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Should you include a morals clause in your employment contracts?

On Behalf of | Mar 26, 2024 | Employment Litigation |

Whether you’re starting a business or simply reviewing and amending your employee contracts, you may want to consider adding a “morals clause.” They were once largely reserved for actors and athletes whose public words and behavior could have a significant financial impact on their employers. Today, with the power and reach of social media, just about anyone at any level in any industry can have the same effect. 

You’ve likely seen videos on social media of people captured on cell phones behaving badly – engaging in a racist, homophobic or other discriminatory tirade, bullying or even in a racist rally. Probably one of the most famous of these to go viral and be seen around the world involved a woman in Central Park calling the police on a Black man who had asked her to put a leash on her dog. The man captured it all on his phone. It didn’t take long for her – and the investment business she worked for – to be identified. After considerable public pressure, the employer fired her. She sued her former employer – and lost. 

It’s not known whether she had any kind of morals clause in her employment agreement. What is certain is that by including a provision in these agreements, employers make it easier to quickly terminate employees whose non-work-related behavior causes reputational – and financial – harm. 

What to include in (and leave out of) a morals clause 

It’s crucial for these clauses to be clear. It can be a delicate balance not to make them too vague or too specific. You also need to balance your employees’ right to free speech with the fact that this speech could be seen as a reflection of what the business stands for. You want to be clear that if an employee engages in any behavior that is harmful to the public’s perception of your business – and therefore to its bottom line – they may be terminated. 

This can be a tricky element of employment law, since businesses are still working to catch up with the vast power of social media. If you have any questions or concerns about morals clauses, it’s smart to get experienced legal guidance. 


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