Who Must Maintain Decorum? [Entertainment, Demystified]

[Financial News] During my 17 years on the bench, including stints in the Intellectual Property Division and a civil panel, I handled quite a few entertainment cases. There were disputes over settlement payments, conflicts over group names and trademarks, and, above all, many lawsuits over the termination of exclusive contracts. As I pored over thick case files in those days, I kept noticing two things: among the dozens of clauses packed into exclusive contracts, only a handful actually triggered disputes; and the clause invoked most often, and most vaguely, was the “duty to maintain decorum.”
Things are not much different now that I have left the bench. Two recent rulings directly addressed this longstanding problem and the chronic practices of media coverage involving entertainers, making them worth careful consideration by both the industry and the press. Neither first-instance ruling is final yet, but I would like to examine their significance without identifying the cases.

Here are the facts. After completing all of an overseas official schedule, a member of an idol group spent some free time drinking privately with acquaintances and went with someone of the opposite sex whom they met there to that person’s home. When it appeared that the incident might come to light through foreign media reporting, the member informed the company that same day. After holding a meeting to discuss its response, the company demanded the next day that the member suspend activities and agree to terminate the contract. When the member declined, the company notified them three days later that it was terminating the exclusive contract, citing a breach of the duty to maintain decorum, among other grounds. It then sought several billion won in total, including repayment of the exclusive contract signing bonus, lost profits for the remaining contract term, and a contractual penalty.
The court dismissed all of the company’s claims. Its reasoning has significant implications for contract practices in the industry.
The Four Lines the Court Drew
First, “decency” must be interpreted narrowly. “Decency as a popular culture artist” is an abstract concept. Yet whether conduct falls within it can determine whether a contract is terminated and whether substantial damages are owed. For that very reason, the court said, the concept must not be interpreted broadly. It reaffirmed a basic principle of contract interpretation: ambiguous language that determines the rights and obligations of one party to a contract must be construed narrowly.
Second, the examples written into the contract set the benchmark. The contract in this case added examples—“drunk driving, drugs, gambling, prostitution, sexual misconduct, assault, sexual assault, fraud, and the like”—to the decorum clause in the Standard Exclusive Contract for Popular Culture Artists. The court read this to mean that the parties considered at least those acts, or conduct comparable to them, to constitute damage to an artist’s decorum, while excluding less serious conduct. It found that the conduct at issue was “clearly very inappropriate” for an idol singer, but that it basically concerned the private lives of adults and could not readily be said to be comparable in severity to the listed examples. The court acknowledged that fans were greatly disappointed, but held that this did not automatically amount to a breach of contract.
Third, damage to an artist’s decorum does not automatically constitute grounds for termination. This is the point with the greatest practical significance. The contract in this case limited termination to situations involving “a breach of a material obligation.” Another clause in the same contract, however, provided that if an entertainer could not work for reasons attributable to them, such as drunk driving, gambling, drug use, assault, or sexual misconduct, the contract term would be “extended” by the period of their inability to work. Comparing the two clauses, the court reasoned that, given a contract structure that provided for an extension rather than termination even in cases of more serious misconduct, damage to an artist’s decorum alone could not be considered a breach of a material obligation warranting termination. Allowing the company to choose whichever option—extension or termination—was more advantageous to it would produce an excessively unfair result for the entertainer.
Fourth, the more unfairly a clause is structured, the more narrowly it should be interpreted. The same contract allowed an entertainer to terminate it if a company employee committed a sex crime against them only when there was a “final court judgment.” By contrast, it imposed no such requirement at all for damage to an entertainer’s decorum. The court pointed to this very asymmetry and said that the termination clause therefore had to be interpreted even more strictly.
The court also found that the company could not exclude the member from the team itself and then claim that the member had broken a promise to “continue activities as a member of the group.” Nor could the company turn against the entertainer the “breakdown of the relationship of trust” doctrine that the Supreme Court of Korea developed to protect entertainers’ personality rights and use it as grounds for termination. The court also took into account that the member informed the company as soon as they learned of the issue and participated conscientiously in the response meeting.

What I have come to realize from seeing numerous exclusive-contract cases in court is that the decorum clause is often used in practice as a “card to play when a company wants to end the relationship.” When public opinion turns against an artist, a company may want to distance itself quickly and reach for the most ambiguous clause in the contract as a means of doing so. But contracts are interpreted according to their wording and structure, not public opinion. The distance between conduct deserving moral condemnation and a breach of duty serious enough to warrant billions of won in damages is greater than one might think.
I urge talent agencies to use this ruling as an opportunity to review their contracts. Grounds for termination should be specific and balanced, and agencies should check how the decorum, contract-extension, and termination clauses interact. Before notifying an entertainer of termination, they should verify the facts and follow any corrective procedures set out in the contract. Entertainers and their families, too, should carefully consider what weight a few words in an “examples” list may carry in the future before signing a contract.

