What Is A Morals Clause?

A morals clause generally grants employers the exclusive right to end a contract in the event an employee engages in behavior that may be harmful to the employer's image. Morals clauses are commonly found in employment agreements between companies and high-level executives, or throughout the entertainment industry in many different contexts (e.g., contracts between advertisers, television networks, motion picture studios or endorsees and talent). A morals clause serves to protect a company's investment by (1) deterring talent from engaging in bad behavior, and (2) allowing companies to separate themselves from talent engaged in bad behavior as quickly as possible (and sometimes allowing for return of their investment). Additionally, morals clauses have become a common provision in publishing contracts for authors and illustrators.