Morality Clauses in Employment Contracts | Considerations for Sporting Organisations

athlete crouching at the starting line with phone

February 7, 2022

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For as long as there has been competitive sport, athletes have found themselves as public role models. With this comes the opportunity for some to leverage their profile and earn income from the many brands and companies that like to align their brands with fit, successful, prominent and up-and-coming athletes. Combine that with the explosion of social media in recent years, and the lives of our athletes have become more accessible than ever before. 

Whether through joining a new platform or an increase of public awareness, athletes can grow a considerable online following. Sometimes strategic, but often inadvertently, up-and-coming semi-pro and professional athletes can quickly become some of the most followed social media influencers on these platforms. This puts them in the perfect position to advertise the lifestyles and behaviours that their clubs and sponsors stand for, and wish to have portrayed to the public.


Morality Clauses in Employment Contracts 


Due to the ever-increasing public nature of the ‘private’ lives of athletes, disrepute, morals or morality clauses in employment contracts which allow sporting clubs, associations or sponsors to suspend athletes or terminate contracts for off-field or out-of-hours misconduct are more important than ever. For this reason, pro and semi-pro sporting clubs or organisations need to be up-to-date about best practices when including morality clauses in any athlete contracts. 

Offers and negotiations can fall through if the clauses are too constrictive. Generally speaking, the aim is typically to strike a balance between upholding the values and expectations of your club or organisation (and sponsors), while also giving your athletes some flexibility and freedoms.


What is a morality clause?


A morality clause is a provision in an employment contract which gives an organisation the right to suspend or terminate a contract if the employee commits specific prohibited behaviour. They may also be known as disrepute clauses or morals clauses.

Morality clauses can be drafted more or less broadly to encompass a wide-range of misconduct or misbehaviour by athletes and employees. Broadly speaking, a morality clause in an athlete’s employment or sponsorship contract provides that if the athlete is found to partake in actions that bring themselves, the club, organisation, and their sponsors into disrepute, the club, organisation or sponsor has the right to suspend or terminate the contract.


Athlete Conduct and the relevance of contractual drafting


In 2018, three Australian cricketers, including the Australian captain Steve Smith, were suspended for their on-field conduct in bringing the game into disrepute. However, it is not only on-field conduct that can cause concern for sporting associations, teams and sponsors. In late 2021, Test captain Tim Paine resigned as captain and stood down from the team following the revelation in the media that he had previously been involved in a sexting scandal. While Paine made his own decision to step-down to prevent further harm to his family, Cricket Australia came under significant scrutiny for its earlier decision to not punish Paine and to appoint him as captain given its earlier knowledge of the incident. Notably, the Cricket Australia Code of Conduct refers to sexual misconduct as conduct that may fall within the Code of Conduct offence 2.23, which is a catch-all provision for conduct, including conduct that brings the game of cricket into disrepute. It therefore may have been arguable that his conduct was in breach of the Code of Conduct. 

You will remember when, back in 2019, rugby player Israel Folau publicly posted a series of anti-same-sex marriage and homophobic statements to his social media profiles. This led to Qantas (who have a very strong public promotion of LGBTQI+ rights), threatening to pull their sponsorship to Rugby Australia if they failed to terminate his contract. He was found to have breached Rugby Australia’s code of conduct, which contained a disrepute clause. Ultimately, Rugby Australia terminated his contract early, consequently ending his career with the Waratahs and the Wallabies. He lost his sponsorship deal with ASICS later that month. 

In Zubkov v FINA the Court of Arbitration for Sport (CAS) found that under the relevant FINA (governing body for world swimming) contract in that case, for Zubkov to have breached the relevant morality clause, it was necessary to show that his conduct had caused actual (not just potential) damage to the reputation of the sport of swimming (not just to himself). As this could not be shown, his six-year suspension was subsequently dramatically reduced to an eight-month suspension. 

This can be contrasted with the case of Australian Swimmer Nick D’Arcy under a different contract. In 2008, D’Arcy set an Australian 200 m butterfly record and gained a spot on the Australian Swimming Olympic team. He was then charged with assault following a brawl with fellow swimmer, Simon Cowley. Importantly, the wording in the contract between Nick D’Arcy and the Australian Olympic Committee (AOC) stated that any action he took to bring himself, the team, the AOC or Swimming Australia into disrepute would be sufficient for the AOC to suspend or terminate his contract. Consequently, despite charges not yet being finalised, the Australian Olympic Committee dropped D’Arcy from the 2008 Beijing Olympic squad on the basis that he had brought himself into disrepute. On appeal, CAS upheld the decision, finding that in the contract, “bringing a person into disrepute is to lower the reputation of a person in the eyes of ordinary members of the public to a significant extent”. It found that his actions were sufficient to affect his reputation amongst ordinary members of the public. 

