Bill O’Reilly, the former Fox News presenter, had a clause in his contract that meant he could not be fired over harassment allegations unless they were proved in court.
The revelation was made by Jacques Nasser, an independent director of Fox, during a hearing with the Competition and Markets Authority about its investigation into 21st Century Fox’s £11.7bn takeover of Sky.
O’Reilly’s employment agreement will increase concerns about 21st Century Fox’s handling of a sexual harassment scandal at Fox News. The scandal eventually led to the sacking of O’Reilly, who denies the allegations, and the departure of Roger Ailes, the former boss of Fox News, who has since died.
The sexual harassment scandal at Fox News has dogged Fox’s attempt to buy Sky and created more opposition to the deal. The CMA is investigating the deal on the grounds of media plurality and commitment to broadcasting standards.
The CMA’s notes about the meeting with Nasser, the former head of the car maker Ford, were published on Wednesday.
According to the notes, Nasser said that when the board of Fox was informed of several harassment allegations against Ailes it had not been made aware of them before and reacted “quickly”, with Ailes leaving within days and several other senior figures leaving in the following months.
However the situation was “different” when the board of Fox was informed of the allegations against O’Reilly. “This was in part related to there being an employment agreement with Bill O’Reilly which stated he could not be dismissed on the basis of an allegation unless that allegation was proved in court,” the CMA said of the meeting with Nasser. “Further, at the time of the allegations being raised, the evidence was uncertain.”
Nasser said the board was aware that O’Reilly had made settlements with accusers but did not know the value of the settlements.
Some board members wanted to dismiss O’Reilly immediately, he added, while others wanted to wait for his contract to be renewed.
According to Nasser, when Fox then renewed O’Reilly’s contract, “the board ensured that a clause was inserted to state that he could be dismissed on the grounds of an allegation against him without it having to be proved in court”.
Fox was criticised last month after the New York Times revealed that O’Reilly agreed a $32m (£24m) settlement with one accuser last January and that the company knew about it when they offered him a contract extension the next month.
Fox confirmed at the time that it knew about the settlement, but said the financial terms were not disclosed and that new contract with O’Reilly “added protections for the company specifically aimed at harassment, including that Mr O’Reilly could be dismissed if the company was made aware of other allegations or if additional relevant information was obtained in a company investigation”.
O’Reilly left Fox News in April 2017, two months after the contract was agreed.
Nasser told the CMA that “with the benefit of hindsight” the Fox board should have known about the allegations against O’Reilly earlier.
The CMA notes said: “JN [Nasser]acknowledged that perhaps, with the benefit of hindsight, there could have been better governance structures in place at Fox News to ensure that the board came to know of allegations at an earlier stage.
“However, he confirmed that changes had subsequently been made to address this. JN stated that it is never easy to ascertain what the best governance structure for a company is and in his experience different companies have different processes in place as suits the nature of the business operations.
“JN stated that as a result of the sexual harassment allegations, the 21CF [Fox] board has now implemented processes and structures to ensure allegations are escalated to the board quicker and to change the culture within the entire company to prevent harassment from occurring in the first place. He added that, in his view, it would not be conceivable that anyone at 21CF or Fox News would now believe that he or she may misbehave with impunity.”