Deed of Release (DOR) is a written statement that once signed becomes a legally binding document. By signing a deed of release, an employee agrees to ‘release’ their employer from current or future legal claims and an employer agrees to perform a certain act or pay certain entitlements that will benefit the employee. DOR written by an employer will generally contain various terms that will offer them significant protection from their former employees Therefore, the content of a DOR can also contain clauses relating to confidentiality of information, non-disparagement and other post-employment obligations. However, a DOR cannot protect an employer from public policy or unlawful activity.
Can an employer make disparaging comments about a former employee?
It is not illegal for an employer to give out truthful information or opinions about your work. You should not assume that your ex-employer is prohibited by law from giving your potential future employers more than just a standard confirmation that you used to work in their company. However, if a former employer is making false statements that damage your reputation and reduces your chances of getting a new job, you may have a legal claim for defamation. These statements can be spoken (referred to as slander) or written (referred to as libel), informal or formal. However, a DOR will often contain extensive restrictions on the legal action you can take against your former employer. It could be that by signing the DOR, you gave up all your legal rights to bring a current or future legal claims against your former employer in regards to any unconscionable conduct.
In some cases, a DOR may contain a non-disparagement clause, in order for such a clause to work in your favour, the language of the non-disparagement clause needs to state that “both parties agree that they will not disparage one another or make any statement or publication that may harm the reputation of the other”. The content of a DOR will vary depending on the timing and the certain circumstances which lead to the termination of your employment contract. Therefore, it is important to have a careful read of the DOR statement to determine if such a non-disparagement clause exists and whether it works to prohibit disparaging comments being made by ‘both the employer and employee’ or just ‘the employee’, given that a disgruntled employer is likely to exclude themselves from a non-disparagement clause.
What legal recourse is available?
If there is a favourable non-disparagement clause and your former employer has made disparaging comments following your departure, you should seek legal advice as to how you may be able to bring a claim against your former employer for the breach of the non-disparagement clause.
If your former employer is not caught under a breach of a non-disparagement clause, it is best that you consult a lawyer to review the content of the DOR that you have signed and check if there are any loopholes in the DOR statement that may allow you to bring defamation claim against your former employer.
If the deed is well-written and contains broad terms, you are only left with the option of challenging the validity of the DOR. Importantly, you should have been given the opportunity to seek legal advice about the contents of the DOR and understand the consequences of entering into the deed.
You may be able to set aside the DOR, if you are able to prove that you signed the deed under duress, for example, you had to sign the DOR to receive certain entitlements upon termination or you entered into the DOR under a misrepresentation from another party (such as a union representative).
If you feel that you were pressured (either financially or emotionally) to sign the DOR, do not hesitate to speak to our lawyers about your rights.