It seems like almost everyone these days has a social media presence. Even if someone isn’t on any popular social media sites, they can find themselves “going viral” if someone catches them behaving badly in public or private and posts it online.
Some people’s bad behavior has cost them their jobs when Internet sleuths discovered their identity and pressured their employers to either fire them or face boycotts. When a person who posts something controversial on social media or is caught saying or doing something that portrays them as intolerant or discriminatory is a key figure in a company, it can potentially reflect even more on their business or organization than it does on the individual in question.
This is one of the reasons why more businesses are incorporating “morals clauses” in their partnership and other employment contracts. Generally, they’re used for executives and those with high-profile positions. However, just about any employee can be held to a morals clause as long as it’s fair. These clauses can make it easier for businesses to quickly discipline or terminate an employee who has said or done something so egregious that it threatens to cause significant financial and/or reputational harm.
Making a morals clause fair and enforceable
To be enforceable, a morals clause must balance an employee’s right to speak and act in whatever way they choose (as long as it’s legal) with a business’s right to protect itself. That means the clause needs to be clear about what kinds of speech and actions (both legal and illegal) can trigger the clause so that partners, executives or anyone else bound by it knows the parameters. However, it shouldn’t be so specific that it potentially leaves some damaging actions out.
The clause should also spell out what actions a business has the right to take. For example, can they terminate someone immediately with no severance payout? Can they withhold or even “claw back” bonuses? The potential consequences typically need to be specific.
A key element in enforcing a morals clause is whether particular conduct caused or will reasonably cause financial harm to a business (or even a non-profit organization). However, sometimes even serious reputational harm can be grounds for invoking a morals clause.
It’s a complicated balancing act. That’s one reason why it’s critical to have experienced legal guidance when crafting or enforcing a morals clause.
