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What makes a good “morals clause”?

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Last Wednesday, a jury found that former talk show host Tavis Smiley violated the morals clause in his contract with a broadcaster. The verdict reinforced the notion today that morals clauses can be vital when dealing with a public figure.

Due to a growth in damaging revelations surrounding celebrity misconduct in the #MeToo era, morals clauses have become a staple in the media and entertainment industries. A morals clause is a contractual tool intended to give hiring parties a way out of their agreements if the hired party becomes a liability to their business through their actions or inactions.

Producers hiring talent for their productions, and brand owners looking to secure endorsement deals for their products, have a particular interest in perfecting these now common provisions. So what makes a robust morals clause?

1. What

A morals clause should contain a full and detailed description of what constitutes the type of behaviour that allows the hiring party to terminate or modify the agreement in question. Although it is ideal to cover off a broad scope of activities in these clauses, the devil can be in the lack of details. If the description of behaviours is too broad, it leaves the language open to interpretation and dispute among the parties – this could prolong the contractual relationship in question to the detriment of the hiring party.

2. When

A morals clause should state that the prohibited behaviour may have occurred at any time – i.e., before or during the engagement in question, while rendering services and during personal time. Commonly, morals clauses will address behaviour during the engagement, but neglect to cover off prior activities, which may not be widely known. The nature of the hiring party’s relationship with the hired party will dictate how willing they are to restrict the scope of time covered under a particular morals clause.

3. Where

A morals clause should state that the prohibited behaviour may have occurred in any and all jurisdictions, as applicable. Given the increasing global nature of audiences and markets, it would erode the value of a morals clause if it did not apply to conduct in a foreign jurisdiction, or conduct in a domestic jurisdiction that only affected foreign audiences.

4. Who

A morals clause shouldstate who will be considered when determining whether the hired party has caused harm as a result of their actions or inactions. Hiring parties may not be the only entities requiring protection from the threat of poor public relations due to celebrity misconduct. For example, distributors, brand partners and financial backers may wish to be named amongst those who might suffer damage due to breach of a morals clause.

5. “And then what”

A morals clause should provide clarity on the remedies the hiring party may have, should a hired party breach the morals clause. Remedies may involve termination (with or without a cure period), removal of credit (subject to guild or union requirements), reduction in payment, arbitration/mediation and discipline (more commonly seen for athletes), among other solutions. The key is to consider all actions the hiring party may want to take upon breach and lay out a detailed plan on how such actions will be taken. A defined plan will reduce the likelihood of procedural arguments over how a morals clause may be enforced, should it be necessary.

Many morals clauses will not encompass each of the elements above, depending on the balance of negotiating leverage between the parties and the parties’ overall relationship. Nevertheless, aiming for clarity and comprehensive contingencies in a morals clause will increase any producer or brand owner’s chance at saving time, money and face in the future.

For more information, please contact Caitlin Choi or another member of Dentons’ Media and Entertainment group.