A sweetheart deal or sweetheart contract is a contractual agreement, usually worked out in secret, that greatly benefits some of the parties while inappropriately disadvantaging other parties or the public at large. The term was coined in the 1940s to describe corrupt labor contracts that were favorable to the employer rather than the workers, and usually involved some kind of kickback or special treatment for the labor negotiator. The term is also applied to special arrangements between private corporations and government entities, whereby the corporation and sometimes a government official reap the benefits, rather than the public.

No-bid contract Multisourcing is the concept of working with multiple suppliers who are also competitors. Large-scale buyers, such as the U.S. federal government, may want to feel assured that there is more than one supplier for an item. It has been described as ...

s may be awarded to people who have political connections or make donations to influential politicians. Sometimes a sweetheart deal involves tax breaks or other inducements to get a corporation to do business in that city or state. A "sweetheart settlement" may also occur in a legal context. For example, in a class-action lawsuit the attorneys representing a class of plaintiffs may reach an agreement with the defendant in which the primary result is a lucrative fee for the attorneys rather than maximum compensation for the class members.

Noted instances and allegations

*In a 1947 unionization dispute,

San Francisco San Francisco (; Spanish for " Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the fourth most populous in California and 17t ...

area grocery store owners claimed that other stores who had "given in" to union demands had signed sweetheart deals with the unions. *In a 1949 dispute between the rival

American Federation of Labor The American Federation of Labor (A.F. of L.) was a national federation of labor unions in the United States that continues today as the AFL-CIO. It was founded in Columbus, Ohio, in 1886 by an alliance of craft unions eager to provide mutua ...

(AFL) and the

Congress of Industrial Organizations The Congress of Industrial Organizations (CIO) was a federation of unions that organized workers in industrial unions in the United States and Canada from 1935 to 1955. Originally created in 1935 as a committee within the American Federation of ...

(CIO) involving unionization of the laundry industry in

Indianapolis, Indiana Indianapolis (), colloquially known as Indy, is the state capital and most populous city of the U.S. state of Indiana and the seat of Marion County. According to the U.S. Census Bureau, the consolidated population of Indianapolis and Mar ...

, a lawyer for the 42 laundry and dry-cleaning plants testified before the National Labor Relations Board that an AFL union contract was not a sweetheart deal between the employers and AFL union officials, as alleged by the CIO. *The terms of a 2008 plea bargain to settle criminal charges against financier

Jeffrey Epstein Jeffrey Edward Epstein ( ; January 20, 1953August 10, 2019) was an American sex offender and financier. Epstein, who was born and raised in Brooklyn, New York City, began his professional life by teaching at the Dalton School in Manhattan, des ...

have been called a sweetheart deal by many commentators. *The

Tax Cuts and Jobs Act of 2017 The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, , is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs A ...

was said to contain an obscure sweetheart deal for certain tech companies.

Legal reform

The 1959 Landrum-Griffin Act was a federal law that attempted to prevent sweetheart labor contracts and other forms of corrupt dealing by unions.

2019 study

A 2019 study examined the language of government contracts, looking for "sweetheart terms" – wording that is "highly favorable to the firm, but not obviously advantageous to the government". They found that such language is more commonly included in contracts with firms that make political contributions.

References

{{reflist Contract law Labour law Tax terms