§ 8-1-222 — Validity and Enforceability of Non-disparagement Obligations

(a) Non-disparagement obligations in covered contracts, whether unilateral, bilateral, or multilateral, shall be valid and enforceable for any period of time agreed to by the parties.
(b) Except as otherwise prohibited by law, any covered contract between two or more persons or parties obligating one or more parties to the covered contract not to disparage one or more other parties to the covered contract is only enforceable by a civil action where all of the following elements are present:
(1) The covered contract contains language prohibiting one or more of the parties from disparaging one or more of the other parties, and may include specifically named individuals who are affiliated with, are employed by, or are owners of one or more of the parties.
(2) A disparaging statement is made by the person or party who is obligated not to make such statements.
(3) Either of the following occur:
a. The communication of the disparaging statement proximately results in identifiable damage to the plaintiff.
b. The terms of the covered contract automatically activate a liquidated damages provision, as defined in Section 8-1-221.
(c) Nothing in this article creates any cause of action for disparagement at law or equity absent a written non-disparagement obligation in the covered contract between the parties.
(d) Nothing in this article has any effect on any other term, condition, or covenant in a covered contract that is not specifically stated in this article.
(e) Nothing in this article prevents parties from having bilateral, unilateral, or multilateral non-disparagement obligations in other contracts, including, but not limited to, nondisclosure agreements.

Legislative History

(Act 2021-503, §3.)