What do News Anchors, Sports Figures, and Corporate Executives Have in Common? Employment Agreements and Risk-Avoidance Clauses.

Posted by Molly DiBianca On May 4, 2008 In: Executive Compensation , Off-Duty Conduct , Off-Duty Conduct

Risk-Avoidance provisions in employee contracts are more common than you might think. Think of it as insurance on an investment. Employers pay huge sums to retain these "ultimate performers." The employment contract is one way to try to ensure that your precious and irreplaceable commodity (i.e., the all-star employee), doesn't voluntarily put your investment in harm's way.

Waterfall Rafters


The activities subject to risk-avoidance provisions vary greatly. From driving motorcycles to skydiving, the sky's the limit on what types of "dangerous" engagements can be prohibited.

The Human Capitalist has a short post on Why Professional Athletes Have Provisions in their Employee Contracts. We've posted about this topic before in the context of Philly's own ex-newsreporter, Alycia Lane, and the morals clause in her employment agreement that permitted CBS to fire her after being making headlines herself one too many times.

Human Capitalist also posts a great YouTube video demonstrating just why sports figures should have "risk avoidance" provisions in their contracts.

For more on this topic, see our earlier post, Bad Boys, Bad Boys, Whatcha' Gonna Do When They Work for You?, which discusses morals clauses in employment contracts.

Bad Boys, Bad Boys, Whatcha' Gonna Do . . . When They Work for You?

Posted by Molly DiBianca On April 4, 2008 In: Off-Duty Conduct

Our friends at H.R. Hero were nice enough to select one of my articles for HR Line, their national e-zine. The e-zine is great . . . except that you can't see it without a subscription. Don't worry, I'm posting a copy of the original article below.

Bad Boys, Bad Boys: Whatcha’ Gonna’ Do When They Work for You?

Every business has an image. Corporate branding is no small thing. Corporations spend lots of money to market to the right audience and promote their products and services with the perfect image. So what happens when corporate image is overshadowed by a news making employee? Employers are faced with tough choices when the off-time antics of an employee results in bad publicity.

Anchorwoman Turns Anger Woman

In December, popular Philadelphia anchorwoman, Alycia Lane, was arrested in New York City and charged with assault. The charges stemmed from an incident where Lane is accused of hitting a female police officer and calling her a homophobic slur. Lane pleaded not guilty to the charges and maintains her innocence. But her employer, a CBS subsidiary, is not in the mood for apologies, it seems. The station terminated Lane’s six-figure contract on January 7, 2008.

This is not the first time Lane has been featured in the gossip columns for her off-the-air conduct. She even “got real” on Dr. Phil Show, after her first marriage ended to discuss the heartache of divorce. And she made news in August after e-mailing pictures of herself in a bikini to NFL Network anchorman Rich Eisen. The e-mail was intercepted by Eisen’s wife.

Exit Lane: When the Newscaster Becomes the News

Lane’s contract likely included a “morals clause.” These provisions are common employment contracts of TV and radio news personalities, sports figures, and other celebrity types. Even Babe Ruth’s contract contained a good-behavior clause. They are standard issue in endorsement contracts.

But famous faces aren’t the only ones bound by this type of provision. Senior-level executives and corporate officers can expect them as standard. And some provisions include powerful enforcement tools. Executives can lose their deferred stock options if they violate the terms of their agreement.

These provisions provide for discretionary termination of an employee whose behavior conflicts with the company’s corporate image. They vary widely in their definition of “bad behavior.” In some contracts, the clause is not triggered until a criminal conviction. In others, the employer has total discretion to determine what constitutes “bad” behavior and what they want to do about it.

Don’t Judge Me!

So do these provisions hold water in the legal arena? Almost always, the answer is “yes.” Certain states have laws that protect employees from termination or other adverse employment action for activities taken during non-working time.

New York and California have the broadest protections for employees. Employers cannot make decisions based on the employee’s “lifestyle,” which includes just about everything they do off the clock. Some states have “Smokers’ Rights” statutes, which prohibit employers from refusing to hire smokers.

But Delaware has no such laws. So long as your decisions aren’t based on protected status, such as race, religion, gender, and age, you can be the judge of what constitutes “bad behavior” severe enough to warrant termination of an employee. Your company’s image will likely dictate the limits of what is “acceptable” employee conduct.

