alt Hacker News>The pro-compensation crowd assumes that because severance is taxed as compensation, that it is payment for past work, and therefore any non-disparagement clauses are illegal.
Here are more considerations:
- No person who did no work for the company gets to sign a "non-disparagement" clause, or get a severance.
- The severance amount is very commonly proportional to the length of service.
Insofar as the words "compensation" and work have meaning, severance is very clearly compensation for past work.
Fulfilling a non-disparagement clause is what no sane person would call work, no matter how many Orwellian mental hoops are jumped through to label it as such.
>This is something I have seen just stated as if it was an iron-clad fact, rather than something that the courts don't actually uphold at present.
Insofar as we're discussing the morality of these clauses, it's iron-clad enough.
>That said, what is a more interesting take is whether states should make non-disparagement clauses illegal in the same way that many states have made NDA clauses illegal.
The "pro-compensation" crowd argues that this indeed should happen, not that the clauses are currently universally recognized as illegal (the article we're discussing very clearly shows that it's not the case).
That's fine, but you understand that severance is completely optional. But paying someone for doing work is not optional, there are minimum wage laws. It may be a corporate policy to offer severance, but those policies are often changed and are not part of the employment contract people sign (or very rarely is this the case).
If severance was part of your compensation, it would be part of the contract you sign. Instead, it's something in addition to your contract.
So it's very hard to argue that severance is compensation for past work when the company can choose not to give any severance, or not give to someone who doesn't sign a contract.
Also, you only get severance after you sign the contract about non-disparagement, not before, so it's very much a consideration situation.
Basically the reality is that business offer severance as a type of bribe for people not to sue them or disparage them.
This is why the courts have rejected your line of reasoning.