By: Samantha Chairez
Nowadays, reputation is currency. A single photo, video, comment, accusation, or social media post can change a person’s value overnight. Many companies, brands, and employers understand that idea, which justifies associating themselves with individuals the public likes. To protect their public image, employers often include morality clauses into employment contracts, permitting them to respond to employee conduct that could damage the employer’s reputation. These morality clauses “require an employee to abide by certain ethical standards for the lifespan of the contract with an employer.”[1] If the employee violates the morality clause in their contract, the employer may exercise their discretion in deciding whether or not to terminate the employee.[2]
Morality clauses developed around 1921, with Universal Studios becoming the first to require such clauses in its actors’ contracts.[3] This newfound direction was the result of a murder scandal involving a beloved comedian, Roscoe “Fatty” Arbuckle, employed by Universal.[4] The scandal drew intense and constant press coverage, raising worries it would affect the studio’s box office profits.[5] Although Arbuckle ultimately faced reduced charges, Universal Studios ensured that it inserted “morality” clauses into its standard contracts moving forward.
Now, more than a century after its adoption, morality clauses are the center of attention in the sports and entertainment industry, often appearing in contracts with professional athletes and public figures. Yet, although morality clauses provide a safety net for employers, employees subject to them may find themselves in difficult positions. Many morality clauses contain unclear language, often vague about the organization’s values beyond not being portrayed poorly. This is where the problem lies – the language of morality clauses was written for a different world.
The reliance on such a clause has not accounted for society’s evolution. In the social media age, individuals, especially those largely in the spotlight, share a significant amount of their life with the public. These individuals frequently find themselves in a Catch-22 scenario: their status prompts the public to demand commentary on social issues, but sometimes that commentary can violate the morality clauses in their contracts. “Cancel culture” and social media growth have led employers to rely more heavily on this clause over time to protect their reputations. Yet, uncertainty about what necessarily “harms” an employer’s reputation has left individuals subject to a morality clause in a precarious position, forced to navigate the increasingly blurred line between personal expression and contractual obligations.
A modern-day example of the power of a morality clause is the recent controversy between Neutrogena and the famous late actress Hayden Panettiere, who passed away in August 2026. From 2005 to 2015, Panettiere was a brand ambassador for Neutrogena, having signed on with the global skincare brand as a teenager.[6] Appearing in an episode of Live with Kelly and Michael in 2015, Panettiere opened up about her chronic issue battling postpartum depression.[7] Just a few months before she died, Panettiere spoke about the shock she experienced when Neutrogena “let her contract expire after she publicly admitted to struggling with postpartum depression in 2015.”[8]“Panettiere alleged that while her Neutrogena contract wasn’t immediately terminated, it wasn’t renewed the following year due to violating their “morals clauses.”[9] During this period of time, Panettiere turned to alcohol and opioids to self-medicate. “Of all the things, too, that they would fire me over, this was the last thing I thought they would fire me over,” Panettiere said on the On Purpose podcast.[10]
Upon her death, fans of the actress took to social media and called for a national boycott of Neutrogena.[11] In light of her passing and the undeniable public backlash the brand was experiencing, Neutrogena released a statement in response to Panettiere’s resurfaced comments. Their statement focused on the sadness surrounding Panettiere’s passing, acknowledged her contribution to the brand throughout the decade they worked together, and even emphasized how “proud [they are] to have partner with her and understand that [they] made her feel unsupported during a very difficult time.”[12] Neutrogena has since made it clear that their new initiative following Panettiere’s passing is to make a “‘significant investment to a long-standing community health partner to help give more women access to the support they need, including care for postpartum depression.’”[13] Neutrogena itself acknowledged that “‘Hayden’s courage in sharing her challenges help inspire important conversations and awareness.’”[14]
However, Neutrogena’s newfound accountability calls into question what modern-day morality clauses should look like. As society continues to encourage individuals, particularly public figures, to use their platforms to advocate for social issues and share personal experiences, the boundaries of acceptable conduct have become increasingly difficult to define. Morality clauses must therefore evolve alongside the society they seek to protect, balancing an employer’s legitimate interest in protecting its reputation with an individual’s ability to express themselves and engage in meaningful advocacy. Ultimately, the question remains: where should the line be drawn?
[1] Caroline Hansen, What is a Morality Clauses and How Is It Legal?, U.S. News & World Rep. (Oct. 4, 2023), https://law.usnews.com/ [https://perma.cc/9AUN-X2KC].
[2] Id.
[3] Sally Helppie & Amy E. Mitchell, Off-screen Behavior Matters: Morals Clauses for Performers, SXSW CLE 1, 1 (Mar. 15, 2018), https://www.wslawpc.com/ [https://perma.cc/QDC6-GDUS].
[4] Id.
[5] Id.
[6] Charisma Madarang, Neutrogena Admits It Made Hayden Panettiere Feel ‘Unsupported,’ Stops Short of Apologizing, Rolling Stone (Aug. 20, 2026), https://www.rollingstone.com/ [https://perma.cc/C63X-8AL8].
[7] Id.
[8] Alisha Haridasani Gupta, Neutrogena States It Made Hayden Panettiere “Feel Unsupported”, N.Y. Times (Aug. 24, 2026), https://www.nytimes.com/ [https://perma.cc/U7LM-ENTW].
[9] Madarang, supra note 3.
[10] Id.
[11] Faran Krentcil, Neutrogena’s stock spirals after Hayden Panettiere’s tragic death as fans vow to boycott: ‘I will never buy again’, N.Y. Post (Aug. 18, 2026, at 16:05 ET), https://nypost.com/ [https://perma.cc/E2QZ-39ER].
[12] Lia Beck, The Hayden Panettiere and Neutrogena Controversy, Explained, Cosmopolitan (Aug. 20, 2026), https://www.cosmopolitan.com/ [https://perma.cc/3L4F-N73W].
[13] Id.
[14] Betty Lin-Fisher, Will a Neutrogena boycott by Hayden Panettiere’s fans work?, USA Today (Aug. 20, 2026, at 17:02 ET), https://www.usatoday.com/ [https://perma.cc/JXE5-X6ZG].
