Mendenhall and HanesBrands, Inc.

Unpublished. Part of a series developed for The W. A. Franke College of Business.

Summary: In the wake of the September 11, 2001 attacks on the Pentagon and the World Trade Center, professional football player Rashard Mendenhall posted several tweets about the amount of unknown information. In 2011, after Osama bin Laden was killed, Mendenhall tweeted criticisms that the whole story still was untold. Mendenhall’s endorsement contract with Champion Sportswear included a morals clause and the company had to determine whether or not to terminate the contract.

Topic Areas: Business, Communication, and Mass Media

The Rashard Mendenhall/HanesBrands, Inc. Twitter Case

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This case is based on a real situation between athlete Rashard Mendenhall and clothes manufacturer HanesBrands, Inc. The lawsuit that resulted from the situation was settled out of court in a confidential settlement. Cases may settle out of court for a number of reasons – the parties do not want the expense of a lawsuit, the parties are uncertain of their likelihood of success, the parties want to avoid any potential negative publicity associated with the situation, etc. Because this case was settled out of court with a confidential settlement, we truly do not know who might have won the lawsuit. There is no real indication of admission of wrongdoing. As such, this case is a good case for discussing the ethical aspects of the decision.

 

Rashard Mendenhall

In April 2008, Rashard Mendenhall was drafted by the Pittsburgh Steelers as the 23^rd overall pick in the first round.[1] He was the first running back drafted in the first two rounds by Pittsburgh in nearly 20 years. Mendenhall was 5’10” and 225 pounds and ran a 4.41 in the 40-yard dash. While playing for the University of Illinois, Mendenhall ran for 1,681 yards and averaged 6.4 yards per carry for his final season. He appears as the number 55 highest-ranked career leader for rushing yards per attempt.[2]

He played for the Steelers from 2008 until 2012 when he was suspended for not showing up to a game.[3] After leaving Pittsburgh, he played for the Arizona Cardinals for one season (including playing in the 2009 Superbowl where Arizona nearly beat Pittsburgh) before retiring from football at the age of 26. He currently lives in California and is a writer and director.[4]

 

HanesBrands, Inc.

HanesBrands is an international apparel company with several of the top-selling brands, including Hanes, Champion, Playtex, Bali, Maidenform, JMS/Just My Size, Wonderbra, and Gear for Sports.[5] The company sells bras, panties, shapewear, sheer hosiery, men’s underwear, children’s underwear, socks, T-shirts, sweatshirts, fleece, and other activewear. Champion was founded in 1919 and is the second largest of the brands owned by HanesBrands. Hanes is a Maryland corporation with its principal place of business in Winston-Salem, N.C. Hanes is a member of the S&P 500 and is on the Fortune 500 list. The company has approximately 65,300 employees in more than 40 countries.

 

The Interaction

While Mendenhall was playing for the Pittsburgh Steelers, he signed a contract with HanesBrands, Inc. to endorse their Champion Sportswear products.[6] The original contract had a clause that stated that if Mendenhall was “arrested for and charged with” or convicted of any felony or crime of moral turpitude, HanesBrand could terminate the contract. His original 3-year contract was extended in 2010 for four more years by HanesBrands, Inc. The extension specifically stated that Mendenhall could, or would, use social media to comment on NFL, Champion brand and “off-the-field” issues.[7] It also included a revised morals clause that prohibited Mendenhall from engaging in any actions that would bring him “into public disrepute, contempt scandal or ridicule, or tending to shock, insult or offend a majority of the consuming public.”[8]

Mendenhall, who had a Twitter account, was often vocal about his position on everything from parenting to international affairs. After the September 11, 2001 attacks, Mendenhall tweeted, “We’ll never know what really happened.” And after the death of Osama bin Laden in 2011, he tweeted, “What kind of person celebrates death? It’s amazing how people can HATE a man they have never even heard speak. We’ve only heard one side.” These comments made headlines.

 

The Question

Participants may be placed in the position of a decision maker at HanesBrands, Inc. to determine how to handle the situation. Given the language of the “morals” clause, it is unclear whether Mendenhall’s actions would trigger the ability to terminate. As such, HanesBrands must assess Mendenhall’s actions and determine an ethical response.

 

The Epilogue

Within 48 hours of the bin Laden tweet, HanesBrands terminated the contract. Mendenhall filed a $1,000,000 lawsuit against HanesBrands, claiming breach of contract. His specific claim is that the morals clause was too broad and ambiguous and should only be in effect for “tangible faults” like criminal convictions and could not be used to stifle free speech. The case was settled out of court with a confidential settlement agreement.