This article is written by Kritika Garg from National Law University Odisha. This is an exhaustive article that explains the morality clauses in sports contracts, their reasonability, drafting and effect on the athletes.
Table of Contents
Morality Clauses
Whenever a known personality, be it a celebrity or an athlete, enters into a contract and endorses any brand, then that individual represents the brand or the company in the eyes of the general public. As a result, the actions and the behaviour of the individual become attributable to the company. Sometimes, it might happen that the athlete may engage in some activities that he/she is not supposed to do. So, this creates a wrong reflection on the brand or the company that the athlete has endorsed, thus, affecting its goodwill. Therefore, in order to prevent such happenings, the companies, while signing an agreement with the athletes, include a morality clause. It basically states the things an athlete is not supposed to do or certain activities he should refrain from performing, during the term of the contract, in order to remain attached to the brand or the company.
Background
The morality clauses were first included by the Universal Film Company in September 1921, as a result of an alleged rape/murder scandal. This clause permitted the company to withhold the money payable to the actors or directors, under the agreement, who “forfeit the respect of the public”.
The first agreement with a moral clause for athletes was signed on 11th November 1992, between the New York Yankees and Babe Ruth, a baseball player. This clause refrained the latter from using any intoxicating liquor during the term of the contract. Consumption of any intoxicating liquor shall render the contract void and the other party shall have the right to claim money from the salary payable to him.
Role of Social Media
With social media being in-trend, actions of an athlete spread like wildfire. Whatever the athletes do, be it positive or negative, it certainly attracts the attention of the general public. This has led to the imposition of more restrictions by the companies or brands on the athletes at the time of signing an agreement. They even go to the extent of controlling the athlete’s social media accounts in terms of regulating his posts and stories. One such example is that of the agreement between Rashard Mendenhall and Hanesbrands. In May 2011, Rashard Mendenhall tweeted, on his Twitter account, about Osama Laden’s death. Hanesbrands found the tweet problematic, and thus, terminated the agreement with Mendenhall. The player filed a suit claiming the money that he was supposed to receive, had the contract subsisted. Hanesbrands filed a motion to dismiss the suit, however, it was rejected by the Court on the ground that the opinion of the public about the tweet is quite ambiguous, and thus, it is not clear whether it would fall within the ambit of the morality clause or not.
Further, the companies sometimes even hire a third party to conduct background checks on the athlete’s social media activities before entering into an agreement with him.
One such example is that of Curt Schilling, a former MLB All-Star pitcher and ESPN baseball analyst. He once posted a transphobic photo on his Facebook account which led to the termination of his contract with ESPN. He argued that it was a mere picture and not his personal opinion on transgenders. However, Facebook, being a social media platform, is used by millions of people and the thought process of one person is linked to the thoughts and actions of the other. Therefore, ESPN terminated the contract on the ground that the opinion of Curt Schilling would be linked to that of the company, and thus affecting its goodwill.
Situations like these have led the companies to include such points under morality clauses to prevent athletes from posting their views about certain issues that the companies might find inappropriate, during the term of the contract. Now the question arises whether restrictions like these under morality clauses are reasonable or not.
Are these clauses reasonable
While these clauses are essential for the maintenance of goodwill of the companies, it becomes extremely crucial to decide to what extent are these clauses reasonable. Another major reason for this question is the availability of the right to free speech and expression enshrined under Article 19(1)(a) of the Constitution of India. While the athletes have the right to express their views and opinions, is it valid to consider it against the morals of the companies that they are representing? Therefore, it is essential to draw a line between what can be restricted under the morality clause and what cannot. And, in case, the right to speech is curtailed via a morality clause, then, the reason behind such clause has to be communicated to the athlete so that both the parties can reach to a common understanding with regard to the topic about which the athlete cannot comment upon. This would ensure the reasonableness of the clause on the ground that the athlete’s right to expression will not be completely curbed, and the restrictions would be imposed with the assent of the athlete, so as to avoid the termination of the contract due to stringency of the provisions.
However, on the other side, there are certain people who believe that the activities undertaken by the players during the non-working hours should not be scrutinized by the companies or brands they have an agreement with. In other words, there should not be arbitrary restrictions in the form of morality clauses with respect to the actions of the athletes, which are certainly not a part of their agreement with the brands or companies. Patricia Sanchez Abril, in her paper titled ‘Blurred Boundaries: Social Media Privacy and the Twenty-First-Century Employee‘, says that restricting employees’ right to speech and conduct during the non-working hours is troublesome because it restricts their right to expression and individual autonomy as well as results in a breach of their Right to private life, especially in circumstances where restrictions are placed unilaterally by the employer after the commencement of the employment.
