Say what: non-disparagement clauses and the cost of breach

While most people assume that the dispute is finished after a settlement is signed, the non-disparagement clause does not end there. It stays in the agreement, often without an expiry date, waiting for a social media post, a candid reference, or an industry event that reopens everything.

When that moment arrives, the cost of saying the wrong thing can equal everything the settlement was worth. In personal injury law especially, this is a risk that too many clients discover only after the fact.

What does a non-disparagement clause restrict?

A non-disparagement clause is a contractual term requiring one or both parties to refrain from making negative statements about the other. It applies to:

• spoken comments
• written statements
• online posts in social media

What catches most people off guard is how far a broadly worded non-disparagement provision can reach. Depending on their terms, these clauses can cover:

• comments to a prospective employer about why a job ended or a settled dispute
• posts on LinkedIn, employer review platforms, or consumer rating sites
• statements about named individuals within an organization, not just the organization itself
• criticism of a product or treatment, even without naming the person who provided it

The Quebec Superior Court confirmed that last point in Digital Shape Technologies Inc. v. Walker, 2018 QCCS 4374. A former employee posted negative, anonymous reviews on RateMyEmployer.ca after signing a release that included a non-disparagement undertaking. The court found a breach, and ordered $10,000 in moral damages and $1,000 in exemplary damages, recognizing reputational harm to the employer even in the absence of provable financial loss.

Whether a clause binds one party or both under a mutual non-disparagement clause depends entirely on the drafting. At HR FutureFest in June 2026 in Toronto, David Whitten, a partner at Whitten and Lublin, noted that large organizations agreeing to mutual clauses covering the entire company face a real enforcement challenge: a commitment binding every employee is difficult to monitor and harder still to honour in practice. As such, the wording decides the clause’s scope and whatever it covers.

Non-disparagement clauses are also used in labour and employment law. Watch this video to learn more:

Check out Canadian Lawyer’s Special Report on Canada’s Best Personal Injury Law Firms for a list of the country’s leading personal injury boutiques and firms.

Are non-disparagement clauses enforceable in Canada?

Generally, non-disparagement clauses are enforceable in Canada. A clearly worded non-disparagement clause in a settlement agreement is enforceable across Canadian jurisdictions, provided that:

• its scope is reasonable and
• both parties had access to independent legal advice

The Ontario Court of Appeal confirmed this in Olivieri v. Sherman, 2007 ONCA 491. The non-disparagement terms had been recorded on flip-chart paper during a mediation over multi-million dollar defamation claims. One party later argued the word “disparage” was too vague to be binding. The court rejected that argument, and confirmed that settlement agreements are measured by an objective reading of their written language. What a party privately believed, but never communicated to the other side, cannot alter the agreed terms.

Exception to enforceability

However, there is a narrow exception on the enforceability of a settlement agreement, along with its non-disparagement clause. In the personal injury case of Wannan v. Hutchison, 2020 BCSC 1233, the court declined to enforce a settlement in a claim against a naturopath, citing two findings:

• plaintiff’s counsel inadvertently failed to attach the release to the offer to settle before the client accepted, creating a misapprehension of the terms
• the non-disparagement clause was unusually broad, extending to the type of treatment received, not just to the defendant personally, which would have prevented the plaintiff from warning others about treatment she considered harmful

The court described this as “one of those rare cases” where enforcement would be unjust. It also noted that plaintiff’s counsel flagged the misapprehension within 24 hours, before any further steps had been taken, which was critical to that finding. Outside circumstances like these, a signed agreement reviewed with legal advice will almost always be upheld.

Here’s another video which explains non-disparagement agreements:

Head over to Canadian Lawyer’s Events page for more in-person lawyer conferences and activities to get insights from legal professionals across the country on various topics.

What happens if a non-disparagement agreement is breached?

The answer depends on the drafting, but consequences can extend well beyond a formal warning.

Repayment of settlement funds

In L.C.C. v. M.M., 2023 HRTO 1138, the Human Rights Tribunal of Ontario (HRTO) ordered full repayment of settlement funds after a former employee posted the following on LinkedIn approximately 15 months after signing: “To all those inquiring, I have come to a resolution in my Human Rights Complaint against [the applicant corporation] and [the individual applicant] for sex discrimination.”

Here, the adjudicator found the post breached both the confidentiality clause and the mutual non-disparagement clause. Full repayment was ordered as liquidated damages, plus pre-judgment interest from the date of the applicants’ first written demand. The HRTO also confirmed that proof of actual reputational damage is not required; the harm is understood as the loss of the bargain itself.

Other outcomes for breach of non-disparagement

Consequences for breaches of non-disparagement agreements may also include:

• suspension of future instalments, where settlement funds are structured in staged payments
• a civil damages claim, even where no measurable financial loss can be proved
• in serious cases, the entire agreement being voided

That last outcome was applied in the labour arbitration case of Acadia University v. Acadia University Faculty Association, 2019 CanLII 47957 (ON LA). In this case, the arbitrator ordered complete forfeiture of the settlement payment after a tenured professor posted repeatedly on Twitter claiming “vindication,” even after receiving a direct arbitral direction to stop.

Does the statement have to be false to count as a breach?

No, a statement does not have to be false to count as a breach of a non-disparagement clause.

Disparagement operates at a lower legal threshold than defamation. Defamation requires a statement to be false and damaging. A non-disparagement clause can be breached by a statement that is entirely accurate, if the clause does not specifically limit its reach to false or malicious statements alone. Where the clause is broadly worded, the distinction between truth and fiction becomes legally irrelevant.

In the case of L.C.C., the respondent argued she had not posted anything untrue. However, the adjudicator rejected this defence, stating that while truthfulness is a defence to defamation, it does not address a claim for breach of a non-disparagement clause.

These decisions establish a principle that catches many claimants off guard: a non-disparagement clause applies to accurate statements as readily as false ones, provided the clause does not expressly limit its reach to knowingly false or malicious speech.

For personal injury lawyers, this creates a specific obligation at the negotiating table. A client who received what they believe was negligent or dangerous treatment may feel a genuine duty to warn others. A broadly worded anti-disparagement clause prevents this, even where every word they would say is accurate.

The only reliable protection is a carve-out negotiated before signing, one that preserves the right to report to a professional regulatory body or to comply with a legal proceeding.

Non-disparagement clauses: what you say next is still part of the deal

Some settlements end on paper but continue in practice. A non-disparagement clause can sit in an agreement for years, and a single online post, a candid reference check, or a comment at an industry event can reopen a dispute that everyone believed was finished.

Bookmark Canadian Lawyer’s Personal Injury page for more articles related to Canadian law, such as the breaches of non-disparagement clauses.