Les Moonves & Severance Agreements

Severance agreements arise between employers and employees.  Occasionally, if an employee is terminated, he or she may be offered or entitled to a severance payment.  In return for that payment, the employer will usually negotiate for a release of claims, which generally prohibits the employee from suing the employer.  The severance payment may comprise a week’s pay for every year of employment the employee spent with the employer.  Sometimes, severance agreements are negotiated before employment begins and are contained within employment contracts.  These payouts can include huge sums for some executives.  But does the employer always have to pay the severance amount upon termination? 

The case of Les Moonves provides an interesting glimpse into the world of high-stakes severance litigation.

 The case of Les Moonves

 As many people know, Leslie Moonves ran CBS Corporation for approximately 15 years.  During that time, he was the subject of sexual misconduct allegations, allegations of which the company had been made aware.  In 2007, for instance, it is reported that a member of CBS’s Board of Trustees was informed of a sexual misconduct accusation. 

 As far as the public knows, however, CBS never took any action against Moonves.  He continued in his role of CEO, earned hundreds of millions of dollars in salary and bonuses and was offered multiple contract extensions.  It does not appear that, until more recently, CBS took the allegations against Moonves seriously. 

 Then, in the fall of 2017, the hashtag “MeToo” went viral, spurring silenced women everywhere to expose the sexual misconduct of others, including, in particular, high powered executives.  As the #MeToo exploded, and awareness grew of the epidemic of sexual misconduct, many companies and their executives faced a reckoning. 

 Within a year, 12 women had accused Moonves of sexual harassment or assault.  After CBS conducted an independent investigation, that number had grown to 17 women. 

 What changed between CBS’s first knowledge of Moonves’s alleged misconduct – in 2007 – and its decision (nearly a decade later) to publicly investigate Moonves?  Publicity.  #MeToo had publicized the epidemic of sexual misconduct and began a workplace culture that would no longer tolerate sexual predators.  Once that happened, CBS had a publicity problem on its hands.  Articles abounded with the terms “Les Moonves,” “CBS” and “Sexual Harassment” in the same sentence. 

 CBS was now facing, in addition to the sexual harassment problem it had apparently ignored for years, a bad publicity problem.  Only then did it deliberately and publicly act to remove Moonves from his post.  The timing of Moonves’s termination (after years of knowledge on CBS’s part of the misconduct allegations) leads to the inevitable conclusion that it was the bad publicity, not the sexual misconduct allegations, that began the termination of Les Moonves. 

 The next steps would be crucial for Moonves. According to his employment contract, he was entitled to his severance package if he were terminated without cause.  If he were terminated for any of seven delineated reasons,[1] he would lose that severance entitlement.  Bad publicity is not a listed reason.  If he were terminated for bad publicity, he should be entitled to his severance package.[2]

 Moonves should have taken his severance agreement payout and run (and hid under a rock somewhere).  Instead, he got aggressive.  He allegedly interfered with the investigation by destroying evidence and misleading those tasked to investigate.  He was accused of being “evasive and untruthful” and “to have deliberately lied about and minimized the extent of his sexual misconduct.”[3] 

 By doing this, he made it easy for CBS to deny him his severance because a “willful failure to cooperate fully” with a company investigation and a “willful destruction of or knowing and intentional failure to preserve documents or other material” were specifically included in his contract as “for cause” reasons for termination.[4]  

 Had Moonves cooperated with the investigation (perhaps even negotiating for the results to be kept confidential), he would still have been terminated.  But he would not have been terminated for interfering with an investigation and he could have argued that he was terminated for bad publicity only, thereby entitling him to his severance package.  CBS had known of sexual misconduct allegations against him for years; the corporation only took action once #MeToo made it bad publicity to ignore those allegations. 

 Yet now, Moonves finds himself in arbitration over whether or not he is entitled to his contractually obligated severance.  But he made it easy for CBS – because his interference with the investigation is a clear “for cause” reason to terminate his employment.  As is often the case, the cover-up (at least legally) is worse than the underlying crime. 

 Les Moonves won’t be missed.  At least not by the many women he is accused of harassing (and perhaps many more victims that have not come forward).  But I wonder if he will be missed by the CBS Board who stood by him through horrific allegations until the moment when it became inconvenient.  It would be nice to see CBS donate some (or all) of Moonves’s severance to some sort of charity for victims of abuse, but more than likely CBS will deny any culpability and just throw Moonves under the bus, ignoring the climate and culture that allowed him to survive and thrive at the head of the network while he committed these acts without any consequence, until the moment when it started to make the network look bad.

 

 

[1] Pages 22-23 of his 2017 employment contract list the reasons for which CBS could terminate Moonves “for cause.”

[2] While CBS could argue that bad publicity fell into one of the “for cause” reasons, it would be a difficult argument. 

