By Valery Piedra & Emilio Nicolas

Here is a seemingly trending tale in Hollywood: A film production has cast the lead role. The press release has been made. The news is trending on social media. Investments are starting to pour in. But then controversy strikes as news comes out that the lead has committed socially objectionable behavior. Things start spiraling quickly. Hashtags to boycott the film start to trend. Distributors will not agree to carry the film. Investors begin pulling funds. Now, if you are the producer, you might ask yourself, “How can I disassociate the film from its now controversial lead?” You might be able to if you have a morality clause.

In talent agreements, a morality clause allows the producers to distance themselves as part of their crisis management plan and terminate the talent’s contract if the talent has engaged in certain socially objectionable behavior or otherwise ends up in a scandal that might harm the project. While these clauses have been around the film and television industries for decades, the growing focus in recent years on social media and social movements like #MeToo have thrown these clauses into the spotlight.

While helpful for producers, morality clauses are not without controversy. Talent, especially A-list talent, might view the inclusion of a morality clause as overbearing and a deal breaker. Some union groups, such as the Writers Guild of America (WGA) and the Directors Guild of America (DGA), have taken stances against morality clauses, arguing that the clauses are overbroad and ripe for abuse, and prohibiting their inclusion in guild member agreements. However, the Screen Actors Guild-American Federation of Radio and Television Artists (SAG-AFTRA) has remained mostly silent on the issue. Below are several things to consider when negotiating a morality clause.

Scope

Morality clauses may be drafted broadly or narrowly. A broad morality clause affords the producers a greater range of reasons to terminate a talent’s agreement. However, the talent will likely view a broadly worded (or boilerplate) morality clause as overbroad and ambiguous, leading to concerns about potential abuse of contract. A narrow moral clause is far more palatable to the talent because it limits termination to more specific fact patterns; however, such specific limitations exposes the producer to more potential risk. So when drafting a morality clause, take the time to ask yourself:

• What is the talent’s background and reputation? Has a background check revealed any issues of concern?
• Is the project’s subject matter or target audience such that a certain type of scandal might negatively affect the project’s success? For example, will audiences care if it was revealed during your film’s production that an actor was a recreational drug user? Will they care if it was revealed that the actor was a nude model in a past lifetime? Maybe not if the film is an R-rated action flick. But possibly if the film is a family feature.
• Which actions will trigger the clause? Do you want them to be specific or to remain broad?
• Who decides if the clause was triggered?
• Does the clause apply when an act becomes public, or does it only apply to conduct committed during the contract period?
• Does the clause extend to acts committed by those closely associated to the talent?
• Does the morality clause go both ways? For instance, if the production company comes under fire for a comment it made, can the talent leave?

The answers will help you draft a morality clause that is better tailored to the needs of both parties and more likely to be accepted by the talent (and the talent’s attorney and agent).

Remedies

There are a range of remedies that are negotiated into a moral rights clause. Determining which remedy is best for your agreement will depend on your personal circumstances. Some potential remedies include:

• Termination of the agreement with no pay;
• Termination of the agreement with partial pay;
• Indemnification for collateral damage; and/or
• An option for the producers to control all communications with the media if the talent violates the morality clause.

Agreements in the film and television industries are not the only ones that have a use for morality clauses. Morality clauses may be found in any business situation where the act of one party can reflect negatively on the other, such as licensing and endorsement deals. Their inclusion can be invaluable should a party become embroiled in a scandal that indirectly harms a project’s success by association. So the next time you find yourself negotiating a contract with talent, you might give some thought to the inclusion of a morality clause.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.