Morality clauses in the era of social media scandals – what brands should know

5 minute read
13 January 2022

The morality clause – a contractual provision requiring a party to comply with certain standards of behaviour – has long been a feature of spokesperson and endorsement agreements. Yet in the current age of cancel culture, #MeToo, and influencer marketing, these provisions have become a primary focus for businesses when onboarding an individual to be the public face of their brand.

The behaviour of those who represent a company will undoubtedly be perceived as an extension of the values, beliefs, and attitudes of the company itself. As such, it is essential for a brand to ensure the public behaviour of brand partners corresponds with the image it wants to project. Should a brand representative become embroiled in scandal or controversy, or should public opinion otherwise turn against them, this could ultimately pose significant risk to the brand.

To protect against this risk, companies will typically include morality clauses in contracts for new brand partners. Such clauses typically stipulate that a company may terminate an agreement, and also be compensated for certain damages incurred as a result of illegal or immoral actions. Naturally, these clauses serve as an essential tool for a brand wishing to maintain control over its public image. A strong morality clause enables a safer brand-talent relationship, but crafting such a clause is increasingly complex given the diverse range of circumstances they may cover.

When drafting a morality clause, a brand may wish to consider the following key questions:

  • What behaviour or circumstances should trigger the clause? Historically, morality clauses were often intended to come into play in the event of criminal charges, but now increasingly cover much broader situations. As many recent examples have shown, behaviour need not be criminal to significantly damage a company's brand. In some cases, morality clauses can be tailored to the individual in question, or take into account a particular community, target audience, or the brand's clientele.
  • Will the clause be triggered solely by the actual conduct of the individual, or could it also be triggered by allegations of such conduct? Several incidents in recent history have shown that widespread public belief in nefarious allegations (including sexual misconduct) have caused significant damage to reputations. From the perspective of a brand, public opinion absolutely matters when safeguarding one's reputation.
  • Will the clause be triggered solely by an individual's actions, or could it encompass the actions of others? We have previously reported on an Ontario case in which nude photographs of a hockey player were released online by a third party. The court concluded that the brand represented by the athlete was not permitted to terminate the relationship, in part because the morality clause in his contract permitted such termination in response to his own actions, not those of another party.
  • How is the clause worded? Vague terminology, such as stating that a partnership may be terminated in the case of "immoral activity" or "behaviour that shocks the public conscience," remain open to interpretation. In order to avoid potential disputes, the wording of these clauses should be clear and unambiguous.
  • Could the clause be triggered by conduct outside the term of the agreement? For example, what happens if controversial actions or statements from the past emerge while a brand partner is under contract, or if this occurs while the individual is enjoying post-agreement benefits? These questions are particularly important in the age of social media; in several recent high-profile examples, controversial comments posted online years ago have come back to haunt their authors. Consider whether a morality clause should be triggered based on when the acts or allegations become public, as opposed to when they occurred.  
  • How does the morality clause interact with the rest of the agreement? Can funds invested be recuperated once the clause is triggered? What will happen to content that is already in market?
  • Who handles communications in the case of a scandal or controversy? The brand may wish to state that if a controversy triggers the morality clause, the brand will control (or have the right of preapproval) over all public communications regarding the issue, including statements on social media, to news media outlets, etc.

Increasingly, those who represent a brand are viewed as the brand itself, and robust morality clauses will help ensure that a brand's values are well- represented. Communication is key to ensuring that all parties understand their obligations, as well as the shared values they wish to promote.

Finally, once a morality clause is in effect, it is important for a brand to monitor the behaviour of the individual involved, online or otherwise, to help gauge the public's reaction and to keep an eye on any media attention being generated.

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