“Faithfully” (Including How to Express an Employee’s Key Obligation in an Employment Agreement)

A reader who identified himself as “a faithful reader from Northern Virginia” asked me about use of the word faithfully in contracts—yet another usage that had somehow escaped my scrutiny.

In trawling for faithfully on the SEC’s EDGAR system, I saw that it’s used primarily in provisions stating an employee’s principal obligation under an employment agreement:

Executive shall devote her best efforts and sufficient business time and attention to the business and affairs of the Company and shall diligently, faithfully and competently perform her duties and responsibilities hereunder; …

During the Employment Term, Executive agrees to … (ii) to use Executive’s best efforts to perform faithfully and efficiently Executive’s duties hereunder …

Executive agrees to be a loyal executive and that he will at all times faithfully, industriously and to the best of his ability, experience and talents perform all the duties that may be required of him pursuant to the express and implicit terms hereof …

Employee shall conduct himself at all times faithfully, loyally, and to the best of his abilities, and according to the best interests of the Company.

To which I say, as I do periodically, You cannot be serious! (Go here to put yourself in the appropriate mood.)

For one thing, what does loyalty have to do with it? (The term of art “duty of loyalty” applies only to corporate fiduriaries, including directors.)

But more broadly, note how other wishy-washy words are piled on: diligently, competently, industriously, and so on.

Here’s the problem: If an employee is in management, it might well not be clear exactly what the employee will be called on to do—that will depend on how the company’s business develops. And whatever the employee ends up doing, it likely won’t consist of performing some discrete, quantifiable task. Instead, it will call on the employee’s expertise, judgment, and experience.

Measuring that kind of performance is subjective. For lack of anything more tangible, drafters throw in faithfully and the like. But I don’t think it does any good. In a contract you might well say that the employee is obligated to perform duties specified by the CEO (or, in the case of the CEO, by the board of directors), is obligated to work full-time, and can be fired for specific transgressions. Beyond that, you face the question of whether the employee will do a good job and be successful. Unless you come up with quantifiable targets, imposing on an employee an obligation to be successful wouldn’t work. So drafters make impotent gestures in that direction—that’s where faithfully comes in.

So I recommend that (1) you be as specific as possible regarding an employee’s duties and (2) accept that if beyond that the employee doesn’t work out as you had expected, you’ll have to terminate them without cause, with whatever consequences, or lack of consequences, arise under the contract. So forget about faithfully and the like. But I’m no employment lawyer; I’ll be interested to hear what, if anything, those guys have to say.

Now, to round out the discussion of faithfully, you also see it used in connection with specific obligations:

Tenant and Tenant’s Occupants shall faithfully observe and comply with all of the rules set forth on the attached Exhibit B …

Each Loan Party shall, from time to time, at its expense, faithfully preserve and protect the Collateral Agent’s Lien on and Prior Security Interest …

The party either complies with the obligation, or doesn’t. What does faithfully accomplish?

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.