There’s a lot a CEO can do and still get an out-of-court settlement and a $120 million check—like, say, allegedly harass or assault 12 women. But Les Moonves has found something that just won’t fly: misleading corporate lawyers.
Today the New York Times reported that Moonves destroyed evidence of his sexual misconduct and misled attorneys hired by CBS to investigate his behavior. The paper uncovered a draft report from the lawyers saying that, because of Moonves’ apparent dishonesty, CBS “would have multiple bases upon which to conclude that the company was entitled to terminate Moonves for cause”—and strip him of his massive severance package.
You might wonder why multiple allegations of sexual misconduct didn’t already count as “cause” to fire Moonves. In fact, Moonves’ contract with CBS specifically lists sexual harassment as a justification for termination for cause. But employment lawyer Alex Granovsky tells Quartz companies would often rather pay a severance package than try to prove sexual misconduct allegations in court.
“It’s easier,” Granovsky says, “and the company isn’t handing away money. They’re getting a lot in return: a legally binding promise from the employee not to sue, confidentiality, a non-disparagement agreement.”
Instead, Moonves is more likely to lose that $120 million over another cause for termination listed in his contract: “willful failure to cooperate fully with a bona fide company investigation.”
“Even if they can’t prove the underlying allegations, they probably can definitively prove that he’s being materially dishonest and just lying to investigators,” Granovsky says.
Most US workers don’t have as much leverage as Moonves when they’re getting fired. If an employee’s contract doesn’t specify severance terms and they get accused of sexual harassment, Granovsky says, “their employer can fire them for good reason, bad reason, no reason at all—it doesn’t even have to be true.”
Granovsky says high wage earners and “99.9%” of c-suite executives have contracts like Moonves’ that stipulate the conditions under which they can be fired with cause. But the list of causes included in these contracts is growing in the #MeToo era, according to business and entertainment attorney Shaliz Sadig. As contracts come up for renegotiation, she says, employers are including a wider range of possible causes for termination.
“More language is being added to address harassment, sexual misconduct, inappropriate behavior with colleagues,” Sadig says. “Language that used to be looked over is now being scrutinized and broadened.”
The new contract clauses won’t make sexual misconduct claims any easier to prove. But Sadig says they should act as a deterrent—that if executives know sexual misconduct won’t be tolerated, maybe they’ll think twice before participating in it. “Knowing from day one that this will not be tolerated and having it explicitly written in a contract should put everyone on notice, even if they may not have thought about it before.” Sadig says. “You can’t use that excuse anymore. It’s not assumed to be okay.”