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Avoid this risky employment contract loophole

Easily the most explosive scandal to come out of Hollywood this year is the onslaught of sexual assault allegations against movie tycoon Harvey Weinstein. Over 35 women, including several female employees of The Weinstein Company, have alleged that they were victims of the producer's sexual abuse.

Allegations of workplace sexual harassment are a nightmare for employers and employees alike, and many companies are taking measures to prevent a similar scandal within their ranks. One overlooked detail that has emerged from the case could serve as an important warning for business owners: Weinstein's employment contract may have had a loophole that allowed him to sexually harass women.

Legal analysts have suggested that Weinstein's employment contract was written in a way that allowed him to commit sexual harassment with impunity. The exposé on Weinstein revealed that the Weinstein Company's employment contract with the producer permitted misconduct so long as he reimbursed the company for any expenses he incurred. The wording may seem innocuous, but it is actually quite unsettling. It is more than likely that Weinstein's "misconduct" was sexual harassment, and the money that he reimbursed to the company was for attorneys' fees, and settlements with victims.

The vast majority of employers are honest, ethical companies that value the safety of their employees. As the Weinstein scandal shows, however, all it takes is one bad actor to take down an entire company. If your company's employment contracts are not legally and ethically airtight, your company could end up in a similar scandal. In the past few months alone, the Weinstein Co. has had to fire Harvey Weinstein, navigate a firestorm of media attention, potentially face criminal and civil charges, and possibly change its name. Therefore, it is wise to take extra precaution when it comes to your employment contracts.

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