• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster

3

Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster

3

Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
TechTikTok

TikTok shareholders who make any ‘disparaging statement’ about the company risk having their entire holdings seized 

Alexandra Sternlicht
By
Alexandra Sternlicht
Alexandra Sternlicht
Down Arrow Button Icon
Alexandra Sternlicht
By
Alexandra Sternlicht
Alexandra Sternlicht
Down Arrow Button Icon
March 8, 2024, 5:35 PM ET
Tik Tok CEO Shou Chew.
Tik Tok CEO Shou Chew.Matt McClain/The Washington Post via Getty Images
Add Fortune on Google for similar content.

Current and former TikTok employees who criticize the company risk losing any stock they own—in some cases worth millions of dollars—under a shareholder agreement that bans disparaging the social media service. 

Recommended Video

Like many tech companies, TikTok awards restricted stock units to its employees that vest over time as part of their compensation. The shares incentivize employees to work hard and stay with the company in the hopes of big paydays. (Since TikTok owner ByteDance is not publicly traded, if employees want to cash in their stock shares, they most likely have to sell them back to the company.)

But TikTok is also using the stock compensation as a tool to tamp down dissent. Any current or former employees who own shares risk losing them by speaking out about a wide range of topics.

Five attorneys who practice shareholder law told Fortune that TikTok’s non-disparagement provision is unusual, but not illegal so long as it doesn’t prevent, intimidate, or punish employees for filing complaints with government agencies. For example, workers can’t be blocked from reporting dangerous working conditions or nefarious company practices to the Occupational Safety and Health Administration or the Securities and Exchange Commission.

“We see non-disparagement clauses in a variety of different contracts. It’s a little unusual that you would see it in a shareholder agreement, but it’s not out of the question,” says Joshua Hollingsworth, who is a partner at Barnes & Thornburg and cochairs the firm’s entrepreneurial and emerging companies team. 

TikTok’s shareholder contract, viewed by Fortune, says shareholders cannot “directly or indirectly make any critical, adverse or disparaging statement or comment about the Company or any of the Company’s subsidiaries, affiliates, directors, officers, or employees.” If shareholders are caught doing so, “all of the participant’s restricted share units will be immediately forfeited.” 

TikTok went on to say that shareholders have some leeway to talk to authorities about confidential matters and trade secrets as part of ongoing investigations. But attorneys said it’s unclear whether that exception applies to filing complaints with the government.   

Jason Navarino, a law partner in Riker Danzig’s tax and corporate groups, also questioned TikTok’s vague definition of disparagement by saying that it makes it difficult to know what the boundaries are. Furthermore, the legal landscape about non-disparagement clauses is evolving, he said. For example, last year, the National Labor Relations Board ruled that overly broad non-disparagement clauses are unlawful in severance agreements. 

“The question is, What’s disparagement? There’s a fine line between ‘You’re not going to say anything bad about the company,’ and prohibiting an employee from saying anything about the company,” Navarino said. 

TikTok did not respond to Fortune’s multiple requests for comment about its non-disparagement clause or whether it has ever seized stock from any shareholders. 

Patrick Spaulding Ryan, TikTok’s former lead technical program manager who owns tens of thousands of company shares, is putting TikTok’s non-disparagement clause to the test. On Wednesday, Ryan filed a complaint with California’s Department of Industrial Relations’ Retaliation Unit after TikTok failed to include him in its latest program to buy back shares from current and former employees at set prices. He accused the company, owned by China-based ByteDance, of leaving him out of the offer because he had criticized the disparagement clause in a post on LinkedIn. Being left out is costing him millions of dollars and qualifies as retaliation, he said in his complaint.

In his LinkedIn post, published on Feb. 21, Ryan wrote: “ByteDance’s non-disparagement clause is illegal…Anyone impacted or threatened by ByteDance with this clause should report the violation to the Department of Industrial Relations.”

The law in California, where TikTok and Ryan are based, says that non-disparagement clauses can’t stop employees from speaking out about retaliation, discrimination, harassment, and other unlawful acts at work. 

Ryan and another ex-TikTok worker who owns shares, and who spoke to Fortune anonymously for fear of retribution by TikTok, said the non-disparagement clause wasn’t included in the shareholder agreements they signed. Only after employee shareholders threaten legal action or say they need to see the clause for their recordkeeping does the company reveal what’s in the clause, said the two former TikTok workers.

Ryan, who is now an attorney with his own tech law practice, hopes his complaint will attract the attention of California’s labor commissioner and trigger an investigation into TikTok, where he led parts of its security operations from March 2020 to June 2022. 

