In 2017, PBS suspended Smiley upon allegations of sexual misconduct. As the #MeToo movement gained steam, PBS wished to disassociate itself with a television personality accused of behaving inappropriately toward subordinates. The case then became a rare test of morals clauses. In the 100 years since Hollywood began inserting clauses into contracts that forbid talent from doing anything that would injure reputations, the subject of morals clauses has hardly ever been put to test before a jury.
At trial, PBS presented more than half a dozen women who spoke how they were pressured into relationships or had become the victim of unwanted advances. Smiley insisted the relationships were consensual, and the jury had to consider whether the morals clauses covered the conduct alleged. Adding to the complexity of the case, D.C. Superior Court Judge Yvonne Williams previously ruled that Smiley’s conduct dating years and even decades back was outside the scope of the contract. Nevertheless, the judge allowed the jury to hear from the women given claims that Smiley continued to have a sexual relationship with an executive producer on his show, publicly lied about a 2007 settlement agreement with a female subordinate and appeared on Facebook and ABC’s Good Morning America to defend himself. On the witness stand, Smiley said the women’s stories were filled with “lies.”
The jury also heard from a marketing expert who spoke about PBS’ brand and how accusations against Smiley could tarnish the broadcaster’s wholesome image. In response, Smiley suggested that it was he who had suffered reputational harm from a rash judgment, insinuated that PBS leaked news about the suspension to the media, and brought up other individuals like Charlie Rose who had been associated with PBS and subject to sexual misconduct claims.
Ultimately, PBS scored a big win, and it’s a victory that may bolster morals clauses as a vehicle for companies to get out of contracts upon sexual misconduct claims.
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SOURCE: The Hollywood Reporter – Eriq Gardner