Christine Coleman

Christine S. Coleman Associate

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CBS Denies $120 Million in Severance to Former CEO

In August of 2018, after The New Yorker published an exposé detailing multiple accounts of sexual assault and harassment at the hands of the then CEO of CBS Corporation, Leslie Moonves, CBS hired two law firms to independently investigate the allegations to determine whether violations of the CBS sexual harassment policy or Mr. Moonves’ employment agreement had occurred.

Although Moonves initially was allowed to maintain his position, after some initial investigation, concerns arose that Moonves was impeding the investigation using his stature as the CEO. After the investigators reported this concern, the Board felt justified in being able to force Mr. Moonves to step down in September 2018. While Moonves was entitled to $120 million in severance if his employment contract ended prematurely without cause, he was not entitled to any severance if his employment ended for cause. Under his employment contract, a violation of CBS’s sexual harassment policy, failure to cooperate with a CBS investigation or impeding an investigation (among other things) would constitute “cause.”

In their report, investigators substantiated claims that Moonves “engaged in multiple acts of serious nonconsensual sexual misconduct in and outside the workplace both before and after he came to CBS in 1995.” The investigators further stated that they found Mr. Moonves to be less than credible. Specifically, the investigators concluded that during the investigation, Moonves had been “evasive and untruthful at times” and that he “deliberately lied about and minimized the extent of his sexual misconduct.”

As a result of the independent investigator’s findings of violations of the sexual harassment policy and that Moonves impeded the investigation, the CBS Board announced on December 17, 2018 that it would not be making any severance payment to Mr. Moonves. Under the terms of his employment agreement, Mr. Moonves will have an opportunity to fight the Board’s decision in arbitration.

Most internal investigations will not present a cost-savings of $120 million; however, where an organization conducts a prompt, thorough investigation and takes action to correct or end any sexual harassment, the organization will find itself in a better position to defend itself in a subsequent charge of discrimination or lawsuit, which may save thousands or even millions of dollars. Though not every situation calls for an independent investigation by an outside firm, where an investigation will be very complex, implicates powerful individuals within the organization or where litigation is highly anticipated, an independent investigation should be considered.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years, and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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