After months of sexual harassment reports, Hollywood begins to lay the foundation for more rigorous morality clauses and corporate codes of ethics.

How does Hollywood adjust to the revelations brought on by the #MeToo movement? That’s been the question on many people’s minds (ours included) for months now. In the wake of so many hard truths, audiences have watched as a number of high-profile projects have come undone due to the misdeeds of their stars and producers. One big part of the conversation has focused on corporate accountability; as noted in a piece from October at Fortune, companies need to create a culture that fosters honesty and consequences in equal measure. This accountability has recently become intertwined with the financial considerations that drive Hollywood: earlier this week, Tatiana Siegel wrote an article for The Hollywood Reporter wherein she spoke to insiders about the trend towards morality clauses in contracts. While messy, these clauses — and the legal language that enforce them — may provide another important framework for Hollywood pieces.

The irony, of course, is that morality clauses got their start in Hollywood. The landmark case involving morality clauses took place in 1921, when comedian and movie star Fatty Arbuckle was arrested on rape and murder charges. You can find an excellent overview of how this event informed entertainment law in the NYU Journal of Intellectual Property and Entertainment Law (JIPEL); although Arbuckle was eventually acquitted — historians have never clearly established his guilt or innocence in the decades since the incident — Hollywood studios took note of the public fallout and began to include morality clauses in their contracts. In the decades since, we’ve seen countless actors, musicians, athletes, and more run afoul of their company’s internal code of contact and lose money and endorsement deals as a result.

That brings us to the current point in time. For many studio executives, the most important thing is that Hollywood figure out a clearcut way to hold people financially accountable for their actions. How do you adjust to audiences that give past actions equal weight in their decision to see or not see a film? In her article, Siegel notes that bond companies “do not currently address the potential of a key figure negatively impacting a film because of a sex scandal,” leaving some insiders to wonder if there is a golden opportunity for insurance providers to create a new category of insurance meant to combat sexual abuse and harassment charges. Siegel even includes language from one film distributor that punishes individuals who violate the company’s morality clause “prior to, during, or after” their services are rendered.

It should come as no surprise that a sizable cross-section of The Hollywood Reporter‘s commenters are rather unenthused with this tactic. Celebrities are uniquely positioned to be recipients of false accusations, they say. Why should careers be ruined because of a potential false claim? Never mind the fact that these same people often argue against diversity hires in Hollywood, maintaining that the entertainment industry is a free market when the best talent and ideas simply rise to the top. Everything should be chalked up as a merit system when the producers of Game of Thrones are handed a Star Wars trilogy; when audiences decide en masse that a filmmaker like Louis C.K. doesn’t deserve our support, that’s when competitive ideologies are viewed as suspect.

Taken as a whole, the details reported on by The Hollywood Reporter should come as good news for people wondering how Hollywood would overhaul its toxic culture in the wake of the #MeToo movement. It’s one thing to point to individual projects or moments and say that these are signs of change — Harvey Weinstein being ousted from his company, for one, or multiple accusee Casey Affleck removing himself from the 2018 Academy Awards — but these types of financial and legal considerations provide a framework that may outlast even the longest attention spans. When you know that your immoral behavior could deliver creative control of your project over to your employers, you may think twice before signing on the dotted line. And if you have a history of harassment and abuse? Your behavior makes you a financial non-starter before your phone even begins to ring.

Still, it’s not a perfect system. Several insiders in The Hollywood Reporter piece speak to the need for a mutual morality clause, or a clause that protects individuals from the bad publicity of their company should an executive bring irreparable harm to their brand. There is always possibility that some studios could also use these morality clauses as an excuse to steal a project from one of its talent; the JIPEL study in particular notes how Hollywood used these morality clauses to blacklist entertainers during the era of McCarthyism. Given an issue as messy and pervasive as sexual harassment in Hollywood, building out a legal framework that addresses upcoming projects seems like a good place to start. Awareness has been raised; it’s time for studio executives and unions to figure out the next step in the process to ensure that the movie industry remains as abuse-free as possible.

More to Read: