In Zigomanis v. 2156775 Ontario Inc. (D'Angelo Brands), 2018 ONCA 116, the Ontario Court of Appeal upheld a lower court decision that a professional hockey player's nude selfies did not offend public morals and decency and there was thus no basis to terminate a promotional contract.
Facts
In May 2011, D'Angelo Brands ("D'Angelo") entered into a promotional contract with professional hockey player Michael Zigomanis, who was on a two-way contract with the Toronto Maple Leafs. D'Angelo agreed to pay Zigomanis $200,000 over four years to serve as a brand ambassador and promote its energy drink, Cheetah Power Surge.
The promotional contract contained a "morals clause" under which D'Angelo could terminate the contract if the "athlete [were to] commit ... any act which shocks, insults or offends the community, or which has the effect of ridiculing public morals and decency".
In the fall of 2011, Zigomanis learned that two nude photos were circulating the Internet. He had sent the photos to his then girlfriend prior to entering into the contract with D'Angelo. The photos generated media coverage.
D'Angelo terminated the promotional contract under the "morals clause". The company alleged, in part, that the photo scandal undermined Zigomanis' positive image as a brand ambassador. Zigomanis sued for wrongful termination of the contract.
Decision
The lower court judge held that D'Angelo breached the contract. First, the court held that the morals clause was not violated by the private transmission of nude photographs during a relationship. Second and in any event, the court found that the photos were taken and sent prior to entry into the promotional contract and the morals clause was not retrospective. The court awarded $162,500 as damages for breach of contract.
The Court of Appeal upheld the lower court's decision, finding that the community conscience would not be "shocked" by such photos. In the view of the appeal court, the lower court's finding was:
... rooted, appropriately, in the timeless human practice of sharing intimate information within relationships, the inherent expectation of privacy when doing so, and the public policy reflected in recent legislation protecting the privacy of such communications in the Internet age.
D'Angelo was ordered to pay the costs of the appeal.
Lessons for Employers
While this decision focuses on a promotional contract, it contains important lessons for employers dealing with employee off-duty conduct.
- High threshold for policing employee off-duty conduct: Generally, an employer cannot dictate employee behaviour outside of business hours. To discipline an employee for off-duty conduct, the key factors to consider are: 1) the nature of the conduct; 2) the employee's employment duties; and 3) the nature of the employer's business. To discipline an employee or terminate employment for just cause, the employee's conduct must be egregious, render him or her unable to perform his or her duties satisfactorily, and seriously and negatively impact the employer's reputation.
- Do not jump to conclusions: Carefully consider about what is "offensive" and do not make rash termination decisions. What one individual might find personally shocking may not shock the community at large. Take a step back and consider whether the behaviour is actually harmful to the company's reputation.
- Do your due diligence: The threshold for policing employee off-duty conduct is high, and it is even higher when an employer attempts to discipline an employee for conduct which occurred before he or she was actually hired. If an employer is concerned about reputation, consider a more intensive interview and reference check process when hiring to screen out potentially unsavoury characters.
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