With morality clauses becoming more commonplace in the ‘post-Weinstein era,’ there could be increased litigation over what behaviour rightfully triggers the termination of a contract, Toronto civil litigator, Maija Pluto, tells Advocate Daily.
Morality or moral clauses typically appear in promotional or celebrity endorsement contracts, in an attempt to govern off-the-job behaviour of individuals working for or associated with a certain company or brand, says Pluto, an associate with Gaertner Baron Professional Corporation.
“Its a clause that allows one of the contracting parties, typically an employer or a company/brand in need of promotion, to terminate the contract with an employee or a celebrity endorser if they commit behaviour that would be viewed by the public as immoral or reprehensible,” she says.
The Ontario Court of Appeal dealt with the issue of morality clauses in a recent decision, she says. The plaintiff — a professional hockey player — signed a two-year contract with the defendant company to promote one of its products. The contract, signed in May 2011, was renewable for a further two years at the option of the plaintiff.
After less than a year, the defendant terminated the contract, citing two reasons: 1) the plaintiff lost cachet when he was demoted to a minor league team, and 2) he was the subject of a so-called “nude photo scandal,” the decision states.
In December 2011, nude selfies of the hockey player surfaced online, which gained mainstream media attention. At trial, he testified that he had taken the photographs himself and sent them electronically to his then-girlfriend in late 2010 or early 2011.
The decision states he didn’t consent to the photos being posted, and when he became aware they were online, he hired a lawyer to have the photographs taken down.
The plaintiff sued for $162,500, which was the unpaid balance of the income he would have received over the remainder of the contract and renewal term.
The defendant argued the nude photo scandal meant that the plaintiff could not function as a brand ambassador and gave it grounds for termination under the morals clause in his contract.
However, the court noted that the clause was concerned with the actions of the athlete, not of someone else:
“On the undisputed evidence, the internet posting of the nude photos was not the action of the plaintiff, but instead was carried out by someone else. It was done without [his] knowledge or consent. To this extent, then, the internet posting was not an act committed by [the plaintiff] and the clause was therefore not triggered.”
The appeal court stated that while the plaintiff was both the subject and photographer of the photos and chose to send them to his then-girlfriend (which could be argued was an action to trigger the clause), the creation of the photos and their release took place well before the contract was signed.
For sake of analysis, even if the clause applied retroactively, the court questioned whether the plaintiff committed an act “which shocks, insults, or offends the community, or which has the effect of ridiculing public morals and decency” by sending nude selfies to his then-girlfriend.
“The private communication of intimate information is a fact of life that is not a new phenomenon. Private letters, poems, sketches, photographs and the like, containing intimate information, have been exchanged between individuals for centuries,” the panel found.
The decision went on the state that “for consenting adults to communicate in such a fashion, with an expectation of privacy, would not, in my view, be likely to shock, insult, or offend the community or ridicule public morals and decency.”
The appeal court ordered the defendant to pay damages in the amount of $162,500.
Pluto, who was not involved in the matter and comments generally, adds that morality clauses are not just contained in promotional or celebrity endorsement contracts, but can also be part of regular employment agreements.
“With heightened sensitivity around misconduct, it may soon become more common, with companies turning to morality clauses in order to protect their reputations and investments,” she says.