When settling claims, many individuals and entities prefer to include "nondisparagement" provisions in the settlement agreement. Each party agrees not to speak ill of the other, and if one does, there are often consequences, such as a forfeiture or payback of settlement funds. In a 2-1 decision, the U.S. 4th Circuit Court of Appeals (whose rulings apply to all South Carolina employers) recently decided a case addressing this specific issue. Read on to see what the court decided.

911 call goes wrong
Ashley Overbey sued three officers of the Baltimore Police Department (BPD), alleging they had beaten, tased, verbally abused, and needlessly arrested her in her own home after she called 911 to report a burglary. She filed various claims against the officers under both state and federal law. Her case ground through the system for about two years, during which she and her children became homeless—partly because her arrest record made it difficult for her to find work.

Eventually, following her attorney's advice, Overbey agreed to settle her suit for $63,000. The parties to the settlement agreement included both the officers named in her complaint and the city itself. The city was a party to the agreement because, under Maryland law, it represents the BPD's interests in settling claims against department officers.

Overbey's settlement agreement included a nondisparagement clause, which required her to limit her public comments about the lawsuit to the fact that a satisfactory settlement had occurred. It prohibited her from discussing with the news media any opinions, facts, or allegations in any way connected to her case, her underlying allegations, or the settlement process. And it provided that if she were ever to make a prohibited comment about the lawsuit, the city would be entitled to a refund of half her settlement. The clause placed no restriction on the city's freedom to speak about the case.

Download the full article, "Open for Business: First Amendment Claims in the Public Sector" written by Richard Morgan.