Sally Helppie, a film producer and entertainment attorney with Vincent Serafino Geary Waddell Jenevein in Dallas, and Amy E. Mitchell, an Austin-based entertainment attorney focused on music and television, discussed morals clauses during a panel last week at SXSW in Austin.
“A morals clause is a contractual condition that gives one contracting party, usually a producer or production company, the right to unilaterally terminate the agreement or take some kind of punitive action against the other party, who is usually an actor, or an individual who they want to use their image, in the event that other party engages in bad behavior or conduct that could negatively impact the project because the association with his or her public image,” Mitchell said.
Morals clauses differ from Title VII. “Title VII of the Civil Rights Act of 1964 deals with discrimination, including in the workplace, and that’s what we’ve seen in the news lately with the Harvey Weinstein matter, the [Kevin] Spacey matter, and people acting badly,” Helppie said.
Adding a morals clause to a contract can create friction between producers and talent, sometimes resulting in the talent not even wanting to work with the producer.
“Morals clauses are often hotly contested by the talent reps in negotiation. Being able to identify the conduct specifically that you want prohibited, based on the specific client needs, should really be your goal. You don’t want to insist on these vague prohibitions that tend to bring somebody into disrepute or rely on these social norms that change over time,” Mitchell said.
There are a number of questions that one should ask when negotiating a morals contract regarding specificity, natures of the crime or activity, and whether a conviction is necessary to trigger the morals clause, Mitchell said.
The duration or reach of the contract should also go into consideration during negotiations, Helppie said.
“Another questions to consider is whether it should apply only to conduct that occurs during the contract term or conduct that may have occurred in the past but came to light during the contract term,” Helppie said. Helppie referenced Paula Deen as an example of past conduct creating a problem.
Defining behavior makes it easier to define what constitutes a breach of the morals clause in a contract. The production side of the contract will prefer the objective measurement of the conduct be left to the sole discretion of the producer. The talent side will argue for reasonable judgment by a panel of two or more people involved with the project, Helppie said.
Punishments as the result of a breach can range from termination, loss of future payments related to a project, disgorgement of money paid, loss of editing rights, and loss of credit, Helppie said.
There are sometimes “cures” inserted into morals clauses. These “cures” allow the producer, at their own discretion, to elect not to trigger the morals clause against a performer for illicit behavior, Mitchell said.
Morals clauses are forbidden in the contracts of the Directors Guild of America and the Writers Guild of America. Most professional sports leagues have morals clauses in their contracts; however, the scope of some of those morals clauses are being argued in court, Mitchell said.
The talent side does have its own recourse in the reverse morals clause that they can use against their employers.
“It protects the reputation of the talent, in this case, from corporate crimes and scandals. It allows clients to terminate agreements when an employer behaves badly,” Mitchell said.
Helppie said that reverse morals clauses are mainly appearing in endorsements rather than contracts with production.
“I don’t see that we’re going to see the reverse morals provisions get much traction with the actual productions, but I think we’re going to see it more in endorsement contracts,” Helppie said.
However, Helppie said talent representatives should consider proposing a reverse morals clause to the contract.
“It could be a negotiating term to soften language in other parts of morality provisions that are in the overall contract,” Helppie said.