But the member’s conduct itself was not the only thing that caused the controversy to spiral out of control. The day before the company notified the member of termination, an entertainment news outlet published an article labeled “Exclusive,” reporting that the member had paid the other party for sex, initially denied it, and eventually admitted it after the agency presented specific evidence. The article even helpfully cited the legal provision on punishment for prostitution and explained that “Korean nationals can be punished for prostitution even when it takes place overseas.” The ruling in the contract case discussed above also noted that the coverage had contributed to the controversy’s escalation, independently of the underlying facts.
The report was untrue. Investigators decided not to refer the prostitution allegation for prosecution. In a damages lawsuit the member brought against the reporter, the court found the article’s central claims false and ordered the payment of substantial damages for emotional distress. This ruling is almost a textbook example of where entertainment reporting crosses the line.
First, adding a qualifier such as “it was reported that” does not provide immunity. The court applied Supreme Court of Korea precedent holding that even if a statement is framed as hearsay or speculation, it constitutes an assertion of fact if the overall impression it creates is that the fact exists. Moreover, the article’s headline was categorical.
Next, the most basic step—checking with the parties involved—was missing. Before publication, the reporter asked neither the member nor the other party about the facts. The court said that even if a denial could be expected, it was possible to include the response alongside the report, so contacting the parties was an essential step.
Third, the identity of the source was a problem. The source the reporter disclosed only near the end of the lawsuit was an interested party who was then in a dispute with the member over terminating the contract. The court pointed out that agencies generally tend to play down information unfavorable to their artists. If an agency instead confirmed damaging details first and claimed to have evidence, it was reasonable for an entertainment reporter to doubt whether the information was true.
Fourth, protecting a source does not lessen the burden of proof. The court said that when a media outlet is a party to a lawsuit, the need to protect a source alone does not relieve it of the burden of proving that its report was true or that there were reasonable grounds to believe it was true. If media outlets were allowed to hide behind anonymous sources, there would be no way to verify false or exaggerated reporting, ultimately making it impossible to protect individuals’ personality rights.
Fifth, reporting on criminal allegations is subject to stricter standards. The Supreme Court of Korea has long held that reports on criminal allegations must be based on thorough reporting and must not use terms or expressions that could give readers the impression that a person is guilty when the matter is only an allegation. Another outlet covering the same story on the same day used the word “allegation” in its headline. The court clearly noted the difference. A single word made the difference to the reporter’s liability.

An idol’s career can be shaken merely by news that they are dating someone. The stigma of prostitution is even more devastating: it undermines the basis for their continued existence as a member of the group and leaves a deep wound in their life as an individual. For that very reason, the court said, reporters covering such allegations are required to make even greater efforts to verify the facts. Because public figures are subject to a wider latitude for raising suspicions, the duty to verify the facts underlying those suspicions is all the heavier.
When I handled cases involving juveniles and families in Family Court, I saw countless times how long and how deeply a stigma, once attached, can follow someone. As the ruling put it, given the broad and rapid reach of media coverage, subsequent corrections or rebuttals alone cannot be expected to restore a person’s reputation sufficiently. Even when a damages award is made, the search results and comments left by the first article do not disappear. The media should ask itself who pays the price for the clicks generated by the two-character tag meaning “exclusive.”
Exclusive contracts require entertainers to maintain decorum. That is only right. But what these two rulings show is that entertainers are not the only ones who must behave with decorum. The companies that hold the contracts and the reporters who hold the pen have a duty to maintain it, too.
(Kim Tae-hyung, Partner Attorney at Barun Law LLC)Attorney Kim Tae-hyung specializes in family law and inheritance. After being appointed as a judge in 2007, he ended his 17-year judicial career in 2024, following his service as a presiding judge at the Suwon Family Court, and joined Barun Law LLC. During his time on the bench, he handled family law, inheritance, and juvenile proceedings for a total of eight years from 2012. In particular, during the five years before his retirement (2019–2024), he built his expertise in the field by handling numerous family and inheritance cases as a specialist judge in family and juvenile matters at the Suwon Family Court. He is also the author of the bestseller “Inheritance, Divorce, Juvenile Trials, and the Court as Explained by a Chief Judge” (Pakyoungsa, 2023).

 


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