#MeToo Affecting Employment Agreements

Companies have begun changing their employment agreements with top executives in light of the #MeToo movement. They are being explicit about sexual harassment, and what constitutes “cause” for termination. Cause can void severance pay and accelerated stock vesting agreements. The changes are there partially to provide an incentive for executives to avoid any hint of sexual misconduct. The issue seems to have gotten the attention of several companies after a New York Times story told of a $90 million payment from Google to Android mobile software creator Andy Rubin after he left following an allegation of sexual misconduct. Employment lawyers say that companies are becoming more focused on broadening the cause provisions, which traditionally were only triggered by extraordinary circumstances, such as actual conviction for a crime. When employment contracts are negotiated, some companies are asking potential hires to “affirmatively represent” that they have not been the subject of a sexual harassment claim, guilty of prior claims or even that they’d never engaged in harassment or misconduct.