Sounds … familiar. Harvey Weinstein’s contract with the Weinstein Company reportedly prevented the company from firing him over settlements too provided that Weinstein paid the firm up to a million dollars for each offense. I dubbed that a “pay to prey” clause.
Did O’Reilly have to pay Fox News or 21st Century Fox any penalties when he settled with someone? Or was there total impunity in his case?
Former Fox News star Bill O’Reilly had a deal with the 21st Century Fox Inc. network that he couldn’t be fired over unproven harassment allegations, a fresh revelation that casts doubt over corporate-governance standards at Rupert Murdoch’s media empire.
O’Reilly’s contract said he couldn’t be dismissed based on an allegation unless it was proven in court, Jacques Nasser, an independent Fox director, told U.K.’s Competition & Markets Authority, according to a summary published Wednesday. O’Reilly, the former host of “The O’Reilly Factor,” has denied all wrongdoing…
“It’s another nail in the standards coffin as far as Fox is concerned,” said Steven Barnett, a professor of communications at the University of Westminster. “It speaks volumes about the nature of a company if you can pile up multiple accusations and be protected by such a clause.”
Normally a business wouldn’t allow itself to be forced to keep an employee on the payroll whose alleged behavior had brought it into public disrepute. But that’s what the O’Reilly clause amounted to in practice, it seems. Since he had the financial wherewithal to pay virtually any amount to settle a claim out of court, the only way Fox would have been in a position to fire him is if an accuser had refused on principle all attempts by O’Reilly to settle and instead insisted on a lawsuit. This maybe helps explain the blockbuster $32 million that O’Reilly reportedly paid to Lis Wiehl. Wiehl supposedly prepared a draft complaint; it may be that she was *very* determined to go to court and tell the world what happened between them. O’Reilly knew that losing a court battle would also possibly mean losing his job, a double financial blow. He may have run the numbers and concluded that between likely damages for Wiehl and lost income from Fox, the rational move was to pay Wiehl pretty much whatever she asked for, no matter how exorbitant.
There’s a key difference between O’Reilly and Weinstein, though. Weinstein’s contract included a “pay to prey” clause to the bitter end, even in the most recent deal he signed a few years ago. O’Reilly, on the other hand, gave up the clause in his contract preventing him from being fired for harassment without a court verdict in the deal he signed earlier this year. That’s how Fox was able to dismiss him in April. The new contract permitted the company to let him go based on a pure allegation, without any court proceedings.
The question is why. Why would O’Reilly have given up that kind of leverage knowing there were other settlements out there which might — and did — leak to a newspaper like the New York Times? I wonder if the key factor wasn’t the Ailes scandal and Fox’s desire to clean up its image in the aftermath. So long as Ailes’s own behavior towards women at the network remained a secret, 21st Century Fox may have been content to give O’Reilly extra protection in his own contract from being fired. Once Ailes became a story, though, the company needed to be able to demonstrate a “zero tolerance” stance towards bad behavior if necessary. And O’Reilly was in no position to argue: Fox apparently learned that he had settled with Wiehl shortly before re-signing him in February and may have considered letting him go right then unless he agreed to give them new power to dismiss him for any future harassment allegations. Again, this would help explain why O’Reilly might have been willing to pay Wiehl that mega-settlement. Between court threats from her and a very real chance that Fox would simply let his current deal expire and allow him to become a free agent, he may have been willing to agree to anything. A $32 million payout for Wiehl? Sure, okay! No more “harassment settlements are fine so long as you don’t lose in court” clause? Done!
There’s a key similarity between O’Reilly and Weinstein too, of course. Although their most recent contracts were different in a key respect, each of them received a new contract despite his employer knowing of previous settlements. Payouts to accusers were no bar to keeping them on staff and in close contact with all sorts of women inside the building. The clauses in their contracts aren’t the big scandal, the fact of their contracts is.