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Employment Law/Clause in retirement agreement


Hello and thanks for taking my question.

I hope this is in your area of expertise.  I work for a government owned utility and am considering retirement.  We have a self funded plan, and since the recession started the personnel department has offered a small additional amount in your final paycheck if you agree to retire before a certain date.  Since we are a government you can't call this a "golden parachute" and the money is really not that substantial.  In my case for example it only amounts to about 10% of my annual salary.

However, the company asks you to sign a document when receiving the extra pay.  One of the clauses in the document is not sitting well with me --

6) No Disparagement. Employee agrees to refrain from any publication, oral, written or by implication, of a defamatory, disparaging or otherwise derogatory matter pertaining to Releasees or to Employee’s employment relationship with Releasees. This prohibition is specifically meant to be broader than defamation and includes contacting employees, customers, clients, vendors, or reporters and saying or implying anything negative about Releasees by words, actions, context or any combination of these.

Can this possibly be legal?  To a layperson like myself, it appears they are saying that I can never say a bad word about my previous employer for fear of breaking this agreement.  Seems to me like free speech is being compromised here.  If possible I would like your reflection on this.

Once again thank you for your time.

I am an HR Director and not an an ottorney. That being said I will answer the question to the best of my knowledge.

You cannot be asked to sign such an agreement for a legitimate wage amount for which you have worked and earned.

This is an extra amount the company is paying above and beyond other amounts for early retirement. This is very common when extra amounts are being given that are not considered worked for wages.

Yes it is legal and the reason why is because you have the choice to either accept the extra money on their terms or turn it down if you do not wish to abide by their terms. Since the money is not something that they are mandated to pay it is your choice whether to accept it wiht the terms.

That being said, really how much effort do you think they will put forth to file a court claim against someone saying something bad about them a year or two down the road? Really I wouldn't worry about it unless you are just going to go out and trash them.

As HR I can tell you in real life it is not good to bad mouth a former company, it always makes you look like a disgruntled employee and almost no one pays attention to what you say. It could hurt you if you ever needed to find another job. I tend to shy away from candidates that are bad mouthing a former employee when I am hiring because if they are badmouthing them, they might quit and badmouth me.

Just better to be a bigger person and say something like no job is perfect and it had its good points and bad points like any other job and leave it at that.


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Shirley McAllister, CPP, PHR


I can answer questions about payroll laws and payroll tax laws and Human Resource laws and agencies. I can answer federal payroll and human resource law questions and most states; I do not have a knowledge of the local taxes for cities and counties within the state. If and when I can I will try and send you the website where you can reference the answer and where you can obtain more information as well as a contact number if needed for that particular agency. Some agencies I have worked with are IRS, Department of Labor (federal and state), Revenue Canada (and provincial governments), Inland Revenue, OSHA (0ccupational Safety and Health Administration); Social Security Administration and National Child Support as well as other agencies in Payroll and Human Resources. Some Laws I am particularly familiar with are FLSA (Fair Labor Standards Act), ADA (Americans With Disabilities Act), FMLA (Family Medical Leave Act) COBRA (Consolidated Omnibus Reconciliation Act ) , QDRO's, QMCSO's, and other support orders and garnishments, USERRA (Uniformed Services Employment and Remployment Rights Act,PPA Act (Pension Protection Act of 2006, As well as most other employment type acts. I am also well versed in the Title V Civil Rights Act and the HIPAA (Health Insurance Portability and Accountability Act).


30 years in Payroll and Human Resources

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