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Abstract: Company culture is not a new phenomenon. It refers generally to a set of beliefs and behaviors that guide how a company’s management and employees interact with each other and how they handle external business transactions. A company’s culture has always been relevant to employee retention and financial success, but recently its importance cannot be understated. Companies are not immune from the culture wars that divide the United States and countries across the globe. Increasingly, companies have become participants – willingly or not – in a wide range of social and political controversies. A company’s stakeholders in these ongoing culture wars include their employees, investors, and consumers. And those stakeholders make choices about which companies they want to work for, invest in, purchase from, and even boycott, based in part on a company’s beliefs and behaviors surrounding a variety of social issues like gender equality, diversity, LGBTQ+ rights, sustainability, human health, abortion rights, and so on.
These stakeholders are growing more critical of companies’ performative attempts to pacify them and often characterize such attempts as greenwashing or blackwashing. They expect more than just a rainbow flag during Pride month and a Black Lives Matter t-shirt featured in an advertisement. They expect companies to embrace these issues and incorporate their values into the way the company operates, both internally and externally. Companies have a vested interest in developing and nurturing a company culture that aligns with their stakeholders’ values, and also in telling the story of their company culture to as many stakeholders as possible.
While contract drafting is rarely seen as an avenue for developing and communicating company culture, let alone as a vehicle for social change, in this article we propose that contract drafting can be used to achieve both goals. By incorporating narrative techniques and impactful language, companies can use their contracts to tell the stories of the company culture that has become so important to their success. Because employment relationships embody such a vital role in so many individuals’ lives, this article focuses specifically on how companies can draft their employment contracts to better define and implement their company culture and thus improve their employee recruitment and retention, productivity, and financial success.
Beyond having an immediate impact on the transacting parties and even a company’s workforce, contract drafting can also be used as a vehicle for broader societal change. This is true for several reasons. First, private contracts necessarily have an impact on third parties. Second, while a single individual may lack sufficient bargaining power to seek favorable contract language, groups of individuals may yield great power if they work in tandem. Additionally, if a significant number of individual, unrelated contracts are drafted similarly to address key social issues, there may be a resulting culture shift. The use of the same or similar contract drafting language in numerous unrelated contracts can have a significant impact across an industry, or even more broadly. What may have started as a single company’s culture of promoting social good may eventually lead to a societal shift. Contract language also provides the benefit of incentivizing the transacting parties to act in accordance with their expressed intent, while also equipping the parties with the force of legal enforcement and tangible remedies.
This article begins by defining company culture and exploring its rising relevance. It will then address the value of incorporating storytelling and narrative techniques in contract drafting, highlighting four techniques that can assist drafters in crafting employment contracts that serve as a tool to develop and embed company culture. These techniques are character and voice; stock stories and counterstories; plot and alternative plot lines; and expressive language. By way of illustration, this article showcases how companies can embed a company culture of empowering women and preventing workplace sexual harassment into their employment contracts. It then explores ways in which companies can leverage their employment agreements to develop a company culture around Environmental, Social, and Governance (“ESG”) issues. ESG has emerged as a key factor in engaging today’s workforce, with one in three employees preferring to work for companies that are responsible to all stakeholders, not just investors and shareholders. Millennial and Gen Z employees are heavily influenced by employers’ ethical values in choosing where they work, and a recent study has shown that ESG values are among the most significant. Employers outside of the U.S. have already begun to find ways to develop a strong ESG culture as a means of attracting and retaining employees. This article explores ways that contract drafting techniques and language can effectively be used to develop and implement an ESG company culture to benefit the employer-employee relationship, the broader workforce, and beyond.
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