Energy Conference: Decarbonization - A Business Perspective REGISTER

The #MeToo movement continues to impact the way business is done in the United States. The latest, according to Bloomberg, is what’s being dubbed the “Weinstein Clause.”

Merger and acquisition agreements are now coming with guarantees that the leaders of top companies have not been accused of sexual harassment or misconduct, and that they have not entered into out-of-court settlements for misbehaving. The Weinstein Clause refers to allegations of sexual misconduct by the co-founder of the Miramax film company, Harvey Weinstein.

“The (clause) is a concrete example of how business is trying to adapt to the #MeToo era, at least in terms of legal liability,” reporter Nabila Ahmed states.  “The move is particularly noteworthy given its source: the male-dominated world of M&A advisory where the terms of an offer can make or break a bid.”

Buyers have sought the right to claw back some of the money they paid if subsequent revelations of inappropriate behavior damage the business. In some deals, sellers have even put money in escrow that buyers can claim if any social issues arise.

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Related: Should Sexual Harassment be Part of Your Background Search on Job Candidates?