“Moral Turpitude”—The Complete Post

[In this recent blog post I provided a partial analysis of the phrase moral turpitude and invited readers to complete it for me. No one took up my challenge with sufficient vigor to warrant awarding the prize, a signed copy of A Manual of Style for Contract Drafting. (Cue much wailing and gnashing of teeth!) What this episode taught me is that you, dear readers, are, perhaps like blog readers generally, a mercurial bunch—you’ve provided me with amazing leads but I can’t expect you to perform on command. At any rate, below is the completed blog post. A note in brackets indicates where my addition starts.]

Background 

In September the WSJ Law Blog posted this item dealing with a Ninth Circuit case, Marmolejo-Campos v. Gonzales, that hinged on the meaning of the phrase moral turpitude. Eric Goldman sensibly suggested that I might want to look into it, hence this post.

Black’s Law Dictionary defines moral turpitude as meaning “Conduct that is contrary to justice, honesty, or morality.” It also quotes 50 Am. Jur. 2d Libel and Slander § 165, at 454 (1995):

Moral turpitude means, in general, shameful wickedness—so extreme a departure from ordinary standards of honest, good morals, justice, or ethics as to be shocking to the moral sense of the community. It has also been defined as an act of baseness, vileness, or depravity in the private and social duties which one person owes to another, or to society in general, contrary to the accepted and customary rule of right and duty between people.

For all its heavy-breathing pomposity, this definition is no more enlightening than the more succinct Black’s definition. There’s no getting around the fact that the phrase moral turpitude is utterly vague.

That explains how in the Marmolejo-Campos case the Ninth Circuit came to conclude that driving drunk isn’t an act of moral turpitude, but driving drunk without a license is. It also explains the lengthy dissenting opinion.

Despite its vagueness, the phrase moral turpitude is a fixture in employment agreements, consulting agreements, and employee benefit plans, where it routinely features as one of the grounds for termination for cause:

the Executive’s admission or conviction of, or plea of nolo contendere to, a felony or of any crime involving moral turpitude, fraud, embezzlement, theft or misrepresentation; …

It also appears in other kinds of agreements. For example, in a loan agreement the lender might require the borrower to represent that no person associated with the borrower has been convicted of any crime involving moral turpitude.

The Ninth Circuit’s adventures in determining what moral turpitude is got me to thinking that one ought to be able to come up with a clearer alternative. But it would be futile to consider that phrase in isolation. [New text begins here.] Instead, I considered more generally termination provisions that feature moral turpitude.

Such provisions—I’ll refer to them as “termination-for-crime provisions”—allow a party to terminate if another party has been involved in some sort of crime. But they feature a number of possible elements, each of which can be structured in different ways. I consider each of those elements below.

What Crime?

The crime triggering the right to terminate might expressed in one or more of the following ways:

• crime [preferable to the bureacratic “criminal offense”]
• felony or the equivalent crime punishable by death or imprisonment in excess of one year [includes murder, rape, kidnapping, grand theft, arson, fraud, and other major crimes; problem is that this term isn’t recognized in civil-law jurisdictions, most other common-law jurisdictions, and even some U.S. states, for example New Jersey, and in those states where it is recognized, its meaning may vary]
• misdemeanor [more serious ones include theft, prostitution, public intoxication, simple assault, disorderly conduct, trespass, vandalism; less serious ones involve only fine and no social stigma and include parking and minor traffic offenses, late payment of fees, and building code violations; poses the same problem as “felony”]

Involving?

Sometimes the kind of crime is modified by an adjectival phrase providing further information regarding the nature of the offense. This is where moral turpitude comes in, along with a number of other labels that drafters are fond of stringing them together:

• moral turpitude
• dishonesty
• deceit
• misrepresentation
• theft
• fraud
• embezzlement

Dishonesty gets my vote—it’s broad enough to encompass all the others, other than perhaps the mysterious moral turpitude.

Exclusion?

Sometimes a carveout is tacked on to the kind of crime. Here are three examples:

• a crime in which a fine or other non-custodial penalty is imposed
• a crime that does not relate to driving while intoxicated or driving under the influence
• a crime that does not relate to services that the Consultant performs under this agreement

What Procedural Posture?

At what point in the criminal process does the right to terminate kick in? Here’s the spectrum, from earlier in the crime to later:

• when Doe commits the crime [but in advance of any proceedings, who knows whether a crime has been committed?]
• when Doe is arrested for the crime [but only in the case of more serious crimes is the suspect arrested]
• when Doe is indicted for the crime [but only in the case of more serious crimes is the suspect indicted, and in many jurisdictions indictment is not the only way of charging a suspect]
• when Doe is charged with the crime [this would apply to all crimes]
• when Doe is convicted of the crime or pleads guilty or no contest to the crime [given the often protracted nature of criminal proceedings when anything other than a minor crime is involved, this standard raises the question whether using it would, from the non-terminating party’s perspective, unduly delay the right to terminate]

Which Jurisdiction?

If you use terminology that might vary by jurisdiction, you’d need to allude to a given jurisdiction, so as to avoid any argument about exactly what, for example, “felony” means. Here’s a straightforward formulation: “constituting a felony in the jurisdiction in which the crime is committed.”

Doubling Up?

A drafter might want to refer to two or more kinds of crime in a termination-for-crime provision. For example, the right could kick in on conviction of a felony or conviction of a crime involving dishonesty.

One could complicate matters further by refering to a different procedural posture for each crime. For example, the right to terminate could kick in on conviction of a felony or on indictment for a felony involving dishonesty or fraud.

My Recommendation

If one were of a mind to, one could cobble together a truly complicated termination-for-crime provision out of the above parameters. I favor simplicity unless one has a good reason to opt for complexity. Here’s my first stab at a reasonable pro-employer termination-for-crime provision to use in an employment agreement:

the Employee is charged with any crime other than a crime that is unrelated to the Employee’s employment and is punishable only by a fine or other non-custodial penalty, or both

My thinking is that for the reasons noted above, I don’t want to use formalistic labels to refer to the kind of crime I’m concerned about. And if the offense doesn’t merit jail time, I’m not sure I care about it, unless the conduct relates directly to whatever services the individual is performing under the contract. Furthermore, I don’t want to be compelled to keep the employee around until he or she has been convicted or pleaded guilty. Is it possible that the charges might be dismissed? Yes, but that eventuality might best be addressed in provisions stating what the employee is entitled to on termination.

Note that I have in mind that the agreement would also include a vaguer provision allowing the company to terminate if the employee engages in conduct that the employee knows, or that a reasonable person in the position of the employee would know, is or would reasonably be expected to have a significant adverse effect on the business or reputation of the company or any of its directors, officers, employees, or affiliates. But the exact language one might use for such a provision, and how strong it should be, is a topic for another day.

But one thing is clear—one can cheerfully dispense with moral turpitude.