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>that stated I would be responsible for all monetary harm if I were to leak information about the project >If I were applying for a CEO position and saw a clau
by xoa 9y ago
>that stated I would be responsible for all monetary harm if I were to leak information about the project
>If I were applying for a CEO position and saw a clause like this, I'd refuse to sign that contract, too. So United isn't wrong...
I might be reading it incorrectly, but I think there is a very big difference between capped and uncapped liability/penalty clauses. What you seem to be describing facing sounds like the latter, and yes that should give absolutely anyone, anywhere, in any situation, the screaming hibbie-jibbies. I think looking for that sort of clause, which can be subtle, is probably one of the more important things when going over any contract. As long as liability is limited the rest can be planned out, but of course nobody can sanely deal with infinities. On a larger level that's the fundamental point behind limited liability corporations, the bankruptcy code, hard learned principles regarding the non-inheritability of debt, and so forth.
But I don't think that's the same thing as a pay clawback, which is fundamentally capped. "You break the law, you face a maximum (with us) penalty of your salary for those years" doesn't seem unreasonable at all at c-level. They're not being asked to take retroactive responsibility for something amorphous like "failure", nor is the sum unbounded or affecting their personal net worth before taking the job, or even for that matter touching any money they made using their holding of that salary before the clawback like interest/investments. It feels like a reasonable deal: don't commit and (company related at least) felonies while on the job, if you do then your contract of employment was voided at that time and the company wants its money back. Again looking to corporate liability limitations, they don't apply if someone purposefully pierces the corporate veil for example. It's not supposed to be a shield against serious breaking of the law.
I can see how some clawback terms could go way too far, with trigger clauses being too fuzzy, penalties not bearing reasonable relation to the violation, or both, but I'm not sure the concept itself is theoretically bankrupt.
- stale2002 9y agoMaybe it is "fair". But the problem is that the market doesn't care about "fair". Personally, I would absolutely refuse to sign such an agreement. You can't force people to accept your contract. If all the good CEOs look at your contract and run away.... well now you are stuck with only bad CEOs who were desperate enough to agree to your contract. That is the market speaking.
- hedora 9y agoIt sounds like the lawsuit against United focuses on payments from a bonus program and a severance package. If you have ever taken a job, you have signed an agreement that limits payments of performance bonuses and severance packages in the case of gross misconduct. I suspect the employment agreements for the executives in this case included such clauses. The board failed to enforce them at an expense of millions of dollars. The investors are right to sue.
- realusername 9y agoIf you press the wrong button and end up making the company lose money, I don't see any reason why you should be accountable. You are paid for a job, not for having company responsibilities (otherwise you would be paid far more). Losses should be covered by processes/insurances set up by the company.
- muninn_ 9y agoIt'll never work that way because you would also have to pay people for the value they create when they push the right button. Also, I'm pretty sure excluding negligence a company can only fire you if you do something bad or an accident happens by law.