Hi Folks, I’ve missed you all so much since our last blog post on Jan. 6, 2017.

Defamation: A fairly large part of my practice these days includes Plaintiff’s Defamation cases. I enjoy working with clients hurt by the illegal communications of others. Defamation claims are not addressed by the typical practitioner. They also involve complex and intriguing Constitutional issues, as well as different elements of proof depending on the nature and form of the communication.

Also, unlike a personal injury case, the damage can continue and get much worse AFTER an initial consultation with a prospective client. In addition, new potential defendants (i.e., recklessly or maliciously repeating a defamatory communication) and collectible sources of recovery could come into play AFTER the initial consultation. Still further, the immediate time frame following a defamatory communication (i.e., when the community is buzzing) and people are passing along information they probably are mis-repeating or only partially addressing is not the best time to decide to file a lawsuit. Many times, the hullabaloo cools down and people can move on. The news cycle is short, and 95 + % of defamatory communications are made by persons in relationships with the defamed and are likely effectively judgment proof.        

Defamation is dynamic, complex, and confusing enough in its own right.

Which brings me to my point: 

What (in the sam-hell) is DISPARAGEMENT?

And, what in the heck is a sam-hell ?  

• Actually, it is (apparently) supposed to be Sam Hill; or
• Is it supposed to be Samiel per Mencken or Samael?

I digressed. Apologies.

Anyway, the QUESTION POSED IS: 

• why would you, should you, could you agree to a “non-disparagement”
  clause in a civil settlement agreement?

SPOILER: the author does not believe you should, even if you would, or thought you might could.

In fact, when it comes to non-disparagement clauses, we “do not like them anywhere.”

DISCLAIMER: My firm does not handle divorce or custody cases (i.e., Family Court – haven’t been there since 1999 after competing SC ACR Rule 403’s). So, please do not consider the comments here as disparaging to practitioners who have advocated for the use of “non-disparagement” clauses in those types of “domestic” civil settlements. When children are involved and the splitting up parents will be in the same community and / or continuing to jointly raise the children, “non-disparagement” seems like a good idea, and could be a great idea. It could also likely be enforced by the contempt powers of the Family Court, if included in the approved settlement order. Being mindful of the fact that a Family Court Judge‘s job is not (intended to be) to “police” every statement made by the recently divorced. Still further, in such cases, it might also be a good idea to give examples of the types of communications about the former spouse that would be considered “disparaging” of the former spouse under those agreements. E.g., anything that a reasonable person would consider to be damaging to the children or to reflect negatively on the family. However, when you start defining things, “people” (i.e., lawyers and judges) will later argue using Latin terms like expressio unius est exclusio alterius or Contra Proferentum, etc., so talk to a Family Court practitioner so I can get away from this ever growing DISCLAIMER.  

SEALING SETTLEMENTS: Consistent with the above DISCLAIMER, Family Court divorce records are typically more difficult to access and also easier to have sealed by the Court.  South Carolina courts have long stated, “[t]he institution of marriage is so directly concerned with the public welfare that the State is said to be a third party thereto” Strickland v. Anderson, 186 S.C. 482, 196 S.E. 184, 186 (1938). This policy is also reflected in the marital privilege, which protects communications between married persons in South Carolina during the existence of the marriage. In other states, the martial privilege may have extended to cover communications prior to the marriage and after the engagement. Marriage is not just a cultural ceremony. It has legal (and Biblical) significance. Our oldest child is engaged and we could not be more excited BTW.

Back to DISPARAGEMENT / NON-DISPARAGEMENT: In my home state of South Carolina, a LEXIS / NEXIS search for “disparagement” identifies 36 cases. However, there is no common law claim for “disparagement,” only Defamation and / or Slander of Tile or Product Disparagement. The word “disparagement” primarily arises in lawsuits in cases involving claims for Slander of Title.

Which brings me to reason no. 1 (finally) why you should never include a NON-DISPARAGEMENT clause in your civil settlement agreements:

1. You will always have the option to sue for Defamation.

What is DEFAMATION: In 1998, the S.C. Supreme Court set forth the elements of a defamation claim in Holtzscheiter v. Thompson Newspapers, 506 S.E.2d 497, 518, as follows:

(1) a false and defamatory statement concerning [the plaintiff];

(2) an unprivileged publication [by the defendant] to a third party;

(3) fault on the part of the [defendant] publisher; and

(4) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication.

See also Restatement § 558.

