Can you put a “morals clause” in your employment agreements?

On Behalf of | Nov 20, 2022 | Business Law |

If you’re starting a new company, you try to hire people of good character at all levels. However, we can’t really know who someone is, what kinds of beliefs they harbor, what they’re capable of in their worst moments – and who will be around with a phone to capture those moments.

In recent years, we’ve seen people’s racist and other bad behavior go viral and spread like wildfire across the internet. We’ve seen countless videos of people berating and assaulting flight attendants and store and restaurant employees for simply asking them to follow the rules. 

Worse, we’ve seen people bullying their neighbors or strangers with racial slurs and even engaging in rallies chanting their racist beliefs. Sometimes their activities aren’t just reprehensible but illegal.

Identification of people’s employers is becoming easier

It doesn’t take long for people to be identified – and for their employer to be identified and pressured to fire them or risk a massive boycott. That’s assuming they didn’t make things easy by wearing a baseball cap or jacket with their employer’s logo (as some do).

As an employer, do you have a right to ask your executives and employees down the chain of command to agree to a “morals clause,” or are these only for entertainers and athletes who can do serious brand damage with their words and actions?

What should a morals clause include?

You typically do have the right to include such a clause in contracts and other employment agreements. You need to state what kinds of behavior are considered a violation of the clause. You may be able to make it as simple as anything that causes harm to the company’s reputation and can lead to financial harm. 

You also need to specify the possible consequences (for example, up to and including immediate termination with no severance package or even bonuses that may be due). Some employees who may bring special skills or other value to a company may be able to negotiate the terms of these clauses. However, it’s crucial to be consistent about enforcing your morals clauses or you could find yourself being sued by someone terminated under it.

You want to ensure that your morals clause will accomplish what you intend and save you from financial and reputational harm rather than provoke litigation from the employee. That’s why it’s wise to have experienced legal guidance in crafting and enforcing it.



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