Marketers and their PR firms typically make sure to include morals and non-disparagement clauses in their celebrity endorsement contracts. Social media has led to an increasing variety of ways celebrity endorsers can commit public acts that may reflect badly on or embarrass a brand. Some recent situations strongly suggest that marketers and their agencies would be wise to review and revise the termination provisions in most celebrity endorsement contracts.
A decade or so ago, pop star Britney Spears was seen in public drinking Coca-Cola at the same time she was under contract as a celebrity endorser for Pepsi, which soon found a different spokesperson. More recently, Helena Bonham Carter and cosmetics company Yardley ended their contractual relationship after the actress mentioned publicly that she did not wear makeup.
Morals clauses, non-disparagement provisions, and other protective language marketers include in contracts with celebrities typically permit them to insist on a business divorce in a wide range of situations. Already, reports suggest marketers have been cutting back on spots starring South African Olympic athlete and double-amputee Oscar Pistorius following his arrest and indictment in connection with his girlfriend's death. Similarly, the issues Lance Armstrong has had with marketers since he admitted using performance-enhancing drugs and the subsequent sponsorship losses are well documented.
The prevalence of social media has added another layer to this. Today's celebrity endorsers are typically given “positions” such as “brand ambassador” or “creative director.” As such, they are often obligated to engage with consumers on behalf of the brand in all forms of media. Given the fluidity and instantaneous nature of social media, it is vital for marketers and PR firms to consider how to strengthen existing protective clauses with the celebrity to account for these potential mishaps.
This might be particularly appropriate due to the instantaneous worldwide exposure that celebrity activities, large and small, can obtain through Twitter, Facebook, and other social media tools. The most recent example involved Alicia Keys, who tweeted about her position as BlackBerry's newly appointed endorser and “global creative director” from an iPhone.
From a brand protection standpoint, the companies employing these “ambassadors” certainly want them to reach out to consumers on social media platforms. By the same token, marketers need to ensure they are protected should a “mishap” by a celebrity reflect badly on the brand or its endorser. Tweeting on a brand's behalf from a competitive product that is disclosed to the public, as Keys did, is typically not a violation of the contract's morals clause, or even a violation of a traditional non-disparagement clause.
Of course, marketers are probably not going to seek to end celebrity contracts for every mis-tweet or troublesome Facebook picture. In fact, doing so might well create a bigger story and PR issue than the tweet itself. Nonetheless, marketers and PR firms should strengthen their celebrity endorsement obligation language and termination clauses in a manner that addresses social media platforms and these kinds of situations.
Celebrities no doubt will attempt to limit the marketer's termination rights to wrongful acts, such as being arrested for committing a felony or certain other crimes. Limiting a marketer's termination rights this narrowly would leave them with very limited protection in the face of what can be damaging incidents for their brands. Marketers should ensure that each celebrity endorser is required to use in public only the marketer's product – making sure to define “use in public” as one that occurs in public, as well as a use that becomes public, is known to the public, or that is publicized through social media or otherwise.
Taken a step further, it is not unreasonable for marketers to seek the right to terminate an endorsement contract for various acts, in social media or otherwise, that might tend to injure the success of the brand or its products or services. After all, the damage to a brand that stems from seeing its well-known celebrity spokesperson publicly use its competitor – which is an inarguable from of endorsement – can be just as severe, if not more so, than incidents of questionable or criminal behavior.
Michael Lasky is a senior partner at the law firm of Davis & Gilbert LLP, where he heads the PR practice group and co-chairs the litigation department. He can be reached at firstname.lastname@example.org