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Blogs | September 13, 2011
4 minute read
Augmented Legality

Morals Clauses, Spokespeople, and Social Media

When big brands sign endorsement deals with professional athletes and other celebrities, the endorsement contract typically include a "morals clause."  This lets the company terminate the deal immediately if the spokesperson does something to sully their public image.  These clauses are usually very broad, vaguely worded (with phrases like "scandal" and "public disrepute"), and give the company absolute discretion to decide what is "immoral" behavior.  That can put quite severe restrictions on the spokesperson's behavior. But from the company's perspective, it's simply protecting their investment.  After all, the goodwill associated with the spokesperson is what the company is hoping to benefit from by blending the public's perception of the spokesperson and the brand being endorsed.  If the spokesperson undermines his own reputation, he's destroyed the very "asset" that the company purchased.

Pittsburgh Steelers running back Rashard Mendenhall recently found this out the hard way.  He had signed an endorsement deal with Hanesbrands, the parent company of Champion Sports.  Hanesbrands paid Mendenhall well to endorse the Champion brand.

But Mendenhall--like so many professional athletes these days--also has a habit of running his mouth off about controversial social issues on Twitter.  Shortly after May 1, 2011, when Osama Bin Laden was killed, Mendenhall tweeted:  "What kind of person celebrates death? It's amazing how people can HATE a man they have never even heard speak. We've only heard one side..."  About the 9/11 attacks, he wrote: "We'll never know what really happened. I just have a hard time believing a plane could take a skyscraper down demolition style."

People can, and did, disagree about whether these posts crossed the line.  Hanesbrands, however, decided that the public attention these tweets drew had sullied Mendenhall's reputation enough that the company no longer wanted to be associated with him.  It used the morals clause to terminate the contract.

This kind of thing happens to disgraced athlete spokespeople--like Michael Vick and Tiger Woods--all the time.  But rather than taking his lumps and moving on, Mendenhall sued Hanesbrands for breach of contract.

Mendenhall's primary argument is an interesting one.  (He and his lawyers call it a "First Amendment" argument, but, as I recently noted, Hanesbrands correctly responds that private companies are not bound to respect free speech rights.)  He basically argues "waiver"--that Hanesbrands waived its right to use Mendenhalls' tweets as a reason to terminate the contract, because he had previously tweeted so many other offensive things that Hanesbrands didn't object to.  In support, his complaint recites prior tweets that call women a "selfish species," encourage oral sex, debate the merits of Islam, and compare the NFL to slavery.  It's a bit of a scorched earth strategy for someone whose end goal is to remain a spokesperson, but if that's how Mendenhall wants to define his public persona, that's his decision.

Regardless of the strength of this argument, Mendenhall faces an uphill battle, because courts routinely uphold morals clauses like this one.  As far back as 1950's Loew's Inc. v. Cole, a federal appeals court upheld the termination of a Hollywood screenwriter who was convicted of lying to the McCarthy Commission.   More recently, in 2010's Galaviz v. Post-Newsweek Stations, San Antonio, Inc.,  another federal court rejected the appeal of a TV news reporter fired after her arrest for a domestic dispute.  In 2005's Nader v. ABC TV, Inc., a court upheld the firing of an "All My Children" actor after his arrest for cocaine possession and resisting arrest.  Indeed, although I haven't researched the issue exhaustively, I have yet to discover (and I haven't seen anything from Mendenhall pointing anyone to) a case that didn't enforce a morals clause under similar circumstances.

The take-away for athletes, agents, and corporate attorneys alike is the same: pay attention to what the athlete says in social media.  So many athletes have gotten themselves in hot water online by now that it's almost become cliche.  In a recent interview, Professor Porcher Taylor of the School of Continuing Studies at the University of Richmond said: "Every celebrity endorsement contract of any kind in the future must have a Twitter/Social Media clause ....  I will be so bold as to state that the failure to not have such a clause would be tantamount to endorsement contract drafting malpractice."

What do you think--is he right?

[Thanks to employment attorney Cameron Evans for providing insight on this post.]