Morality Clauses

Morals clauses give teams, leagues, and companies the right to terminate, suspend, or punish an athlete for engaging in criminal behaviour or conduct that may negatively impact his or her public image and by association, the public image of the team, league, or company.  Each of the four major team sports leagues in North America include morals clauses in standard player contracts in their collective bargaining agreements.

In addition, endorsement contracts between players and corporations also typically include morals clauses.  A carefully drafted moral clause has become increasingly necessary for corporations and teams.  They invest invest so much into players performance and reputation and conduct away from the playing field can have a significant economic impact.

Adrian Peterson, Michael Vick, Kobe Bryant, Tiger Woods, Lance Armstrong, Oscar Pistorius.  What do they all have in common?

Yes, they used to be the top athletes in their respective sports but all have been terminated from endorsements because of morality clauses.  Wheaties ended their contract with Peterson after the child abuse accusations, Nike terminated Vick's contract when he was convicted of Dog fighting, Bryant lost endorsements because of his sexual assault allegations, Woods was dropped by Gillette because of his affairs tarnished his perfect image, Armstrong used performance enhancing drugs and Nike, Oakley, and Trek terminated their contracts with him, and lastly Oscar Pistorius lost his endorsements with Nike and Oakley after the murder of his wife.  Companies can pursue litigation against the athlete if they invoke the morals clause.

When negotiating morals clauses in endorsements, one of the most important issues is what kind of behaviour will trigger the clause.  Many kinds of criminal behaviour can be included in morals clauses such as criminal convictions, public fights, arrests for drunk driving, drug use, criminal accusations (even if charges are dropped), and even actions that aren't criminal but tarnish an image such as an affair, and doping.  Top athletes gain a large source of income from endorsements and companies spend large sums so they want to limit the risk.

However, not only athletes can cross the moral line.  After the Donald Sterling incident, owners, coaches, and even companies can be immoral too and hurt the athletes image.  An athlete could include a reverse morals clause in his contract, permitting him to terminate the relationship with an owner, coach, or endorsement organization. For example in 2001, Enron filed for bankruptcy, and the Houston Astros who gave Enron the naming rights to their stadium (Enron Field) had to buy Enron out.  The Astros didn't want to be associated with Enron after thousands of Houston people lost their jobs.  A reverse morals clause could have saved the franchise millions.


In order for reverse morals clauses to be included in player contracts they would have to be negotiated into the Collective Bargaining Agreement.  Player Associations have many other priorities to worry about such as insurance, benefits, and wages which is why reverse morality clauses have yet to be negotiated in major league sports.