Canadian Musician - November/December 2018 | Page 62

BUSINESS
Lindsay Bailey is an art and entertainment lawyer jointly based in Vancouver and Austin. She has a diverse practice, working with
clients across the music, new media, visual arts, fashion, and film & TV industries and enjoys transactional and related work where
these areas converge for her clients. Lindsay is a registered trademark agent in Canada and is registered to appear before the
USPTO for her clients. www.lblc.co.
Melissa Arseniuk is an Articling Student at LBLC | Lindsay Bailey Law Corporation. She received her JD at the University of Ottawa,
where her studies and legal research focused on technology, privacy, and entertainment law. Prior to law school, Melissa was a
By Catherine Glazer
journalist whose work appeared in Rolling Stone, the Washington Post, People, and the National Post, among others.
By Lindsay Bailey & Melissa Arseniuk
W
Morals Clauses
here is the entertainment
industry heading in the
post-Ghomeshi, post-Wein-
stein age of #MeToo? It is
still very much TBD. The
only thing that’s for sure is that the industry is
evolving, and big changes are on the horizon
for artists and the network of promoters,
agents, managers, labels, festivals, investors,
and brands that work with them.
One thing all parties can expect to see more
of is what is currently referred to as the “morals
clause” in contracts.
What Is a Morals Clause?
Despite its rather puritanical-sounding name,
a “morals clause” isn’t a prudish covenant
prohibiting premarital sex or same sex relation-
ships. Instead, a morals clause typically allows a
contracting party (a record label, management
company, TV network, etc.) to terminate its
contract with an individual or group (singer,
band, producer, etc.) if the contracted talent
does something that could damage their
reputation, or the reputation of the company
that is hiring them. In other words, a morals
clause can allow a label to drop an artist who
gets “me-too’d,” and can permit a band to
drop their manager if the latter is indicted à la
Harvey Weinstein.
While morals clauses aren’t entirely new – Uni-
versal Studios first used them in artist contracts in
the 1920s – entertainment law experts anticipate
morals clauses will be increasingly common as
parties look to protect themselves in cases where,
for example, a headliner is accused of sexual mis-
conduct in the days leading up to a performance
which, in turn, forces the promoter to refund tick-
ets and replace the headliner with another act.
Morals clauses can protect against offensive
situations both vague and specific. For example,
a situation that “justifiably shocks, insults, or of-
fends a significant portion of the community” is
rather ambiguous, while “a misdemeanor of mor-
al turpitude that is punishable by a prison term
of at least six months” is quite rigidly defined.
Indeed, all morals clauses are not created
equal, but a good one requires both finesse and
balance. It can’t be so vague that it is impossible
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to define, but also, it shouldn’t be so specific that
its effectiveness is limited to a specific set of of-
fending behaviours and nothing else.
The stakes are high for artists who are asked
to sign contracts with these terms, and the stakes
are just as high for contracting parties who might
need to rely on morals clauses in the future. A
good entertainment attorney can help tailor a
morals clause that balances the interests of both
parties for the particular context – one that is
not so vague that an artist has her record deal
terminated over a topless photo, but also specific
enough to ensure a festival isn’t on the line for a
main stage act whose front man just wound up
in the news for all the wrong reasons.
In Practice
Drafting a morals clause requires careful
consideration of many factors, including: what
(if any) objective facts trigger the clause; how
subjective the triggering factors might be;
whether the mere potential to bring harm
or actual harm is required; which violations
or transgressions are covered; and what the
actual process, consequences, and remedies
might be (among many other factors).
While the American entertainment and me-
dia industries have had no shortage of allega-
tions and charges in this first year of the #MeToo
movement, recent events have demonstrated
that the Canadian entertainment industry is far
from innocent when it comes to sexual miscon-
duct. The trial of Jian Ghomeshi shocked the na-
tion and started an important discussion. That
conversation intensified last fall when allegations
were made (and charges were since laid) against
Hedley frontman Jacob Hoggard. In Hoggard’s
case, his band was dropped by both its manage-
ment and booking agencies, and in Ghomeshi’s
case, he lost his job, agents, and book publisher,
and the act that he managed dropped him.
South of the border, the festival circuit recent-
ly witnessed two instances where the founders
of high-profile festivals were unceremonious-
ly ousted over sexual misconduct allegations.
The founder of Los Angeles-based festival FYF,
Sean Carlson, was removed in November 2017
after four women, including at least one artist
manager and one music photographer, came
forward with allegations of sexual misconduct.
More recently, the creditors of Houston-based
Day for Night Festival “deemed it appropriate”
to deliberately force the festival into foreclosure
after three women, including a nightlife pho-
tographer and a former employee, voiced sex-
ual misconduct allegations against the festival’s
founder, Omar Afra.
Reverse Clauses & Mutual Morals Clauses
Morals clauses needn’t only be a one-way
street. Reverse clauses empower the contract-
ed talent to terminate their contract if the
company they’ve entered into an agreement
with does anything that might tarnish the
talent’s reputation or appeal. Similarly, mutual
morals clauses can protect both parties’ inter-
ests vis-à-vis the impact each party’s conduct
may have on the other’s image and reputation.
Reverse clauses date back to Pat Boone’s 1968
oral agreement with Bill Cosby’s Tetragrammaton
label, which allowed Boone to unilaterally ter-
minate the relationship if the label did anything
that could harm Boone’s religious image and up-
right reputation. Reverse clauses were also used
by the Houston Astros when the organization
needed to change the name of what was then
Enron Field. More recently, savvy celebs like The
Weeknd have used reverse clauses to protect the
integrity of their personal brand while leveraging
it to endorse another brand.
Morals clauses aren’t the industry standard –
yet – but they serve an important purpose:
they allow parties to weigh their options in
times of crisis, and offer the option of terminat-
ing a contract if that turns out to be the best
course of action. A morals clause doesn’t mean
a contract will absolutely be terminated at the
first sign of trouble; instead, it allows parties
to establish in advance the terms on which a
termination may be appropriate to get out of a
bad situation without facing full consequences
for another party’s unexpected and potentially
damaging behaviour.
The views and opinions expressed in this article
are not meant to substitute for legal advice, which
should be sought in each particular instance.