INTRODUCTION
A Morality Clause in an agreement is a simple provision that lists down a set of acts or activities which should not be committed or indulged into by the parties to the agreement, failing in which the endorsement agreement would be terminated. The clause is an effective tool to protect the image and goodwill of the organization, while also enabling the organization to unilaterally terminate the contract for violation of a code of conduct that tarnishes the image of the organization. The professional career of Sportspersons or Athletes in the area of sports is quite uncertain and low in terms of other people who pursue a different career. Due to this, these Sportspersons and Athletes work really hard to perform and be part of a team which can be any professional club or for a national team. Therefore, the remunerations are high to an average professional career. Moreover, sportspersons also sign various endorsements or sponsorship deals with big brands and organizations to get extra revenue to utilise such funds for further future investments in any form. It might happen that an athlete engages in some prohibited activities that they are not supposed to do, thereby creating a negative image not only for themselves but also for the associated brand or organization, 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 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.
SPORTS AND MORALITY CLAUSE
In the Sports Industry, the first morality clause was applied in the agreement between the New York Yankees and the baseball legend Babe Ruth. The morality clause in the agreement was drafted as:
“The Player must keep himself in the first-class physical condition and must at all times conform his personal conduct to standards of good citizenship and good sportsmanship.”[ii]
It further stated: “It is understood and agreed by and between the parties hereto that the regulation above set forth…shall be construed to mean among other things, that the player shall at all times during the term of his contract…refrain and abstain entirely from the use of intoxicating liquors and that he shall not during the training and playing season in each year stay up later than 10’ clock A.M. on any day without the permission and consent of the Club’s manager, and it is understood and agreed that if at any time during the period of this contract, whether in the playing season or not, the player shall indulge in intoxicating liquors or be guilty of any action or misbehaviour which may render him unfit to perform the services to be performed by him hereunder, the Club may cancel and terminate this contract and retain as the property of the Club, any sums of money withheld from the player’s salary as above provided.” This clause turned out to be a game-changer for endorsement deals and has turned out to be one of the most sought safeguards used by brands and organization in order to reduce their exposure in case of any wanted situation in an endorsement deal. However, like every legal tool, there needs to be a proper study of the scope and application of this clause.
NEED FOR MORALITY CLAUSES IN SPORTS CONTRACT
High-value contracts with popular athletes usually result in a huge rise in sales for the company; however, it has to ensure that the behaviour and personality of the athlete remain on the positive side as he is the face with whom the public relates the brand to. Alexander Pope in his poem “An Essay on Criticism” introduced one of the most popular quotes on human behaviour when he stated that “To err is Human”. This quote is the closest one has ever come to perfectly explain human behaviour. Morality clauses are inducted into the players’ agreement for the same purpose as these Sports-persons are humans who make mistakes that are bound to be highlighted in the public forum.
Due to the constant media attention and enormous fan base, sports professions have attained the status of celebrities and are paid a great sum of money for endorsing brands and products. This monetary gain can be seen as a reward for the years of training and hard work that these athletes undergo. However, sometimes due to this sudden fame and flow of money, some sportspersons go off track from their moral grounds and are found to be in indulging in immoral and illegal activities. In such a scenario, having a morality clause in their agreement can help the brands to reduce their exposure from the tarnish that the athlete’s image goes faces.
This risk factor results in the broad terms within the morality clause empowering the company to terminate the endorsement agreement under unfavourable situations. However, the athletes’ agents and lawyers fight for simple, strict and unambiguous provisions in morality to prevent the termination of their client based on explicit language and terms mentioned in the contract.[v]
Morality Clauses have gained popularity and importance in the modern world with the rise in social media platforms and engagements of these sportspersons on the same. With the rapid rise in forms of social media platforms as well as forms of engagements, the speed of information distribution has imposed a much strict and enhanced scrutiny of the personal life and views of the talented athletes, thereby making morality clauses more applicable to sports contract.[vi]
REASONABLENESS OF MORALITY CLAUSES IN SPORTS CONTRACT
The induction of Morality Clauses in players’ agreement in order to maintain the goodwill of brands and organization is no doubt an essential aspect but it should be done without infringing the athlete’s rights. In case a restriction is imposed over the right to speech or expression via a morality clause, then a reasonable and appropriate explanation for the same has to be communicated to the athlete so that there exists a common understanding not only with respect to the induction of the morality clause but also 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 curbed, and the restrictions would be imposed with the consent and knowledge of the athlete.
The second issue that needs to be dealt with is whether the application of the morality clause in non-working hours is reasonable or not. This is one shortcoming of the morality clause as it imposes arbitrary restrictions upon the actions of the athletes, which are certainly not a part of their agreement with the brands or companies. Restricting an athlete’s right to speech and conduct during non-working hours is unreasonable in nature as it restricts their right to expression and individual autonomy as well as results in a breach of their privacy, especially when the morality clause involves restrictions placed by the employer after the commencement of the employment.[viii]Such provisions where even non-field activities are covered under the morality clause are frowned upon by the players as not only do these clauses call for strict scrutiny of their personal lives but also actively exploit their privacy.