It’s a pretty safe bet, though, that assaulting a law-enforcement officer probably won’t go over so well with corporate management.

There's No Hiding from Your Own Bad Habits

Posted by Molly DiBianca On March 18, 2008 In: Obesity , Off-Duty Conduct , Smoking

Obesity and Your JobThe topic of off-duty conduct has been unavoidable recently.

First there was the wave of large companies who stopped hiring smokers or charged higher health care premiums to employees. Sure enough, this trend resulted in a lawsuit challenging the legality of making employment decisions based on what candidates and employees do outside of work. The conditional-employee sued Scotts when his conditional job offer was revoked when he tested positive for nicotine. (Scotts doesn't hire smokers).

Next came a wave of talk about GINA, the Genetic Information Nondiscrimination Act, proposed to prohibit employers from basing employment decisions based on genetic information. It would also put limits on the amount of detail employer about an employee's family medical history and other private data.

And don't forget the internet! Employees who post on blogs, in chat rooms, or on social network sites like MySpace and FaceBook have a lot to stay. What are employers to do when their employees (current or former) are giving away trade secrets or other confidential information? And what about the bitter employee with lots of complaining to do and an unlimited audience ready to listen.

What's next? Well, if you ask Governor Spitzer, he might have his own opinionson this topic. His "off-duty conduct" has resulted in his resignation and a great deal of commentary for morning news shows and late night comics alike. Some may argue that the difference between smoking and engaging prostitutes is legality. Smoking, at least for now, is a legal activity. You can pick up a pack of cigarettes at any corner convenience store. Not so with prostitutes. They can be picked up, true, but it is unlawful to do so. Yet, both activities will land you in a similar position--unemployed.

So where should employers draw the line? That's a question for another day. Some critics claim that weight will be the "new tobacco." Will employers, who face rapidly increasing health care costs, next turn to overweight employees and make them an offer they cannot refuse--lose weight or lose your job. Or will the same objective be attempted through higher health care premiums?

And will they charge by the pound?

Barry M. Willoughby, our Section Chair, commented on this issue last week in the Wilmington News Journal.

Off-Duty Conduct in the News

Posted by Molly DiBianca On March 14, 2008 In: Newsworthy , Off-Duty Conduct , Off-Duty Conduct

When should off-duty behavior matter to employers?
On Monday, the Wilmington News Journal published an article about the effect an employee's off-duty conduct can have on his or her employment. Our Section Chair, Barry M. Willoughby, was quoted in the article.

"Lifestyle discrimination" is a rapidly expanding area of the law with staunch advocates on both sides of the fence. "Off-duty conduct," is anything an employee does during his non-working time that is not illegal but not usually "good" for you.

This topic first hit the news when employers began firing and/or refusing to hire smokers. This trend has continued to pick up supporters and is more common than ever. Another ideation of the same idea is to charge smokers a premium for health care. The "carrots and sticks" can vary a great deal and some of the better programs supplement these types of rules with "wellness benefits" where employees are eligible for all sorts of rewards for working towards a healthier lifestyle.

Some opponents of this trend claim that the consideration of non-workplace activity is a violation of employee's privacy rights. Others express concern that the it won't be long before "wellness initiatives" expand to other areas of employees' private lives. For example, many critics worry that weight will be the next area of employer-legislation.

The idea is certainly not unimaginable. If employers want to "encourage" employees to get healthier by quitting smoking, it seems reasonable that they would also want their workers to eliminate the many health risks associated with obesity. On the issue of weight-based regulations in the workplace, Barry had the following to say:

"Weight becomes another issue," said Barry Willoughby, chair of employment section at Young Conaway Stargatt & Taylor in Wilmington. If a person's weight is due to a provable medical condition, the Americans With Disabilities Act may offer protections, but failing that, workers are at the mercy of the company.

"I don't know any employer would actually do that," he said, though complete worker protection for lifestyle choices would be possible only by an act of the General Assembly.

And it is very unlikely that the Delaware General Assembly will pass any broad-sweeping lifestyle anti-discrimination ban any time soon. This is especially unlikely given the State's disposition for pro-business legislation. Unlike California, where employees have a vast variety of rights, Delaware tends to take a more conservative approach to its regulation of the workplace.

Until such laws were passed, though, businesses can continue to consider tobacco use, weight, or even alcohol use, in making employment decisions.