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Is my Severance Package Agreement Violating the First Amendment?

Q. My grandson lost his job and was offered a severance package which he needs to pay off his college loans. However, the company made him sign a legal document that said he will never speak negatively about the company, its services or its leadership. He had to sign this since he needs the severance check, but does this not go against his first amendment right to freedom of speech? Can he not tell friends and prospective employers the real reason he lost his job...company doing poorly, losing money due to poor leadership? Does this agreement he signed hold up in court if the company finds out he is telling the truth to a potential employer?

A. The career paths of employees your grandson's age will be littered with job changes and layoffs. Learning how to react to these upsets and understanding the legal and professional ramifications of company actions, and his own, will be important to his continued professional livelihood.

Severance is not an entitlement for employees. It is a financial agreement between the employee and employer. Your grandson was given a financial settlement for signing a release which commits him to not disparage his former company or its executives. This is not intended to stifle his rights to free speech, but to make the separation as amicable as possible; to protect the financial interest of the employee and protect the employment brand of the employer.

I consulted with Valerie Samuels, Partner at Posternak, Blankstein & Lund LLP and co-chair of the Employment Law Group. According to Samuels, “Unfortunately, the agreement your grandson signed is valid and he should comply with the terms of the agreement he signed, which may permit him to say certain truthful things about former employer. As usual, the devil is in the details and I would need to see the exact wording of the agreement to determine what he can say or not.”

“The First Amendment, which is set forth in the Bill of Rights, does not apply to this situation because it protects employees from government infringement, not private complaints by an individual about his employer. An employee who believes his employer is violating the law, by, for example, failing to pay wages or committing fraud, likely has protections under a variety of statutes, but there are procedures in place to address these concerns and an employee should not defame individual managers or co-workers.”

“Defamatory speech (including libel and slander) is not protected under the First Amendment. The situation is different for government employees. If an employee works for a government, speech concerning his employer is protected, because the First Amendment deals with the relationship of citizens to our government.”

As frustrated as your grandson may be at his situation, he will hurt himself more than his former employer by sharing the details of why he was let go with a prospective employer. Employers don’t want to hear conjecture about what is wrong with his last company, they want to know what contributions he can make to them and why he would make a terrific addition to their team.

Your grandson will move on from this experience and it will make him a smarter, more marketable employee in the future.

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