Nova Law Review Volume 43, Issue 2 2019 Article 5 Punishing Bad Actors: The Expansion of Morals Clauses in Hollywood Entertainment Contracts in the Wake of the #MeToo Movement Jihad Sheikha∗ ∗Nova Southeastern University Shepard Broad College of Law, [email protected] Copyright c 2019 by the authors. Nova Law Review is produced by The Berkeley Electronic Press (bepress). https://nsuworks.nova.edu/nlr Sheikha: Punishing Bad Actors: The Expansion of Morals Clauses in Hollywoo PUNISHING BAD ACTORS:THE EXPANSIONOFMORALS CLAUSES IN HOLLYWOOD ENTERTAINMENT CONTRACTSIN THE WAKEOFTHE #METOO MOVEMENT JIHAD SHEIKHA* I. INTRODUCTION............................................................................... 204 II. ABRIEF OVERVIEWOFMORALS CLAUSES ................................... 206 A. Morals Clauses Defined.................................................... 206 1. Negotiating Morality............................................ 206 2. Terminationand Defenses ................................... 208 B. ABrief Historyofthe Morals Clause ............................... 209 1. TheOriginofthe Morals Clause ......................... 210 2. TheClauses Confront Communism..................... 211 3. TheModernMoralsClause................................. 214 III. THE #METOO MOVEMENT............................................................. 214 IV.#METOO’S EFFECTONHOLLYWOOD’S TALENTAND FINANCES .. 218 A. Weinstein’sTermination................................................... 218 B. Spacey’s Termination........................................................ 220 C. LouisC.K.’sTermination.................................................. 221 D. Analysis............................................................................. 222 V. #METOO MAKES A CHANGE:HOW THE MOVEMENT IS CHANGING HOLLYWOOD DEAL-MAKING BY BROADENING THE LANGUAGEOF MORALS CLAUSES ......................................................................... 223 VI.THE NEW MORALS CLAUSES ARE HERETOSTAY ........................ 225 A. Broad Morals Clauses AreNothing New..........................225 B. BroaderMoralsClauses Will Be Used as Originally Intended ............................................................................ 226 C. BroaderMoralsClauses Will Be Upheld in Court........... 227 D. BroaderMoralsClauses Make Sense............................... 230 VII. CONCLUSION.................................................................................. 231 *Jihad Sheikhaearnedhis bachelor’s degree in Political Sciencewith a minor in PsychologyatFlorida Atlantic University.Heiscurrently aJuris Doctor Candidate forMay 2020 at Nova SoutheasternUniversity, ShepardBroad College of Law. Jihadwould firstliketothank hismother, father,and threesistersfor theircontinuedsupport throughout hislaw school career.Hewouldalsoliketothank hisfriends,colleagues, andother peers whosediscussions helped sparkthisComment’stopic.Jihad is also grateful forthe time and energy spentbyhis fellowcolleaguesofNova LawReview,Volume43, in editing this Comment. Lastly,Jihad wouldliketoacknowledgethe prosecutors andstaff of theSexual Battery andChild AbuseUnitatthe BrowardCountyStateAttorney’s Office in helping representvictims of sexual assault andfor theircontinuedworkingivingavoicetothe voiceless andprotectingthose whocannotprotect themselves. Published by NSUWorks, 2019 1 Nova Law Review, Vol. 43, Iss. 2 [2019], Art. 5 204 NOVA LAWREVIEW [Vol.43 I. INTRODUCTION Nothingseems to sell astory more than agood scandal.1 Thesiren callofcelebrity gossip managestolurethe everyday JoeShmoe andJane Doeintoclicking thelatest TMZ articleorvideo on theirsocialmedia feed, pickingupacrumpled US Weekly at thedoctor’soffice, or forthe more open-minded, flipping throughthe NationalEnquirer to investigatethe latest appearance of BigFoot.2 “Our appetitefor celebrity gossipis...insatiable” andweparticularlycrave twothings: Fame and bad news.3 That is whyitis no surprise that thebombshell of #MeToo took theworld by storminlate 2017.4 The#MeToo movement generated storyafter storyofthe career- ending malfeasance committed by our most belovedcelebrities andpublic figures, in addition to reportsofthe steepfinancial consequences enduredby Hollywood’sstudios,productioncompanies, anddistributors.5 Soon, amere social mediahashtaginstilled fear into theheartsofprominent male celebrities once thought to be untouchable.6 Theupperechelon of Hollywood took noticeand scrambledfor ameans to distance themselves from toxic talent and terminate their existing contracts.7 However, absent breaching acontract illegally, many Hollywood companiesdid nothavethe legal means to end these agreements and, subsequently, lost millions of dollars.8 As asolutiontotheir woes, Hollywood is now consideringthe morals clause,aheavily-negotiatedprovision in atalentagreementthat allows forthe terminationofsaidagreement undercertain circumstances.9 Theconsideration of morals clausesinthe wake of the#MeToo movement is not asurprise.10 Thesecontractual provisions have become 1. DanaDovey, RumorHas It:The ScienceBehindWhy We Love Celebrity Gossipand TabloidMagazines,MED.DAILY (Nov.24, 2015, 9:00 AM), http://www.medicaldaily.com/rumor-has-it-science-behind-why-we-love-celebrity-gossip- and-tabloid-magazines-362710. 