This comes amid a rocky week for TikTok with a bipartisan House of Representatives’ Energy and Commerce Committee unanimously supporting a bill that would force ByteDance to sell TikTok within 165 days. Representatives also criticized the company for flooding their phone lines with calls from upset users who believed Congress was calling for a total ban, which House China Select Committee Chair Mike Gallagher (R-Wis.) told reporters is an “outright lie.”

TikTok shareholders received the latest buyback offer on March 4 and have until March 29 to tender their shares for sale. On March 5 and March 8, Ryan contacted the company by email about its failure to send him the offer, and has yet to receive any response.

In October, Ryan had communicated with the TikTok-ByteDance legal team to express his concerns about a related issue involving the company’s willingness to buy shares at a higher price from current employees than former ones. At the time, the company responded that the provision was included in the shareholder terms and conditions, to which Ryan had agreed, and that tendering his shares was voluntary. 

Ryan is among several former TikTok employees who haven’t received the latest share buyback offer. He and the others are among the 300-plus people who communicate their grievances in a group chat for ex-TikTok workers. They say there is a correlation between the people who weren’t invited to sell their shares and those who’ve complained about TikTok. 

Ryan said he is unaware of TikTok seizing shares from any current or former employees for violating the disparagement clause.  

It’s possible that Ryan didn’t receive the latest buyback offer due to a system glitch, administrative error, or a decision by the company that he is ineligible for reasons other than violating the non-disparagement clause. But Ryan is convinced otherwise, and said that if he does eventually receive the invitation after the delay, it will be because the company meant to intimidate and silence him. 

It could take months, even years, for California regulators to resolve Ryan’s complaint. But any ruling may have enormous implications for shareholder law. If regulators say TikTok did nothing wrong, other companies could add broad non-disparagement clauses to their employee shareholder agreements. If it rules in Ryan’s favor, TikTok and other companies may have to strike or revise the non-disparagement clauses, potentially opening the floodgates for employee complaints about protected topics. 

About the Author
Alexandra Sternlicht
By Alexandra Sternlicht
Instagram iconLinkedIn iconTwitter icon
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Tech

paralegal
AIdisruption
The most reassuring argument about AI and jobs quietly explains why Gen Z can’t get one
By Nick LichtenbergJune 29, 2026
3 hours ago
This summer’s heat is a live stress test for data centers—here’s what it’s revealing in real time
AIData centers
This summer’s heat is a live stress test for data centers—here’s what it’s revealing in real time
By Tristan BoveJune 29, 2026
3 hours ago
Photo of Jim Farley
AIAutos
Ford realized AI wasn’t capable of taking human jobs years ago—and hired 350 ‘gray beard’ engineers to steer its program
By Sasha RogelbergJune 29, 2026
3 hours ago
‘Cop on your wrist’—Wearables offer tons of data, but people are still going to sleep to Netflix and TikTok
HealthBrainstorm Tech
‘Cop on your wrist’—Wearables offer tons of data, but people are still going to sleep to Netflix and TikTok
By Amanda GerutJune 29, 2026
4 hours ago
Strategy cofounder Michael Saylor sits during a conference and looks out into the crowd.
CryptoBitcoin
Strategy may sell up to $1.25 billion in Bitcoin to calm investor jitters
By Camila Grigera NaónJune 29, 2026
5 hours ago
Hyperscalers could end up resembling airlines—plagued by small margins, intense competition, and high expenses, AI skeptic warns 
AIData centers
Hyperscalers could end up resembling airlines—plagued by small margins, intense competition, and high expenses, AI skeptic warns 
By Jason MaJune 29, 2026
5 hours ago

Most Popular

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
Success
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
By Sydney LakeJune 25, 2026
5 days ago
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
Success
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
By Preston ForeJune 27, 2026
2 days ago
Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
Success
Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
By Sydney LakeJune 29, 2026
5 hours ago
The retired college professor fighting a $313 trespassing ticket in Wisconsin thinks he's part of a national struggle
Environment
The retired college professor fighting a $313 trespassing ticket in Wisconsin thinks he's part of a national struggle
By Catherina GioinoJune 28, 2026
2 days ago
Cristiano Ronaldo is soccer's first-ever billionaire: He went from begging for burgers outside McDonald's to landing a $400 million contract
Success
Cristiano Ronaldo is soccer's first-ever billionaire: He went from begging for burgers outside McDonald's to landing a $400 million contract
By Preston ForeJune 28, 2026
1 day ago
Ex-Google engineer says Larry Page, Sergey Brin and Sundar Pichai share the same trait—it's the lesson he swears by as a $7.2 billion AI CEO
Success
Ex-Google engineer says Larry Page, Sergey Brin and Sundar Pichai share the same trait—it's the lesson he swears by as a $7.2 billion AI CEO
By Orianna Rosa RoyleJune 28, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.