Breaking down the above four elements reveals, arguably (see italics, bold and underline above), more than four elements, as follows:

• The STATEMENT:
  • False statement;
  • Defamatory statement;
    • Truth is a defense (and, in which case, it hurts);

• The PUBLICATION:
  • Certain communications are privileged, e.g., suspected crimes;
    • Generally, this privilege only extends to those who need to hear it;
  • To a 3^rd-Party;
    • If a defamation occurs in the woods and no one hears it, is it defamation? NO;

• The FAULT:
  • Repeating “scoop” may not give rise to liability to the repeater, absent malice or recklessness;
    • The nature of the allegation balances out the bad-faith immho;

• The ACTIONABILITY:
  • Generally, this refers to the 4-5 categories of communications recognized as Defamatory Per Se, which are:
    • (false & unprivileged) allegations of criminal conduct;
    • (false & unprivileged) allegations of a loathsome disease (i.e., STD’s);
    • (false & unprivileged) allegations of [incompetence in profession];
    • (false & unprivileged) allegations of unchastity.

“Special Harm,” and a lot of other things included already, are beyond the scope of this blog post.

Which brings me to reason no. 2 why you should never include a NON-DISPARAGEMENT clause in your civil settlement agreements:

• 2. Disparagement almost certainly means something less than Defamation (see “expressio unius est exclusio alterius” above), which you still have (see point 1 above).

If a contractual non-disparagement claim does not require less proof than Defamation (at common law), then YOU DON’T NEED IT, right? [insert duh emoji]  

Which brings US (we are in this together now, if you read this far …) to reason no. 3 why you should never include a NON-DISPARAGEMENT clause in your civil settlement agreements:

• 3. A party with resources can sue you for disparagement and you will almost certainly not be able to get the complaint dismissed on a motion to dismiss.

Even if you could get an early dismissal order, a clever attorney will just re-plead, and then, YOU ARE RIGHT BACK IN ANOTHER LAWSUIT with someone you thought you were getting out of litigation with when you were so glad you “finally settled,” before.  

AND, if you do not have insurance coverage for any of the claims in the new case by the resourced “pistol whipper,” then you are back into a situation you likely could not and still cannot afford and do not want, with no real upside.  

Which brings US (we are bonding now) to reason no. 4 why you should never include a NON-DISPARAGEMENT clause in your civil settlement agreements:

• 4. No one else knows what it means and, for that reason alone (you should be out), it will be misconstrued to preclude discovery and / or to continue to bully YOU long after you settled (thought you settled).

Recently, we have experienced situations where witnesses in depositions cite to, for example, a Non-Disclosure Agreement, as reason for why they cannot provide testimony about a subject at issue in the lawsuit. This is obviously contrary to public policy and (further) dives up the costs and length of the discovery process. Many times, the deponent does not even have a copy of the alleged NDA, and many times, it ends up being an improper “non-disparagement” clause that may also be tied into an improperly sealed civil case. See e.g., Case No. 2019-CP-02-02728 (Aiken County, Common Pleas, South Carolina), available by searching here. Select “Trial Courts” (in the blue banner at top), and then “Case Records Search,” and then click on Aiken County (it is the big one in the middle to the left ‘😉).

Non-disparagement clauses and secret settlements are a tool for the super-rich and for habitual sexual offenders, who use them and their powerful (and expensive) lawyers to cover up their misdeeds, maintain their positions of power, and to continue to victimize their victims. WE can thank the likes Bill Clinton and Jeffrey Epstein for this.

This “playbook” misuse of non-disparagement and non-disclosure clauses has become so prevalent, Congress recently attempted to address it in passing the so-called “Speak Out Act,” which Nexsen Pruet discusses here.  Time will tell if the Speak Out Act has any teeth or practical effect, but for now it is described as intending to “prohibit nondisclosure and non-disparagement clauses agreed to before a dispute involving sexual misconduct arises.”

Unfortunately, but perhaps with some good policy reasons, the Speak Out Act “does not apply to, or otherwise prohibit, nondisclosure and non-disparagement agreements concerning sexual misconduct entered into by an employee after a dispute arises.” (JDSUPRA Id.).

So, let’s end this with some TAKEAWAYS:

• Stick to your common law remedies, e.,g., Defamation, Intentional Interference, etc;
• If you must agree to a non-disparagement clause:
  • get good value for it;
  • Put an end date on it, so you can resume your life FREE from the [antagonist];
• Read your draft settlement agreements very carefully (minimum of three times); and
• Make notes, and ask questions to make sure to avoid surprises.   

The only thing werse than being sued in the first place when you did not want to be in litigation, is .. to get sued a 2^nd time by the same parties.

Thanks for reading this far and please share and call with any questions re: DEFAMATION claims or related issues.