The Reverse-Morals Clause: The Unique Way to Save Talent’s Reputation and Money in a New Era of Corporate Crimes And Scandals

Abstract

The Article begins in Part I with an examination of how the traditional morals clause begat the reverse-morals clause. We briefly trace the history of morals clauses and how they evolved into the first reverse-morals clause in 1968 with Hollywood celebrity Pat Boone. Next, in Part II the Article analyzes the heightened need for talent brand protection in perilous and uncertain economic times and explores the likelihood that the “Great Recession of 2008-2009”32 and beyond will bring additional damage to talent reputation in endorsement deals. Indeed, talent has good reason to fear that a future Enron or Bear Stearns might be lurking across the endorsement negotiation table. Offering a due diligence checklist for talent in prudently vetting endorsement deals with companies, Part III raises a few red flags. Special attention is given to the dubious reputation red flags that celebrity golfer Vijay Singh faced in his recent endorsement deal with Stanford Financial Group and its CEO, Sir Allen Stanford. Examination will also include some intriguing corporate reputation research on whether illegal corporate behavior can actually be predicted in the context of due diligence. Part IV investigates what talent needs to know about reverse-morals clauses from talent’s standing to demand such a clause, to innovative negotiation, draftsmanship, and enforcement tips. These negotiation and draftsmanship suggestions seek to build “equal protection” into the endorsement contract. In creative fashion, Part IV predicts the likely impact Twitter and other similar real-time disseminators of “news” will have on reverse-morals clauses. We examine how Twitter might impact the negotiation of future traditional morals clauses and reverse-morals clauses. Part V concludes the article, bringing the reader full circle and re-emphasizing the relevance of reverse-morals clauses in today's universe of endorsement contracts and talent agreements. While the reverse-morals clause may seem a bit obscure today, including one in talent agreements may quickly become the prudent course of action for those seeking to secure protection against corporate crimes and misdeeds. Thus, the importance of the clauses should not be underestimated, and it is against this backdrop that we begin our analysis into the origins and characteristics of the reverse-morals clause.