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Employer safeguards in the wake of ‘Loud Quitting’

In the ever-evolving landscape of professional dynamics, a recent trend has emerged where employees have been publicly expressing their dissatisfaction and grievances with their employers after resigning from their jobs, often through social media platforms. This phenomenon has been termed as ‘loud quitting’. This practice marks a stark shift from the previous subtle ways that employees chose to express dissatisfaction about their work environments.

Another phenomenon that has emerged over the years, as a result of employees’ dissatisfaction with their jobs is ‘quiet quitting’. ‘Quiet quitting’ is a situation where an employee is meeting the bare minimum requirements to keep one’s job and is putting no more time or effort into their work than absolutely necessary. Unlike express resignation, in cases of ‘quiet quitting’, the employee has quietly disengaged from their role in the organisation while continuing to retain their job. Despite having distinct manifestations, both ‘quiet quitting’ and ‘loud quitting’ have a significant impact on organisations. While ‘quiet quitting’ primarily impacts internal efficiency and the morale of the workforce, ‘loud quitting’ has a more pronounced impact on the external reputation of an organisation.

Employees resort to ‘loud quitting’ as a public expression of discontent, often driven by a culmination of unaddressed grievances and growing resentment for their employers. The advent of social media platforms has played a significant role in amplifying the voices of such dissatisfied employees, who are no longer confined to water-cooler conversations. Platforms like LinkedIn, Twitter/ X, Instagram and Facebook serve as stages for individuals to share their workplace experiences, grievances and systemic problems within their organisations, often in explicit detail.

It is imperative that employers recognise this phenomenon of ‘loud quitting’, and the impact it can have on their organisation’s reputation. To mitigate this, organisations must foster open channels of communication to address employee concerns promptly and to ensure that employees feel that they are being heard. However, despite an employer’s best intentions and efforts, there could still be employees who are disgruntled. In such cases, employers could counteract the potential negative impact of ‘loud quitting’ by incorporating non-disparagement clauses in the employment contracts executed with their employees. These clauses typically prohibit employees from making or publishing derogatory or disparaging comments about the company (and its officers, shareholders, executives) or taking any action which could adversely affect the reputation of the company, both during and after the tenure of their employment. The aim is to protect the company’s reputation and maintain a positive public image. The ambit of the clause must be wide enough to cover affiliate and group companies and cover statements in any form (including verbal, informal, etc.) or on any media. It is also becoming common to include non-disparagement clauses in severance agreements and mutual separation agreements between employers and employees. While it may be argued that by indulging in ‘loud quitting’, relevant employees are clearly willing to accept the consequences of their actions, having robust non-disparagement terms may still serve as a deterrent, especially to employees who are unwilling to fight legal battles with their former employers for breach of contract.

In India, there is no specific law relating to non-disparagement clauses and the same is regulated by the Indian Contract Act, 1872, and the terms of employment. The legal landscape surrounding non-disparagement clauses is still evolving in India. There has not been any substantial jurisprudence that has struck down or upheld non-disparagement clauses. It is also important to note that unlike a post-employment non-compete obligation, a post-employment non-disparagement obligation is per se valid and enforceable.  

The enforceability of these clauses would depend on factors such as specific wording, reasonableness, and compliance with existing laws and legal principles. While non-disparagement clauses aim to protect the reputation and goodwill of the employer, their implementation could raise questions about the balance between an employer’s contractual rights and an employee’s right to free speech.Article 19(1)(a) of the Constitution of India guarantees fundamental right to freedom of speech and expression, which is subject to reasonable restrictions under Article 19(2), including defamation, incitement to an offense, or contempt of court. In the Indian legal landscape, enforcing non-disparagement clauses could encounter challenges when viewed through the lens of constitutional rights. Courts may scrutinise these clauses to ensure that they do not stifle truthful and legitimate criticism, whistleblowing or complaints about offences perpetuated by organisations.

It is also important to note that various regulations in India, including the Companies Act, 2013, attempt to boost transparency, provide for vigil mechanisms and encourage best corporate governance practices, which could also clash with the enforceability of non-disparagement clauses. It is essential to draft non-disparagement clauses in a way that the employee is not restricted in any manner from making disclosures or statements required to be made under legal or regulatory requirements and related proceedings. Further, the clause should also not be construed as restricting the employee from revealing misconduct, malpractices, truthful information, or information beneficial to the public.

In addition to non-disparagement clauses, many organisations have also started adopting social media policies that regulate what their employees can and cannot share about the organisation on social media platforms, on the basis that information pertaining to the organisation is confidential and/ or proprietary. This is also a useful way to regulate employees, especially those on notice period, who could indulge in loud quitting.

In addition to protections like non-disparagement clauses and having a social media policy, employers should undertake efforts to address underlying workplace issues that drive employees to resort to practices like ‘loud quitting’. Transparent dialogue can mitigate the likelihood of disgruntled employees resorting to public platforms. Implementing anonymous feedback mechanisms can be one way of doing this, which can provide employees with a confidential outlet to express their concerns internally. Conducting comprehensive exit interviews to understand departing employees’ reasons for leaving can also help to make them feel heard, hence reducing the likelihood of them resorting to publicly expressing their dissatisfaction. Further, the feedback received can also be used to make improvements and address any recurring issues. Companies can also have robust grievance resolution mechanisms in place to address workplace issues promptly and impartially, demonstrating a commitment to resolving concerns internally before they escalate.

Lastly, employers should attempt to cultivate a positive work environment that values employee well-being, inclusivity and professional development. They should actively engage with employees through regular check-ins, team-building activities and recognition programmes. This can help foster an environment that not only prevents the escalation of internal issues, but also minimises the risk of employees resorting to practices such as ‘loud quitting’ and public criticism.