Non-disparagement clauses in California are often unenforceable. State law voids any clause that stops a worker from discussing illegal workplace conduct, bars confidentiality in settlements of harassment or discrimination claims, and strips businesses of the right to silence honest consumer reviews. Federal labor and securities rules add more limits on top. A narrower clause that respects those boundaries can still be enforced, but a broad “don’t say anything bad about us” provision usually cannot.
Employment and Separation Agreements
The core rule for workers comes from the Silenced No More Act, which amended California Government Code section 12964.5. An employer cannot require a worker to sign any non-disparagement provision that blocks disclosure of information about unlawful acts in the workplace. The rule covers offer letters, onboarding paperwork, ongoing employment contracts, and severance agreements.1California Legislative Information. California Government Code 12964.5
To survive, the clause has to include language in substantially this form: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.” Without that carve-out, the provision is void as contrary to public policy.1California Legislative Information. California Government Code 12964.5
“Unlawful acts in the workplace” is defined broadly. It reaches harassment, discrimination, and retaliation, but also any other conduct the employee reasonably believes is illegal. The employee does not have to be right about whether a violation actually occurred. A reasonable belief is enough, which defeats the common employer argument that nothing was ever proven.
There’s also a procedural piece people miss. An employer offering a separation agreement must tell the employee they have the right to consult an attorney, and must give them at least five business days to do so. Skipping that step undermines the agreement before enforcement is even on the table.1California Legislative Information. California Government Code 12964.5
Settlement Agreements for Harassment or Discrimination Claims
Settlements have their own rule under California Code of Civil Procedure section 1001. A settlement cannot restrict disclosure of factual information when the underlying claim involves sexual assault, sexual harassment, workplace harassment or discrimination, retaliation for reporting those issues, or housing discrimination. A confidentiality clause in that kind of settlement is void by statute.2California Legislative Information. California Code of Civil Procedure 1001
Two things can still stay private. The dollar amount of the settlement can be kept confidential. And at the claimant’s request, the agreement can shield the claimant’s identity along with any facts that would reveal it. That identity protection does not apply when a government agency or public official is a party.2California Legislative Information. California Code of Civil Procedure 1001
Settlements of disputes outside those categories, such as a commercial disagreement or a contract performance fight, are not covered by section 1001. Non-disparagement and confidentiality terms in those settlements are more likely to hold up.
Consumer Reviews
If a business tried to make you promise not to post a negative review, that clause is void. California Civil Code section 1670.8, often called the Yelp law, makes it illegal for a business to include any contract provision that strips a consumer’s right to make statements about the seller, its employees, or its goods and services. The business also cannot threaten to enforce such a clause.3California Legislative Information. California Civil Code 1670.8
Federal law reaches the same result nationwide. The Consumer Review Fairness Act, 15 U.S.C. ยง 45b, voids any standardized contract provision that prohibits or restricts consumer reviews from the moment the contract is formed. Violations are treated as unfair or deceptive practices under FTC rules, so the FTC and state attorneys general can go after businesses that use gag clauses.4Office of the Law Revision Counsel. 15 USC 45b Consumer Review Protection
If a business threatens to sue you over a negative review in California, both state and federal law are on your side, and the contract claim fails before anyone argues about what you actually said.
Federal Rules That Add More Limits
NLRB and Severance Agreements
In 2023, the National Labor Relations Board ruled in McLaren Macomb that merely offering a severance agreement with a broad non-disparagement clause violates the National Labor Relations Act. The Board’s view is that these clauses discourage employees from exercising their rights to discuss wages, working conditions, and other workplace issues with coworkers or the NLRB.5National Labor Relations Board. Board Rules That Employers May Not Offer Severance Agreements Requiring Employees to Waive Rights
The rule reaches most private-sector employees in California. An employer does not have to enforce the clause for it to be unlawful. Presenting the agreement is enough. A 2026 NLRB decision in Valley Radiology reinforced that approach, with an administrative law judge finding that proffering a separation agreement with confidentiality and non-disparagement terms was itself unlawful.
SEC Whistleblower Rule
If you work for a publicly traded company or in the financial industry, SEC Rule 21F-17(a) prohibits anyone from taking action to prevent a person from communicating with the SEC about a possible securities law violation. That includes enforcing or threatening to enforce a confidentiality or non-disparagement agreement against someone who went to the SEC.6eCFR. 17 CFR 240.21F-17 – Staff Communications With Individuals Reporting Possible Securities Law Violations
The SEC reads the rule broadly. It applies not just to severance and settlement paperwork but also to internal policies, compliance manuals, codes of conduct, and training materials. Even a clause that permits SEC reporting but requires the employee to notify the company first can run afoul of the rule.7Securities and Exchange Commission. Whistleblower Protections
When These Clauses Do Hold Up
Non-disparagement provisions aren’t dead in California. Several situations still allow enforcement:
- A mutual non-disparagement clause between two businesses of roughly equal bargaining power. Employee and consumer protections don’t reach arm’s-length commercial deals.
- Protection of genuine trade secrets and proprietary information, such as customer lists, financial data, or proprietary processes. California courts draw a clean line between protecting that kind of information and silencing someone about workplace conduct.
- Settlements that resolve claims outside the categories listed in CCP 1001, like a breach of contract claim, a commercial lease dispute, or an intellectual property disagreement.
- Employment agreements that include the required statutory carve-out. An employer who preserves the employee’s right to discuss unlawful conduct can still restrict other disparaging statements.
The pattern is consistent. California objects to restrictions that hide illegal conduct, suppress consumer feedback, or exploit unequal bargaining power. A narrower clause that respects those limits can be enforced.
What Happens If You Breach a Valid Clause
If a clause is enforceable and you violate it, the consequences track ordinary contract law. The other party can sue for damages, which means proving actual harm, such as lost business or measurable reputational injury. Some agreements set a liquidated damages amount, though California courts will look hard at whether that number is a reasonable estimate of anticipated harm or an unenforceable penalty.
The other party might also seek an injunction. Courts are cautious about prior restraints on speech, but if the clause is valid and the statements are causing ongoing harm, an injunction is possible.
Severance money is the pressure point most people run into. If you signed a separation agreement with an enforceable non-disparagement clause and received severance, breaching the clause can put that money at risk, depending on the agreement’s language. Some agreements include clawback provisions requiring repayment on breach. Whether a clawback holds up depends on whether the underlying clause is valid in the first place. If the clause was void from the start because it lacked the carve-out language or reached protected speech, a clawback for violating it fails too.
Using Anti-SLAPP If You Get Sued
If an employer or business does file suit over your statements, California’s anti-SLAPP law, Code of Civil Procedure section 425.16, can end the case quickly. The statute lets a defendant file a special motion to strike any cause of action that arises from protected speech, including statements made in connection with judicial proceedings, government investigations, or public issues.8California Legislative Information. California Code of Civil Procedure 425.16
Once the motion is filed, the plaintiff has to show a probability of winning. If they can’t, the case is dismissed early and the defendant can recover attorney’s fees. Courts have applied the defense in non-disparagement disputes, especially where the statements were made during internal investigations, regulatory complaints, or litigation. This is often where enforcement collapses in practice. Even a technically valid clause becomes expensive to sue on and fast to defend against.