It needs to be understood that morality has not been defined anywhere and is a very subjective concept as Moral to one person can be Immoral to another, depending upon the factors and the ideology of the parties involved. The subjectivity of an act is moral or not can prove o problematic when it comes to imposing restrictions via the morality clause in sports contracts. The courts have in various situation defined morality as a set of behaviour that a person is supposed to adhere to while conducting any activity in society. Therefore, given the widespread nature of the concept of morality, the court should interpret the real intention of the parties while they were drafting the morality clause as well as the spirit of law and justice while considering and determining whether a morality clause is fair or not.
EFFECT OF MORALITY CLAUSE ON SPORTS-PERSONS
Sports-Persons usually do not prefer morality clauses in their contract, when these clauses impose strict as well unreasonable (if any) restrictions upon their rights to speech and expression as well as unwanted scrutiny of their personal lives. Restrictions on things, like what a celebrity athlete can post and what he cannot, what he is supposed to and whatnot, definitely make the athlete more cautious with whatever he/she does because anything can be interpreted wrongly by the general public and cost him/her contract.
Moreover, termination of contracts due to violation of the morality clause has a detrimental effect on the performance of sportspersons as this kind of constant scrutiny results in a detrimental effect on their self-confidence and send-esteem. Furthermore, morality clauses also lay down provisions for compensation to be paid by the athlete if claimed by the company or brand, in case the contract is terminated as a result of a violation of the morality clause.
It has to be noted that since a major chunk of an athlete’s revenue includes revenue generated through endorsement fees, termination of a contract due to breach of morality clause can have a severe adverse impact not only on the income of the sports-persons but also on future prospects of getting endorsement offers. Brands will avoid entering into contracts with a sports-person who might have a history of non-fulfilment of moral behaviour, disregarding the nature of the clause or the seriousness or extent of violation committed by the sportsperson.
REVERSE MORALITY CLAUSES
Morality clauses have always used a safeguard against the acts of the athlete rather than the brand he/she is associated with. However, in case the agreement involves well-renounced or successful sports-persons, the morality clauses are usually unambiguous and direct in nature with no loopholes. Another safeguard available to such well known and successful athletes is the tool of Specific Moral Clause or Reciprocal Moral Clause. These clauses help the athlete to terminate an endorsement agreement if the brand is engaged in fraud or some other illegal activities.[ix]
Such clauses will help the sportspersons or athletes to avoid such premature termination of contract due to the veil of the moral clause. Such a veil further gave more negotiation power to the sportsperson/ athletes.[x]
INDIAN SPORTS ENCOUNTER WITH MORALITY CLAUSE
INDIAN PREMIER LEAGUE SPOT-FIXING SCANDAL
Indian Premier League, a mega sports event that is considered to be the cash-cow for the Board of Control for Cricket in India has been a great source of homegrown talent. Unfortunately, bad luck struck the mega event when in 2013; a sting operation uncovered a spot-fixing scandal and declared three Indian sports-persons to be involved in unethical practices which were in violation of principles and guidelines laid down by the Board of Control for Cricket in India and International Cricket Council.[xv]
This unfortunate incident resulted in the title sponsor of that edition of the Indian Premier League, “Pepsi” to trigger their moral clause and terminate the sponsorship deal with the league. The dysfunctional Pune Warriors also terminated their participation due to disagreement with league administration and unethical issues of spot-fixing committed in the league.[xvi]
THE MOHAMMED SHAMI CONTROVERSY
Mohammad Shami came into the limelight for the wrong reasons, when his estranged wife Hasin Jahan levelled charges of domestic violence and adultery against him, along with allegations of match-fixing and corruption. Shami faced strict scrutiny from the Anti-Corruption Unit of the Board of Control for Cricket in India as well as from the Kolkata Police on the domestic violence allegations. The series of events resulted in the demotion of Shami being awarded the “Grade B” contract by the Board of Control for Cricket in India from the predicted “Grade A” category even though the Anti-Corruption Unit exonerated him of match-fixing.
Although matters were sorted on the Board of Control for Cricket in India front, the charges of domestic violence brought his contract with the Delhi Daredevils (now, Delhi Capitals) was affected the most. The team management referred to the disrepute clause in Shami’s contract thereby resulting in him being released by the team ahead of the 2019 edition of the league.[xvii]
Though given the gravity of the allegations levelled against him, this decision remains perplexing and doesn’t place the Delhi Daredevils in a good light. This action remains an issue of debate when it comes to the application of the morality clause in Indian sports and did not place the Delhi Franchise in a good light.
