In the wake of the #MeToo movement, it is increasingly common in corporate transactional documents to see buyers and related parties include so-called "Weinstein" clauses. Such provisions typically request that a target company represent and warrant whether its officers or executives have been the subject of allegations of sexual harassment or misconduct, and if the company has entered into any settlement agreements regarding these kinds of claims.

The purpose of a Weinstein clause is to provide assurance that the target company (including its officers and executives) is not a hotbed of sexual harassment or a ticking time bomb of claims waiting to explode, which would no doubt result in liability, embarrassment and potential loss of value for the acquiring parties. This primer on drafting and negotiating Weinstein clauses should help deal teams balance these risks.

Weinstein Clauses: Review and Negotiation

A deep dive into Weinstein clauses best starts with a typical buyer-friendly example:

Except as set forth on the company disclosure schedule, in the last 10 years, no allegations of sexual harassment or sexual misconduct have been made against any current or former officer of the company, and the company has not entered into any settlement agreements related to allegations of sexual harassment or sexual misconduct by an officer, executive or other employee of the company.