[3] https://www.nytimes.com/2018/12/04/business/media/les-moonves-cbs-report.html

[4] Page 23 of the 2017 contract.

My former employer accused me of violating my non-compete - what should I do?

OK, so you got a “cease and desist” letter from a lawyer representing your former employer.  The letter threatens to sue you if you don’t turn your entire life upside down.

Oh No - You’ve Been Accused of Violating Your Non-Compete

Relax, your former employer is probably bluffing.  The fact is, non-compete agreements are really hard to enforce.  The trend in the law is against the strict enforcement of non-competes. This is because lawmakers and judges understand that people need to go out and make a living.  And overbroad non-compete agreements prevent people from doing just that. How the heck are you supposed to go out and be a contributing member of society, support your family, pay taxes, etc., if you cannot work?

Just Because You’ve Been Accused of Violating Your Non-Compete Does Not Mean the Non-Compete Is Enforceable

In order to be enforceable, a non-compete must be specific and not overly restrictive.  The broader, and more restrictive the agreement, the less likely it is to be enforced.  In addition, a non-compete agreement must protect the employer’s “legitimate business interests,” like (1) trade secrets or (2) the protection of valuable business relations. Keeping you from working because your former employer is an idiot is not a legitimate business interest.

And, on top of all of that, your non-compete is a contract, so if your former employer hasn’t dotted all of its “i’s” and crossed all of its “t’s”, you could get out on contractual grounds.

In any case, here’s what you should do.  Take a deep breath, dig out your old non-compete, and any employment documents thereafter (especially a severance agreement, if you signed one), and call a lawyer.  We can help you through this.

Call or email any time. We are here to help.

 

I think I'm being discriminated against because of my age - what should I do?

Age discrimination is illegal

Federal and state laws protect employees 40 years and older from being terminated (or suffering certain other adverse actions) because of their age.  The federal law, the Age Discrimination in Employment Act of 1967, states (in part) that it is “unlawful for an employer…to fail to refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age…”  As stated, it is also illegal for an employer to refuse to hire a potential employee because of that person’s age.

I think my employer is about to terminate me because of my age.  What should I do?

 If you feel you are about to be terminated illegally, you should document everything.  Legal cases can take a long time to get through the judicial system and memory fades over time.  While you still can, document evidence of age discrimination. 

 Comments

Evidence of age discrimination can include comments made about older age (including off-handed remarks or jokes).  It can also include comments that indicate a preference for younger employees.  Write down the name of the person who said it, her title, where the comment was said, when the comment was made and the names and contact information of any person who may have witnessed the comment.  Supervisors, managers and owners who make these comments are especially important to remember. 

 Comparable employees

Record the names and contact information of any other employees who may have suffered age discrimination or who may have witnessed age discrimination.  Write down the names and contact information of substantially younger employees who may have been treated more favorably.  Sometimes witnesses want to be helpful and tell their stories; sometimes they don’t want to cooperate and are hard to find, despite having important evidence of age discrimination.  Write down their information now, before you’re trying to find “Cathy something, who sat in the cubicle next to me” two years from now. 

 Written documents

It can be important to preserve documents, such as performance evaluations (particularly those which rate your performance positively), or even performance improvement plans (perhaps those which rate your performance unfairly or held you to higher standards compared to younger employees).  Track down and keep (or make a copy of) any documents that might contain a comment about age; for instance, is there a piece of paper tacked up in the staff room that is joking about an old man?  Take a photo of it; it may have seemed funny at one point but it could be evidence of age discrimination later. 

 Retaliation

Have you told your employer that you think you or a co-worker is being discriminated against because of age?  If so, document that information (for example, when you complained, to whom you complained, what the response to your complaint was).  Has your employer retaliated against you because of your complaint of age discrimination? 

 I think my employer terminated me because of my age.  What should I do?

Much like the steps above, document everything that you can remember right now: write down the comments, look up the contact information for potential witnesses and preserve written documents.  Gather the information you still have or that you can still obtain, such as performance evaluations.  There are allegations in other age discrimination cases that an employer altered an otherwise favorable performance evaluation; sometimes employers ‘can’t seem to find’ those great evaluations after the termination.  Whatever you can do now to preserve evidence of age discrimination, do it.

You should also be careful about signing any documents, such as severance agreements or exit interviews.  Do those documents contain a release of claims?  Are you giving up your right to file an age discrimination complaint?

Bringing an age discrimination claim

The legal process can be tricky.  Where will you file your age discrimination claim?  Can you file with the Equal Employment Opportunity Commission?  Should you?  Are you required to?  We can answer all your questions about age discrimination and the legal process.  Call or email any time; we’re here to help you. 

What is an Employee Arbitration Agreement?

