On November 18, Shahin Rothermel was interviewed by Ad Age for the article “How morality clauses are changing in era of influencer deals and polarizing politics.” The following is an excerpt:
But enforcing a morality clause can get messy and lead to bigger, public problems. Experts say there are certain steps that brands and their partners should take to ensure they are prepared for the unexpected—and mitigate harm to both their finances and their reputation.
"You can’t sleep on it. News cycles go so quickly; if someone gets canceled in a week and you stood by them, you’ll take a hit on sales and reputation in those first few days." Shahin Rothermel, partner, Venable
How morality clauses started
The origins of the morality clause date back to the 1920s and a silent film star named Roscoe “Fatty” Arbuckle. Shortly after signing a multi-year deal with Paramount Pictures, Arbuckle landed in jail, accused of killing a woman at a party. Though he was acquitted, the damage to his reputation was severe. Paramount, as a partner, suffered the consequences as well. The incident caused other film studios to begin to include their own protective terms in actor contracts moving forward. Over time, such clauses extended beyond Hollywood to any brand deals.
“Back in the day, morality clauses weren’t standard,” said Shahin Rothermel, partner at Venable. “They started to become more standard as we saw more controversies come out,” she added, noting sexual crimes, racist statements, or similar immoral behavior. “Brands got skittish and rightfully so.”
Due diligence is critical
There are certain best practices that experts advise both brands and partners to follow when drafting contracts. Before even considering an influencer, athlete or celebrity, marketers must do their due diligence and research the person. This means vetting recent activity and social posts but also going back in time. Brands should look at how potential partners behaved in college and during their younger years, as well as how they acted during big moments such as election years. The last example is crucial as brands try to avoid stepping into the landmine of political controversy.
“A lot of it can be discovered through due diligence on the front end,” said Rothermel. “That can make it so these morality clauses never need to be invoked at all.”
For the full article, click here.