-disparagement clause could even prevent a lawyer subject to such a clause acting against an organisation or people protected by the clause (including a former employer), even decades after their employment has ceased (when conventional legal conflict principles might no longer apply to prevent the lawyer acting). It is also important to remind clients of the importance of complying with the clauses (employer and employee alike), especially in the age of social media.”

And in light of this decision, lawyers should give careful consideration to the drafting and scope of non-disparagement clauses.

There has been a tendency for such clauses to be in very similar, almost boilerplate form. In some instances, a more bespoke approach may be required. This case highlights such clauses will be construed carefully in accordance with the principles applying to commercial contracts. What some might regard as a commonsense or fair approach to the scope of such a clause might not be supported by the language of the clause, which is what the court will be carefully construing,” he concluded.

“Concepts such as a right to free speech and fair comment (as laudable and important as they are) have little relevance to the interpretation of non-disparagement clauses. The law recognises that you can bargain away a right to free speech and then be held to that bargain.”