Online brand protection must be taken into consideration, particularly when faced with changing consumer behavior, market uncertainty and rampant misinformation. Social influencers with large audiences that value their opinions on consumer products and health regimes are a valuable tool for companies and governments looking to reach large online communities quickly. However, some influencers have been using the COVID-19 pandemic to push their own personal agendas or products or otherwise to provide questionable medical advice. These toxic influencers can cause real and lasting damage to any brand.
One simple and effective way to protect your company’s brand online is to ensure influencer relationships include the appropriate contractual clauses that will allow your company to exit a toxic relationship or head off any unpleasant media headed your way.
Include a Morality Clause into Influencer Marketing Contracts
Morality clauses allow for the unilateral termination of an agreement should a contracting party engage in reprehensible behavior that may negatively impact its public image and by association, your company’s brand. Morality clauses are adaptable to the specific market realities of the endorsement sought. Companies should consider the following to ensure the morality clause serves their purpose:
- Make the conduct of the contracting party whose endorsement is sought a material condition of the agreement;
- Consider including disclosure provisions requiring disclosure of past conduct that can materially affect a contracting party’s online reputation and by extension, your brand;
- Consider an ongoing disclosure obligation regarding any incident during the contractual relationship that could materially affect a contracting party’s reputation and by extension, your brand;
- Define what acts would be contrary to your brand’s image and outline specific events that will trigger the morality clause;
- Consider whether acts are necessary (and if so, what evidence would be needed) to trigger the morality clause or if allegations of conduct would be sufficient;
- Consider whether the trigger should be results oriented, such as requiring damage to the individual’s public reputation or whether commission of the act, even in confidence and without the public’s knowledge, would be sufficient to trigger the clause;
- Consider including provisions that either limit the clause to actions committed by the contracting party or expand the provision so actions by third parties that would have a material effect on the value of the endorsement would also be covered by the clause (see for example Zigomanis v. 2156775 Ontario Inc. (D’Angelo Brands), 2018 ONCA 116 (CanLII));
- Consider outlining your rights if the clause is triggered as termination of the agreement may not be sufficient to stem the collateral damage to your brand;
- Include a liquidated damages clause, if appropriate and if damages to the brand would be difficult to quantify; and
- Elect a jurisdiction and governing law in the event of litigation surrounding enforcement of the clause.
Once a morality clause is in place, measures should be taken to ensure monitoring of the social influencer’s online activities and promotions and the public’s response, keeping in mind that public morals can change over time. Provide for the possibility to amend the clause to conform to changes in what may trigger public outrage. Under normal circumstances, influencers posting travel pictures would usually go unnoticed, but posting travel pictures amid current COVID-19 travel bans may not be well received by the public. In a similar vein, posting pictures of or live streaming from a large social gathering may not be well received by the public amidst government-imposed social-distancing measures.
Influencers can be a valuable marketing force. Be sure to choose influencers whose online image and conduct lines up with your brand and company values. As with any contractual relationship, providing clear guidelines as to your marketing expectations can make the difference between a good and great influencer relationship. Guidelines given to social influencers can and should be updated as world events occur and business circumstances change.
For questions or support in matters regarding marketing practices and online brand protection, please do not hesitate to contact us.
For more information on the legal implications of COVID-19, please consult our COVID-19 Hub. As a full service global firm with offices across Canada, Norton Rose Fulbright is closely monitoring this evolving situation over a number of practice areas including employment and labour, risk advisory, intellectual property, banking and finance, corporate, M&A and securities, and dispute resolution and litigation, and across a variety of industries including retail, energy, infrastructure, mining and commodities, financial institutions, life sciences and healthcare, technology and innovation, and transport.