When an employee starts a new job, his employer may ask him to sign multiple documents.  These documents can include an employee contract, a receipt of an employee handbook or even an acknowledgement of corporate policies.  Sometimes, an employer will include an employee arbitration agreement within those documents.  The employee arbitration agreement can be a stand-alone document or it can be buried within a document, such as the employee handbook.  Regardless of how the agreement is presented, if an employee signs that document, he is most likely agreeing to arbitrate most legal disputes.   

What is an employee arbitration agreement? 

Typically, an employee arbitration agreement is an agreement between the employer and the employee to bring any legal claims that may arise between the two parties to arbitration, rather than to court.  An employee arbitration is a legal proceeding; it is conducted by an arbitrator, a private citizen (i.e. not elected or appointed) who is often times a lawyer herself. 

A claim in arbitration proceeds much in the same way as if the claim were in the court system.  The parties can conduct discovery, take depositions and file motions.  The arbitrator decides any disputes between the parties, just as a judge would.  Should the case proceed to trial, that trial takes place in front of the arbitrator, in a neutral location.  The arbitrator’s decision after the trial is final and binding. 

Is employmee arbitration preferable to filing a court case? 

Currently, courts are strongly in favor of parties arbitrating their claims rather than pursuing them through the judicial system.  This is because arbitrations conserve judicial resources, are conducted more quickly and can be less costly to both parties.  The Federal Arbitration Act (9 U.S.C. Sec. 1, et seq.) requires that courts send parties to arbitration if a valid arbitration agreement exists; in other words, a judge cannot choose to keep the case in his courtroom.

Employers also tend to favor arbitrations as the arbitrations are usually a quicker, less costly way to resolve disputes.  The employers may also like to avoid emotional juries/peer-driven juries/the uncertainty of jury awards.  (first two maybe a bit controversially stated?) 

Employees, however, may resent being forced to skip their proverbial ‘day in court.’  They are deprived of their chance to tell their story to a jury, a jury which may be more generous with an employer’s coffers than a professional arbitrator might be.  (Again, controversial?).  More often than not, it is juries (comprised of an employee’s (perhaps more sympathetic) peers) that award large monetary verdicts.  (controversial?)

Are employee arbitration agreements enforceable? 

Because they may want their day in court, many employees try to avoid arbitration.  If they have signed an employee arbitration agreement, can their employer force them to arbitrate?  While the current caselaw does favor compelling employees to arbitrate, a court may strike an agreement if it does not comply with certain legal standards.  For instance, the arbitration agreement must cover the claims at issue (e.g. state that an employee agrees to arbitrate any wrongful termination claim).  Additionally, an agreement must be both procedurally and substantively conscionable (essentially, the bargaining position of both parties must be somewhat equal and the actual terms of the agreement must be reasonable).  If an arbitration agreement does not cover the employee’s claims, and/or if the agreement is substantially unfair, a judge could disregard the arbitration agreement and instead allow the employee to litigate his claims through the court. 

Do you have questions about employee arbitration agreements?  Contact us:  we can help.  Call or email any time. 

Standard Clauses in Physician Agreements - Patient Receipts

Patient Receipt Clauses – What do these look like?

Sample:

(a) You agree that any checks or funds made payable or received by you for professional services rendered on behalf of the Practice during the Term of your employment hereunder shall be the exclusive property of the Practice and shall be promptly paid over or endorsed to the Practice for deposit in its account.

(b) You further agree that the Practice, or its designee, shall have the exclusive right to bill patients for the professional services rendered by you on behalf of the Practice hereunder and to collect all such fees for its own account. You agree to execute such other documents which may be necessary to effectuate the foregoing.

(c) You hereby authorize the Practice to endorse and deposit to its account any checks made payable to you on account of professional services rendered on behalf of the Practice during the Term of this Agreement and grant the Practice a limited power of attorney to effectuate the foregoing.

Patient Receipt Clauses – What do they mean?

These are fairly self-explanatory:  the practice is in charge of the billing and collecting.  Your job is to provide the best medical service you possibly can.  The practice is in charge of all decisions related to billing and collecting.

What this means for you, practically speaking is that you cannot make side-deals with patients.  You treat the patient, and the practice deals with billing.  If the practice wants to give someone a discount, that is their decision, if they want to be totally ruthless about billing and collections, that is their decision too. 

When it comes to money, you get your compensation and the practice deals with the rest.

Patient Receipt Clauses – What should I do?

There is really not much to do.  If you want more ownership of billing, you need to take greater ownership of your practice (which, is becoming increasingly rare in this age of massive, hospital-owned practices).  Of course, if you disagree with your employer’s practices you can always tell them as much and, if appropriate, change jobs (easier said than done, I know).

Want Help with your Physician Employment Agreement?  Contact us – we can help.  Our attorneys have worked with hundreds of physicians from all across the country. Call or e-mail any time.