Non Disparagement Settlement Agreement Template for New Zealand

A Non Disparagement Settlement Agreement is a legally binding contract that prevents parties from making negative public statements about each other following a dispute or relationship termination. In New Zealand, these agreements are essential tools for protecting business reputations and ensuring professional relationships end on mutually respectful terms while complying with local employment and commercial law requirements.

When do you need this document?

You need this agreement when terminating employment relationships where both parties want to protect their reputations, particularly in senior executive departures or contentious dismissals. It's crucial during business partnership dissolutions where ongoing commercial relationships with clients or suppliers could be affected by negative statements. The document is also essential when settling commercial disputes between companies that operate in the same industry or market, and when independent contractors or professional service providers end client relationships following disagreements. Additionally, you should use this agreement when shareholders exit companies under difficult circumstances or when trustees step down from positions following conflicts.

Key legal considerations

The scope of non-disparagement obligations must be clearly defined to avoid uncertainty about prohibited conduct, including specific examples of statements that would breach the agreement. You must ensure the agreement includes mutual obligations so both parties are equally bound by the restrictions, creating fair and balanced protection. Consideration provisions are critical for enforceability, typically involving settlement payments, reference agreements, or other valuable exchanges between parties. The agreement should specify enforcement mechanisms including dispute resolution procedures, monetary penalties for breach, and potential injunctive relief options. Duration clauses must be reasonable and clearly stated, as perpetual restrictions may be unenforceable under New Zealand law.

Legal requirements in New Zealand

Under the Employment Relations Act 2000, non-disparagement clauses in employment settlements must not restrict an employee's right to raise personal grievances or participate in employment relation processes. The Privacy Act 2020 governs how personal information can be shared or restricted, ensuring confidentiality provisions comply with privacy protection requirements. The Contract and Commercial Law Act 2017 requires proper contract formation elements including clear offer, acceptance, and consideration to ensure enforceability. Defamation Act 1992 principles must be considered when drafting non-disparagement clauses to ensure they don't create unreasonable restrictions on legitimate free speech rights. The agreement must also comply with the Human Rights Act 1993 to ensure it doesn't restrict legitimate whistleblowing or reporting of unlawful conduct to appropriate authorities.