Morals Clauses – What’s New?

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Morals Clauses – What’s New?

 

Morals clauses are typically called upon to allow employers to disassociate with talent or high-profile employees who exhibit bad behavior.  The rapid growth of the #MeToo movement and a newfound zero tolerance attitude in entertainment and business has caused morals clauses to become more broad in scope, and for terminations under them to be more swift and publicized.

If you’re entering into a new agreement it’s important to carefully review and negotiate overly broad morals clauses so that you aren’t faced with termination for something seemingly innocent.  Keep in mind that a violation of a morals clause is often grounds for termination “for cause,” which may come with severe ramifications depending on your employment agreement.

But what is a morals clause, and what does it mean for employees?

A morals clause is a provision that allows an employer to terminate an employee if they engage in what the employer terms to be misconduct, or if the employee does something that could reflect poorly on the employer.  Lately, these provisions have extended to conduct that could potentially put the employer in a bad light, and have included incidents that occurred before the employee was hired within that scope.

From the employer’s perspective, a morals clause serves as a way to protect their investment in an employee by (1) deterring them from engaging in bad behavior, and (2) allowing for a quick separation in order to protect the employer’s brand in the eyes of the public should something occur or come to light.

While you’re not likely to convince a company to remove it entirely, there are ways to trim down a morals clause so that it doesn’t result in an unfair or easy out for employers:

  1. Narrow the scope and get clarity: When faced with a broad provision, employees should negotiate for more specific language so it’s clear what behavior may trigger the employer’s right to terminate.  It’s also important for employees to understand how the morals clause will function.  For instance, what kind of misconduct is considered immoral by the employer?  Could a controversial stance on a hot button issue, or a small incident from your past, result in a high profile termination?  Ask these questions and attempt to narrow the scope of what’s included.
  2. Require proof: Generally, both parties stand to lose a great deal (financially and otherwise) should an employee be terminated for a morals clause breach. Employees should request that the right to terminate only be triggered by conduct with factual support, and should push to exclude instances of unsupported claims, false arrests, and wrongful accusations.
  3. Push for neutral third party review: An employer will most likely grant itself the exclusive right to determine whether an employee’s conduct violates the morality clause and triggers termination, putting the employee at a significant disadvantage. Having a neutral third party review the facts, whether through arbitration or otherwise, will allow the employee an objective and fair resolution.

Morals clauses are here to stay, and will likely become more and more robust in favor of the employer as more incidents come to the forefront of the public eye.  It’s important to become knowledgeable about when they come into play and to level the playing field, but understand that if you trigger one, you may already be in deep.

Leah Norod

Associate Attorney

(212) 865-9848

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This Blog is made available by Romano Law PLLC for general informational and educational purposes only, not to provide specific legal advice. By using this Blog you understand that there is no attorney client relationship between you and Romano Law PLLC or any individual contributor. You should consult a licensed professional attorney for individual advice regarding your own situation.

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