CONCLUSION
While companies continue to spend huge amounts of funds on athletes to work with or represent them, they will look for greater contractual protection to protect the interests of all stakeholders involved. Along with these contractual protections, companies may consider creative approaches like involving more than a single athlete as the face for a campaign in order to dilute or reduce the risk and exposure to the brand/employee in case of any violation of the moral clause. It is a universal fact that brands and companies will go to any extent to protect their goodwill and brand image. It is unlikely that the morality clauses will cease to exist and the clauses will only become stricter and include analytical tests for analyzing and detecting vague morality clauses to allow a robust and fair mechanism for framing endorsement contracts between brands and sports-persons. Brands need to draft these clauses carefully, keeping in mind the principles of the organization as well as the behaviour and conduct of the sportspersons on and off-field.
Although the inclusion of a morality clause in a sports contract is essential, it should be framed keeping in mind that there should not be unreasonable limitations or restrictions imposed to curb the rights of an athlete. Moreover, morality is a subjective concept that needs to be dealt with and discussed by both parties keeping the interests of both parties in mind. It is essential that the morality clause fulfils the purpose of its induction in the contract which is to ensure the protection and maintenance of goodwill of the company without leading to any form of wrongful termination of the contract which can affect the future of the athlete wrongfully.
[i] Fernando M. Pinguelo and Timothy D. Cedrone, Morals? Who Cares About Morals? An Examination of Morals Clauses in Talent Contracts and What Talent Needs to Know, 19 SETON HALL J. SPORTS & ENT. L. 347, 351 (2009).
[ii] Schwartz, D., The Uniform Baseball Contract is an Employment Contract like few others. CONNECTICUT EMPLOYMENT LAW BLOG. (Mar. 27, 2021, 9:49 PM),
[iii] Kamenetsky, C., The Need for Strict Morality Clauses in Endorsement Contracts, 7 PACE. INTELL. PROP. SPORTS & ENT. L.F. 289 (2017).
[iv] Todd J. Clark, An Inherent Contradiction: Corporate Discretion in Morals Clause Enforcement, 78 LA. L.REV. (2018).
[v] Darren Rovell, Nike Cuts Ties with Manny Pacquiao after Derogatory Comments, ESPN (Mar. 18, 2021, 5:31 PM), http://espn.go.com/boxing/story/_/id/14793389/nike-ends-endorsement-contract-manny-pacquiao.
[vi]Supra note 1.
[vii] Leopoldus, B., How to Structure Morality Clauses for your Pro Athlete Clients, LEGAL INK MAGAZINE, (Mar. 1, 2021, 5:54 PM) http://www.legalinkmagazine.com/2015/05/structure-morality-clauses-pro-athlete-clients.
[viii] Sanchez Abril, Blurred Boundaries: Social Media Privacy and the Twenty-First-Century Employee, 49 ABA 124 (2012).
[ix] Findlay, H., You Can’t Do or Say That: Constraining Individual Conduct in a Public and Commercial World, LAWNOW, (Mar. 15, 2:51 PM), https://www.lawnow.org/you-cant-do-or-say-that/.
[x] Andrew Zarriello, A Call to the Bullpen: Alternatives to the Morality Clause as Endorsement Companies’ Main Protection Against Athletic Scandal, 56 B.C.L. Rev., 389 (2015)
[xi] Roshan Gopalkrishna, The Anatomy Of An Endorsement Agreement, THE SPORTS LAW & POLICY CENTRE (Mar. 13, 2021 6:50 PM), https://sportslaw.in/home/2013/09/25/the-anatomy-of-an-endorsement-agreement/
[xii] Brian Steinberg and Maureen Tkacik, Should Brands Endorsed by Bryant Keep Him On?, THE WALL STREET JOURNAL, (Mar. 1, 2021, 7:13 PM)
[xiii] Robert Freeman, Morals Clause for Multimedia Products Incorporating Celebrity Likeness, LAW.COM (Mar. 2, 2021, 5:58 PM), https://www.law.com/almID/900005533999/?slreturn=20210224071931
[xiv] Liz Mullen, Morals Clause Give Companies an Out, SPORTS BUSINESS JOURNAL (Mar.5, 2021, 10:17 PM), https://www.sportsbusinessjournal.com/Journal/Issues/2003/08/11/Marketingsponsorship/Morals-Clauses-Give-Companies-An-Out.aspx
[xv] Ritesh Misra, Ethical Issues in the Gentleman’s Game, 2 LIB. STU. JOU., 15 (2017)
[xvi] Id
[xvii] Angad Singh, Morally Speaking – Are morality clauses an unfair bargain for elite athletes?, NATION OF SPORTS (Mar.19, 2021, 4:53 PM) https://www.nationofsport.com/breakdown/morality-clause
LAWBEES 