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Saturday, September 12, 2026

DC Court Allows Claims Based on CEO's Comments on Employee ... - Pillsbury Winthrop Shaw Pittman

Alert

A recent DC Circuit decision contains cautionary lessons for drafting severance agreements and opens the door to personal liability for negative characterizations of the reasons for employee departures.

Takeaways

A mutual non-disparagement clause “directing” officers, directors, and employees to not disparage former employees may be treated by courts as an ongoing promise by an employer not to make disparaging remarks.

An employer may also violate Section 1981’s prohibition against race discrimination where breach of a severance agreement appears discriminatory.

Discussing reasons for employment actions with those outside of an organization may not be protected by the common interest privilege.

On May 23, 2023, the U.S. Court of Appeals for the District of Columbia issued a decision in the matter Wright v. Eugene & Agnes E. Meyer Foundation, et al., No. 22-7004 (May 23, 2023, D.C.Cir.) reversing a district court’s dismissal of a former employee’s breach of contract, 42 U.S.C. § 1981 (“Section 1981”), and defamation claims, in relation to an employer’s alleged violation of a severance agreement’s mutual non-disparagement clause. The Wright decision serves as a reminder that employers must carefully craft the scope of non-disparagement clauses and ensure that post-separation statements by officers and employees regarding any former employee are neutral and circumscribed. Executives and board members who try to explain away rumors or criticisms by making...



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