In the NRL, players can also be stood down for serious criminal conduct while awaiting trial. A controversial No-Fault Stand Down clause was first introduced by the Australian Rugby League Commission and the NRL in March 2019. The policy has been repeatedly subjected to legal challenge. However, on each occasion it was found to be fair. The policy meant that Dragons player Jack de Belin, who was charged with sexual assault, spent over two seasons on the sidelines until charges were ultimately dropped and he was allowed to return to playing. 

More recently, in October 2021, an AFL club took a similar approach to that adopted by the NRL in relation to AFL football player Jordan De Goey. De Goey, a star forward at the Collingwood Football Club, with a checkered history of incidents, was arrested in New York and charged with assault. Although De Goey was not due to stand trial until 8 December 2021 (and this was later adjourned to January 2022), his club suspended him following the incident. The suspension meant that he was prevented from using club facilities and resources, and was banned from playing and training with the club. On 20 January 2022 he was allowed to return to the club after accepting a plea deal for harassment in the second degree (a downgraded charge) offered by the prosecution. 

In the event any athlete’s conduct is under investigation, or in the event they are required to go to Court, your club or organisation wants to ensure that it has avenues available to manage issues like these, effectively.


Sports Contract Negotiations


When entering into sports contract negotiations, the obvious mindset to have is to protect the interests of your club or organisation, and your sponsors. Being able to stand down an athlete in the event their behaviour is under investigation or due to go to trial or a tribunal, is important for both pro and semi-pro clubs and organisations.

The public knowledge of any behaviour that is under investigation, can challenge the perceived integrity of a club, organisation, and its sponsors, so adequate provisions must be made to ensure you have an enforceable morality clause.

However, these clauses should do more than minimise the risks or protect the public image of your organisation. It is equally essential to show that you are caring and considerate of your athletes, their lives, and their futures.

If your club or organisation includes clauses that are too harsh on the players, it will find that it is scrutinised in the public domain for being unjust. Conversely, if it words the clauses too softly, it could find itself under fire for not caring about potential victims or the consequences that the players’ disreputable actions have caused for others. You may even find the organisation subjected to legal challenge where it has taken steps such as suspension or termination if the contract does not provide a sufficient basis for doing so. This may result in costly litigation or legal settlements. 

It is for all of these reasons that your club or organisation should have athletes’ contracts prepared by experienced employment lawyers who understand the nuances of sports contract negotiations and the considerations unique to sporting clubs and organisations. 


Considerations for Organisations with Pro or Semi-pro Athletes


Some of the questions we ask here as sports and employment lawyers include:


  • Are they a high-profile professionally paid athlete? 
  • Are they a semi-professional athlete? 
  • Are they likely to be a leader of the club/organisation in future? 
  • What does your club or organisation consider disreputable conduct?
  • What might be considered disreputable conduct in the future (during the term of their contract)?
  • Should players be punished for conduct that remains confidential, but that has the potential to cause disrepute should it later become public knowledge?
  • Could their position within the club or team change during the course of the contract, and therefore their position of responsibility change whilst bound under this contract?
  • Will you include a No-Fault Stand Down clause?

Morality Clauses in Employment Contracts


There is no one-size-fits-all approach to morality clauses in employment contracts for athletes. The considerations for any employment contract with a morality clause varies greatly, depending on the level your athletes are at, the level of public scrutiny and any sponsorship obligations you have. Be too specific with your wording, and you might narrow it down too much and find yourself in a position with no ground to stand on. Too broad and you might be too restrictive on the athlete in question based on what level of their career they are at, or in extreme cases the clause may even be unenforceable.

Could your club or organisation have tighter morality clauses in athletes’ contracts? When it’s time to review or renew your athlete contracts or sign-on new talent, the best chance of striking the right balance is to seek professional advice from lawyers who specialise in sports and employment law.


Article by Alexandria Anthony


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Our team of sports lawyers work with clubs and organisations across all states and territories of Australia. To discuss morality clauses in employment contracts, call our Sports Lawyer team on 03 9642 0435 or fill in our contact form here.