Further, people argue that morality does not have a specific definition. What may be moral to one person, might not be moral to the other person. Therefore, morality is a very subjective term which may completely differ from case to case, depending upon the factors and the thought-process of the parties involved. Hence, imposing restrictions via the morality clause in sports contracts can prove to be problematic because of the unclarity about the concept itself. However, the general definition that is accepted by the courts while dealing with the cases involving the question of morality is the set of behaviour that a person is supposed to adhere to while conducting any activity in the society. Therefore, the Court should determine the real intention of the parties while drafting the morality clause in order to resolve the dispute between them.
Effect of morality clause on Athletes
Morality clauses can definitely take a toll on athletes if they tend to impose restrictions on an extreme level. Restrictions on things, like what a person can post and what he cannot, what he is supposed to and what not, definitely make the athlete more cautious with whatever he/she does because anything can be interpreted wrongly which could land him/her into trouble. Further, the termination of a contract due to the violation of the morality clause can have serious effects on the athletes. If the contract is terminated as a result of the violation of the morality clause, then the other party (the company or the brand) can claim a huge amount of compensation from the athlete. Furthermore, since the athletes earn a lot of money through endorsement, termination of a contract due to the violation of the morality clause can have a severe impact upon his future endorsements. Companies or brands might not be willing to enter into an agreement with an athlete who has a history of non-fulfilment of a contract due to his/her moral behaviour.
Drafting of Morality clauses
Whenever an employer drafts a morality clause in a sports contract, he/she makes sure that the clause is worded in a very broad and general sense so as to increase its scope. This makes it possible for the company to terminate the contract, in case of a situation, which the company thinks is, morally unacceptable by society. However, this is not always fair to the athlete because such broad and general clauses are vague as they lack specificity with regard to the actions which might be considered morally unacceptable or immoral.
Therefore, it is really essential that the morality clause under a sports contract must specifically spell out the objective for the inclusion of the clause and it must be descriptive with regard to the actions that might lead to the termination of the contract. This would ensure that the athlete has a proper idea about the things that could lead to the termination of the contract and would, therefore, avoid wrongful terminations.
One such example of wrongful termination is that of Chris Webber, an NBA player whose contract with FILA was wrongfully terminated on the grounds of violation of the morality clause. The clause stated that the contract would stand terminated if he is convicted in any case. The athlete was arrested at the airport for possessing marijuana. After his contract was terminated, he filed a suit for breach of contract against the company, since the morality clause required conviction for terminating the contract, but he was only arrested and wasn’t convicted. The court ruled in his favour and asked FILA to pay a huge amount of money to Chris for wrongfully terminating his contract.
Further, there needs to be clarity with respect to the use of social media. As stated above, restrictions upon the use of social media with respect to the things that an athlete can post can infringe upon the athlete’s right to speech and expression. However, it, in no way, means giving unfettered discretion to the athlete to post whatever he/she wants, since the goodwill of the company is affected by the actions of the athlete while he is still binding by contractual obligations. Therefore, it is essential to reach a middle ground where neither the goodwill of the company is affected nor the right to speech and expression of the athlete is suffered, thus, serving the interest of both the parties.
Reverse Morality clauses
A Reverse morality clause, as the name suggests, is the reverse of the traditional morality clause or reciprocal of the morality clause, in which the major concern is the interest of the athlete and not the company. The main aim of this clause is to protect the interest of the athlete and to protect him/her from the arbitrary use of the power by the company to terminate the contract by the inclusion of vague points in the morality clause. This clause can be used to specify certain rights that the athlete can enforce if the company tries to revoke the contract via a morality clause. Further, this clause can be used to specify the happenings under which the athlete can terminate the contract and claim damage from the company on termination.
A reverse morality clause becomes more important for the reason that wrongful termination due to a vague morality clause does not only affect the current contract that gets terminated, but it also affects the future endorsements of the athlete with other companies and brands due to the wrong image created due to wrongful termination.
Conclusion
While the inclusion of a morality clause in a sports contract is essential, it is equally important to ensure that it does not curb any right of the athlete. Clarity with respect to the activities which are regarded as immoral and can lead to the termination of the contract is extremely essential in order to make it easier to give effect to the contract. Further, keeping in mind the subjective nature of morality, it is equally important to ensure that morality clause is dealt with subjectively by both the parties so that the interest of both the parties can be secured. The companies endorse athletes in order to increase their goodwill and to attract their followers to the company’s product. Therefore, it is essential that the morality clause fulfils its purpose which is to ensure that the goodwill of the company is upheld without leading to wrongful termination of the contract which can affect the future of the athlete in a wrongful way.
References
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