An Inherent Contradiction: Corporate Discretion in
Morals Clause Enforcement
Todd J. Clark
TABLE OF CONTENTS
Introduction ...................................................................................... 1
I. Morals Clauses ............................................................................... 10
II. Historical Development of the Implied Obligation
of Good Faith ................................................................................. 22
A. Bad Faith in Contract Negotiation and Formation ................... 27
B. Bad Faith in Raising and Resolving Contract Disputes ........... 28
C. Bad Faith in taking Remedial Action ...................................... 28
D. Bad Faith in Performance and Enforcement ............................ 29
III. Contracts in Violation of Public Policy .......................................... 30
IV. The Rashard Mendenhall Case ....................................................... 32
V. Discretionary Enforcement ............................................................ 37
A. Profit Maximization and Wealth Concentration ...................... 40
B. Lack of Corporate Diversity .................................................... 43
C. Lack of Judicial Diversity ........................................................ 49
VI. The Solution ................................................................................... 51
VII. The First Amendment and Freedom of Speech .............................. 59
Conclusion .............................................................................66
INTRODUCTION
Freedom of expression is a fundamental right in any well-established
democracy.1 This right promotes the free flow of information, thoughts,
Copyright 2017, by TODD CLARK.
Todd J. Clark is a Professor of Law at North Carolina Central University.
First, I would like to thank God for putting me in a positi on to write about and
shed light on issues that I find compelling. I would also like to thank my mother,
Dora L. Clark, my father, Sherwood Hill, and my aunt, Selena Comer for all of
their love and support. Additionally, I would like to thank my son, Jordan K.
2 LOUISIANA LAW REVIEW [Vol. 78
and ideas. Freedom of expression prohibits leaders from manipulating their
power, stifling progress, and eliminating the voice of change. Inherent in the
freedom of the right to express is the right to oppose.2 Expression that goes
against the status quo “serves a vital social function in offsetting or
ameliorating the normal process of bureaucratic decay.”3 It empowers the
citizens of a democratic nation with the means to promote and maintain justice
by challenging majority ideas about fairness, equality, and justice. Through
this exercise,
[a] nation's unity is created through blending individual differences
rather than imposing homogeneity from above; that the ability to
explore fullest range of ideas on a given issue was essential to any
learning process and truth cannot be arrived upon unless all points of
view are first considered; and that by considering free thought,
censorship acts to the detriment of material progress.4
This fundamental right to freedom of expression is threatened by the use
of morals clauses in celebrity endorsement deals. Morals clauses are
contractual provisions that provide corporations with an express, unfettered
right to terminate an athlete or celebrity spokesperson’s endorsement
contract when the endorser acts in a manner deemed socially reprehensible
Clark, for serving as part of my motivation for writing. Hopefully, my writings
and work as a professor will one day inspire him to achieve his greatest potential.
In addition, I would like to tha nk Professor andré douglas pond cummings,
Professor Reggie Mombrun, Professor Grace Wigal, and Professor Mary Wright
for all of the time they dedicated to helping me improve as both a scholar and a
law professor. Anything that I have managed to do well as a member of th e
academy is largely a function of their dedication and vested interest in my success.
I am also grateful to Professor andré douglas pond cummings, Professor Kimberly
Cogdell Granger for reading drafts of my article. I also appreciate the scholarship
grant provided by North Carolina Central School of Law that supported the
production of this article. Finally, I am extremely grat eful for the assi stance
provided by my research assistant Alexis White who worked diligently to help me
organize my citations and to prepare this article for publication.
1. “Congress shall make no law . . . abridging the freedom of speech.” U.S.
CONST. amend. I.
2. RANDAL MARLIN, PROPAGANDA AND T HE ETHICS OF PERSUASION 240–
41 (2002).
3. Thomas I. Emerson, Toward a General Theory of the F irst Amendment,
72 YALE L.J. 877, 884 (1964).
4. See RHONA K. M. SMITH & CHRISTIEN VAN DEN ANKER, THE ESSENTIALS
OF HUMAN RIGHTS 127 (2005) (discussing one of the earliest defenses advanced
by John Milton, English Poet and political writer, in favor of freedom of speech
in his work, “Areopagitica”).
2017] AN INHERENT CONTRADICTION 3
by corporate leadership.5 Such provisions typically are included in
standard endorsement contracts and give the corporation wide latitude to
cancel the agreement upon an act by the celebrity spokesperson perceived
as detrimental to the corporation’s brand and image.6
Providing corporations with such broad discretion impairs social
progress because morals clauses can stifle thought-provoking and change-
oriented speech. The very essence of the First Amendment is subjugated to
a meaningless idea of grandeur because modern-day corporations now have
an unbridled right to temper speech in the private context through the use
of broadly drafted morals clauses. This reality is inherently dangerous
because a corporation has the right to regulate or restrict speech based
upon its assessment of how society will view the endorser’s expression.
This idea fundamentally is flawed for several reasons. First, given that
corporations are driven primarily by profit maximization, it is unnatural to
assign to them moral authority. Second, because white Americans—
specifically, white American males—occupy the overwhelming majority
of corporate leadership, the initial determination about what conduct is
morally reprehensible will be made by a homogenous group of people who
often views the world from a uniform perspective. Third, if morality is
determined by calculating what the majority of the spending population
thinks,7 then such a determination will favor white Americans’
conceptions of morality because the majority of wealth in the United States
5. Fernando Pinguelo & Tim Cedrone, Mora ls? Who Cares About Mora ls?
An Examination of Mora ls Clauses in Talent Contra cts and What Talent Needs to
Know, 19 SETON HALL J. SPORTS 348, 351 (2009).
6. Id.
7. See, e.g., Toni Lester, “Finding the ‘Public’ in ‘Public Disrepute” –
Would the Cultural Defense Make a Difference in C elebrity and Sports
Endorsement Contr act Disputes? - The Case of Michael Vick and Adrian
Peterson, 6 PACE INTELL. PROP. SPORTS & ENT. L.F. 21 (2016) (explaining that
conceptions of morality often ar e influenced by racial and cultural factors as
evidenced by an ESPN poll that reflected that 57% of black Americans believed
that the media is biased against black athletes while o nly seven percent of white
Americans held the sa me belief. The poll further reflected that black people
believe that “the media unfairly criticizes black athletes more than white athletes,
while the white fans suggest there is no difference in the media's handling of
various cases.”); see also Jennifer Agiesta, CNN poll: Americans split on anthem
protests, CNN (Sept. 30, 2017, 2:29 AM), http://www.cnn.com/2017/09/29/politics
/national-anthem-nfl-cnn-poll/index.html (highlighting a poll that found that 59%
of whites said that kneeling during the National Anthem is wrong, whereas 82% of
blacks said that it's the right thing to do) [https://perma.cc/9TQT-X65V].