Morality Clauses, Part II: The Family Law Edition

When couples divorce, often the most difficult part is how the children are affected by the process and the behavior of the divorcing parents.  No one wants someone else raising their children.  However, that can be a very harsh reality to face for divorced people with minor children. 

Previously in this space, we looked at employment contracts for executives and high visibility employees or representatives, and how a company can manage the risk of illegal or otherwise improper behavior of those key persons.  With some foresight, and smart contractual drafting, the company can protect itself from bad behavior through morality clauses.   

Surprisingly, this very same issue - guarding against the poor judgment of others - appears in many, many divorce cases, particularly when there are minor children and custody issues involved. These issues can have a profound impact on many people, regardless of social status, wealth, religion or any other demographic category.

Even the most amicable divorce matter can be psychologically and emotionally challenging at times.  More often than not, those challenges can become extreme when mixed with the financial pressures that divorcing couples also face.  Add to that the difficulty of navigating custody issues, and the parties’ differing perceptions of what is in the child’s best interest, and you have a powder keg waiting for ignition.  Eventually, more often than not, this issue explodes into conflict.

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Morality Clauses & Employment Agreements: What Employers Need to Know

Employers take risks every day with the people that the company hires - including top level managers and CEOs.  So do brands and sports teams when they hire spokespeople or athletes on multi-year, multi-million dollar contracts.  Anytime there are significant dollars committed to a single person over a long period of time, real risk exists.  

One of the most impactful traits of the people you hire is their moral character.  This is especially true when the person you hire is your spokesperson, or your chief executive, or otherwise is the face of your organization.  One of the most impactful tools you have to control your contractual relationships are called morality clauses.

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Copyright Law Update: All About Fair Use

(The following is an excerpt from my book risk, create, change: a survival guide for startups & creators, now available here at Amazon.com.)

    One of the key doctrines of copyright law is the concept of fair use.  Fair Use is, simply stated, a defense to a copyright infringement claim.  This doctrine allows for, in certain, limited circumstances, the unlicensed use of copyrighted works. 

    The Copyright Act provides provides the statutory framework for determining whether something is a fair use and identifies certain types of uses—such as criticism, comment, news reporting, teaching, scholarship, and research—as examples of activities that may qualify as fair use. 

    Generally speaking, only a federal court after a copyright infringement case has been filed can really determine if one’s actions in using a copyrighted work constitutes Fair Use and is thus permissible.  From a startup or entrepreneur’s standpoint, if you are in the educational space or publishing space involving artistic criticism, Fair Use becomes a significant debate at the office.  For the purposes of this paragraph, “publishing” could include not only the written word but also video blogging and related content production. 

    There are four factors that courts will consider in determining if the unlicensed use of a copyrighted work constitutes Fair Use:

  1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
  2. the nature of the copyrighted work;
  3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
  4. the effect of the use upon the potential market for or value of the copyrighted work.

    Since Fair Use is such a generally applicable topic, it bears some additional explanation.  The first factor in the fair use analysis focuses on what the purpose and character of the use is, including whether the use is of a commercial nature or is for nonprofit educational purposes.  A key part of the analysis here is how the party claiming Fair Use is using the copyrighted work.  Courts are much more likely to find that nonprofit organizations using copyrighted material for educational and noncommercial uses qualify as Fair Use.   One should not automatically assume, however, that all nonprofit education and noncommercial uses are automatically fair and all commercial uses are not fair.  This first factor is only part of the four part analysis, and it is the court’s analysis of all of the factors as a whole that will determine the outcome.

    “Transformative” uses are more likely than not to be considered fair.   Transformative uses are those that add something new, furthering the purpose of the original work or imbuing the original work with a different character.

    The second factor focuses on the nature of the copyrighted work.  This can be a slippery concept.  The analysis here is the degree to which the copyrighted work that was used relates to the overarching purpose of copyright law in encouraging creative expression.  In other words, when someone uses a copyrighted work that is a novel, movie or song - all forms of creative expression - that person is less likely to be entitled to argue the Fair Use doctrine.  If the copyrighted work was a news story or a technical article, the it is more likely that Fair Use could be found in that circumstance.

    The third factor focuses on the amount and substantiality of the portion used in relation to the copyrighted work as a whole.  In short, how much of the copyrighted work was used?  Here courts would look at both the quantity and quality of the copyrighted material that was used.  Not surprisingly, the larger the portion of the copyrighted work used, the less likely it will be that Fair Use will be found.  Also, the converse is also true.  The smaller amount of the copyrighted work used, the more likely that a court would determine Fair Use was applicable in the situation.  In some contexts, using even a small amount of a copyrighted work was determined not to be fair because the selection was an essential part—or the “heart”—of the work.

    The fourth and final part of the Fair Use analysis focuses on the effect of the use upon the potential market for or value of the copyrighted work.  Does the use harm the copyright holder’s asset?  The court would have to examine the existing or future market for the copyright owner’s original work. Does the use  harm the copyright owner by displacing sales of the original owner’s work that would have happened but for the infringing user’s activities? This is probably the last place on earth where you would want the monetary value of your property to be determined, especially if your work is avant garde or there is no clearly established market (yet) for your product.  

Have questions about your creative work and copyright law?  CONTACT US.