Labor
Logic
Employment
contract morals clauses
By
John D. Finerty, Jr.
Special to Wisconsin Law Journal
August
9, 2006
 |
| John
D. Finerty, Jr.
|
When
Mel Gibson was arrested in Malibu, California for drunk driving, and went on an
anti-Semitic tirade, studio executives in Hollywood likely cringed. Then, they
undoubtedly pulled out their contracts with Gibson to read the fine print in the
search for some clause that would let them out of the relationship. One possibility
would be a “morals clause” that allows termination of a contract if
an employee engages in morally offensive conduct or does something to damage the
reputation of the employer.
Employees
don’t like morals clauses because they are open to interpretation; thus,
these clauses have fallen out of favor in Hollywood. They are, however, still
standard fair in television, advertising and endorsement deals. For example, Chanel
terminated its contract with Kate Moss when the model was photographed allegedly
snorting cocaine; ABC terminated Michael Nader from the soap opera “All My
Children” after a 2001 cocaine arrest.
The
following are a few issues to consider when negotiating employment contracts,
independent contractor, endorsement or advertising contracts, that contain a morals
clause.
Contracts
and Collective Bargaining Agreements
When
ABC fired Michael Nader, he sued on a number of theories. His primary claim was
breach of contract. Nader was also a union member covered by the Screen Actors’
Guild’s collective bargaining agreement.
Nader
argued the morals clause in his contract was overly broad. In an unpublished decision,
the Second Circuit held in Nader v. ABC Television, Inc., that “morals clauses
have long been held valid and enforceable.” This is also the law in California.
See Lowe’s, Inc. v. Cole, 185 F.2d 641 (9th Cir. 1950).
Disability
Issue
Nader
also sued ABC for disability discrimination under the Americans with Disabilities
Act. This theory was two-fold: he was an alcoholic and thus disabled; and, he
had previously sought treatment for drug and alcohol addiction and the ADA protected
him as “disabled.”
These
arguments were rejected. Others have tried the same arguments in Wisconsin courts
and also lost. See Despears v. Milwaukee County, 63 F.3d 635 (7th Cir. 1995).
State
Law Statutory Issues
Wisconsin
law creates protections for employees that transcend and may invalidate contractual
provisions to the contrary. For example, Wisconsin prohibits discrimination on
the basis of the use or non-use of a lawful product. See Wis. Stat. Sec. 111.35.
The
statute originally applied to protect cigarette smokers from discrimination in
the workplace, but may also extend to those who drink beer or other alcohol on
non-work time, provided they do not become impaired. Mel Gibson’s alcohol
use may fall into this category; his anti-Semitic tirade and drunk driving offense,
do not.
Wisconsin
also prohibits discrimination on the basis of an arrest or conviction record.
See Wis. Stats. Sec. 111.321. That is, an individual cannot be terminated or refused
employment because he or she has been arrested or has a record of conviction.
Employers may, however, terminate employment based on the underlying conduct of
the employee without regard to whether or not the employee was arrested.
In
Gibson’s case, his offensive conduct was the anti-Semitic remarks he made
to the Los Angeles County Sheriff Deputy. Although he was arrested for drunk driving,
news reports of the incident indicated his remarks are not the subject of criminal
charges, nor was he arrested for them. The arrest records statute would, therefore,
not apply.
Sample
Contract Provision
The
following is an example of a morals clause used in an employment contract in a
published case. Employers considering such a clause, however, should be aware
that most entertainment industry collective bargaining agreements prohibit such
clauses and most lawyers representing employees object.
“The
employee agrees to conduct himself with due regard to public conventions and morals,
and agrees that he will not do or commit any act or thing that will tend to degrade
him in society or bring him into public hatred, contempt, scorn or ridicule, or
that will tend to shock, insult or offend the community or ridicule public morals
or decency, or prejudice the producer or the motion picture, theatrical or radio
industry in general.” See Noah B. Kressler, Using the Morals Clause in Talent
Agreements: A Historical, Legal and Practical Guide, COL. J. OF LAW AND THE ARTS,
235, 236 (2005) (citing Lowe’s, Inc. v. Cole, 185 F.2d 641, 645 (9th Cir.
1950)).
For
more information on this topic, contact John D. Finerty, Jr. at Michael Best &
Friedrich LLP at (414) 225-8269 or on the Internet at JDFinerty@
michaelbest.com.
