Gag Clause

What is Gag Clause ?

  
‘Gag Clause’ refers to any contract based stipend that restricts an employee from disclosing sensitive information about the company, or its operations.
 
Gag clauses are similar to whistleblowing policies since they both fulfil the same purpose of restricting the employees from sharing sensitive information about the company with anyone.
 
However, it is different from a Non-Disclosure Agreement. An NDA would stop the employee from sharing sensitive information with others. However, a gag clause will also restrict an employee from sharing the company’s wrongdoings also with others.
 
Gag clauses are meant to safeguard the public reputation of a company. It is included in the contract agreements as the company would not want others to know about any malpractices that might be happening within the company.

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