2. Seeid. 3. Id. 4. Seeid.;Regan Morris, Is #MeToo Changing Hollywood?,BBC: NEWS (Mar.3,2018),http://www.bbc.com/news/world-us-canada-43219531. 5. See TatianaSiegel, #MeToo Hits MovieDeals:Studios Race to Add Morality Clauses to Contracts,HOLLYWOOD REP.(Feb. 7, 2018, 6:50AM), http://www.hollywoodreporter.com/node/1082563. 6. See Morris, supra note 4; Kyle Smith, AMaleBacklashAgainst#MeToo Is Brewing,N.Y POST (Feb.3,2018,2:43PM),http://www.nypost.com/2018/02/03/a-male- backlash-against-metoo-is-brewing/. 7. See Siegel, supra note 5. 8. Seeid. 9. Id. 10. See StephenM.Gallagher,Note, Who’sReally Winning?: TheTension of Morals Clauses in Film andTelevision,16VA.SPORTS &ENT.L.J.88, 88 (2016) (discussing thestandardnatureofmoralsclauses in theentertainment industry). https://nsuworks.nova.edu/nlr/vol43/iss2/5 2 Sheikha: Punishing Bad Actors: The Expansion of Morals Clauses in Hollywoo 2019] PUNISHINGBAD ACTORS 205 standard practice in advertising, motionpictures, and television agreements andare generallyupheld by thecourts.11 “Morals clausesgive[an]employer ...the right to terminateatalent [contract]”ifthe talent failstoconduct himselfaccordingtothe moralstandardsofsociety,thereby tarnishinghis ownreputationand thereputationofhis employer.12 Forexample,acontract could have amoralsclauseallowingfor thetermination of theagreementin theevent that thehired talent is convictedofadrug offense.13 Upon the talent’s conviction,the morals clause is triggeredand thetalent’semployer hasthe righttoterminate thecontract.14 In themidst of countless celebrityaccusations of sexualimpropriety, morals clausesseem to be an effectivetool Hollywood can usetocombat negativepublicity generatedbytoxictalentwho have lost theirstatusand, most importantly,their value.15 In light of therecentwaveofsexual assault allegationsthatrockedHollywood, studios andproduction companiesplanto usemoralsclauses more oftenand broadentheir language to accountfor possibleaccusations of sexualassault andviolencecommittedbytheir talent.16 By includinglanguagethatallowsfor theterminationofatalent agreement if allegationsofsexualmisconduct come to light,Hollywood studioscan effectivelymitigatepotential financiallosses associated with theseaccusations.17 However, some fear that broadermoralsclauses that are triggered upon mere accusations setabadprecedent forthe industry because they couldbeused unfairlyorevenbeabused by studios andproduction companies.18 This Commentwill addressthese concernsand others that ariseout of theuse of broaderand more expansive morals clauses.19 In addition to defining themoralsclauses andidentifying itscomponents, this Comment will explorethe historical evolutionofmoralsclauses from the1920s up to themodern era.20 This Comment will also provideuseful background 11. Id.;NoahB.Kressler, Note, Using theMoralsClauseinTalent Agreements:AHistorical, Legal andPractical Guide,29COLUM.J.L.&ARTS 235,235 (2005). 12. Gallagher, supra note10, at 88. 13. Kressler, supra note 11, at 245–46. 14. Id. 15. Seeid. at 244(discussing thevalue of morals clauses in thetelevisionand motionpicture industry);Gallagher, supra note 10,at90. 16. See Natalie Robehmed, TheMorality Clause:How #MeToo Is Changing Hollywood Dealmaking,FORBES (Mar.29, 2018,11:22 AM), http://www.forbes.com/sites/natalierobehmed/2018/03/29/the-morality-clause-how-metoo-is- changing-hollywood-dealmaking. 17. Id. 18. Id. 19. See discussion infra Part II–IV. 20. See discussion infra Part II. Published by NSUWorks, 2019 3 Nova Law Review, Vol. 43, Iss. 2 [2019], Art. 5 206 NOVA LAWREVIEW [Vol.43 informationofthe #MeToo movement andits effectsonHollywood by providingin-depthcasestudies on theHarveyWeinstein,Kevin Spacey,and LouisC.K.allegations that ledtotheir pariah status in theentertainment industry andcosttheir employersmillionsofdollars.21 Ultimately, this Comment’s propositionisthatweshouldhavelittleconcernoverbroader morals clauses because they areinessence very similartopastmorals clauses that were upheld by thecourts, will likely notbeabused,and will facilitate thenecessary shiftinculturalnorms in Hollywood by shedding light on theepidemicofworkplace sexualharassment and assault.22 II. ABRIEF OVERVIEWOFMORALS CLAUSES A. Morals Clauses Defined In contract law, morals clauses arecontractual provisions that give theemployerthe