I had long been wondering why former Fox anchor Gretchen Carlson had sued Roger Ailes rather than her corporate employer, Fox News Network LLC. The suit has been discussed at length by various media, and a copy of the complaint is available on Ms. Carlson’s lawyer’s web site (Link: Here). The lawsuit is essentially an action alleging gender-based discrimination and retaliation filed under New York City’s “little” Title VII statute. Ordinarily, actions of this nature exist between employee and employer (under federal law and many state statutes), and Ailes was clearly an agent of her employer. (Note: The NYC statute prohibits discrimination by “an employer, an employee or an agent thereof.” As Ms. Carlson alleges in her pleadings, this statute may permit one employee to sue another individually.)
It appears clear now, at least to me, that Carlson may have sued Ailes, and not her employer, to try to avoid an arbitration clause in her employment agreement.
The suit is pending in federal court in New Jersey, originally filed in state court but removed by counsel for Ailes to federal court. Contemporaneous with Ailes’ removal of the suit, his counsel filed a motion to compel arbitration with the court, based on Carlson’s employment agreement. You read his legal argument here.
On Friday, July 15, 2016, Ms. Carlson’s lawyers filed their brief opposing Ailes’ motion to compel arbitration. You can read it here. In it, she argues that the arbitration agreement is with Fox, but not Ailes.
Somewhat less interesting, but also noteworthy, Mr. Ailes’ lawyers on Friday also filed a motion to transfer venue to the Southern District of New York. You can read that motion here.
A bill now being considered by California lawmakers is calling attention to the uneasy balance between copyright principles and public-records law. AB 2880, introduced by the Judiciary Committee and revised May 31, would allow state agencies to claim copyright protections in government works, while at the same time attempting to restrict agency efforts to use their copyrights to circumvent the state Public Records Act.
“Defamation by implication” action may proceed against Commercial Appeal in Shelby County Circuit Court
Adding a “question mark” to a controversial published statement does not necessarily shelter you from liability in Tennessee.
That is one of the ostensible takeaways from an opinion issued by the Tennessee Court of Appeals on Friday. In its written opinion, the Court of Appeals held that the local court’s dismissal of Greg Grant’s “defamation by implication” claim against the newspaper was premature.
If you are inclined to read the opinion in Greg Grant v. The Commercial Appeal, et al. (linked here), you will notice that the Court also ruled that Tennessee’s “Fair Report” privilege does not protect the Commercial Appeal in this case but that, on the other hand, the statements at issue are not capable of defamatory meaning (and so the straight defamation claim should not proceed). The Appeals Court remanded the case to Circuit Court however, for consideration of the “defamation by implication” claim.
I write about it here because the opinion carries with it an important message about the frequent efforts by media organizations to inoculate themselves from liability by posing questions in their reporting to which they cannot offer affirmative answers. Simply put, sometimes it works, sometimes it does not, but it is not a sure thing.
Greg Grant sued the Commercial Appeal and several of its alleged agents over an October 19, 2013 article headlined, “Silent partner? Grant’s involvement clouds $1.5 million Southbrook mall deal.” (article link: here). The article itself attempts to determine whether, in fact, Mr. Grant really is a partner in the mall deal and to what extent. As the Appeals Court notes, the article does not answer the question with certainty (that’s why the trial court found that the straight defamation claim could not proceed. “To be considered defamatory, ―a question must be reasonably read as an assertion of false fact; inquiry itself, however embarrassing or unpleasant to its subject, is not accusation.” Eisenstein v. WTVF-TV, 389 S.W. 313, 320 (Tenn. 2012)).
The newspaper is not however, in the clear on Grant’s “defamation by implication” claim.
In the process of examining Grant’s involvement, the newspaper accurately reports that Grant lost a 2002 False Claims Act case brought by the U.S. Government. In that case, the District Court found (in 2004), that “a bus company owned by Grant submitted bogus bills by not carrying insurance and by claiming to have transported a TennCare patient to medical clinics when the patient was either in the hospital or getting treatment at home.” The Commercial Appeal further reported that the District Court judge found that “Grant submitted 3,306 false claims totaling $52, 573. By law, he tripled those damages to $187,719 and then tacked on an additional $5.7 million in civil penalties.”
Fast forward nine years, and the Commercial Appeal is investigating what Grant stood to gain from a conditional grant of $1.5 million awarded by the Memphis City Council toward development of the Southbrook mall.
Defamation by implication
And this is where this area of the law becomes precarious for media organizations. According to the Court of Appeals, “Tennessee law provides that a statement may be capable of defamatory meaning even if the words do not appear defamatory on their face, but instead imply or suggest a defamatory meaning.” The Court of Appeals found that the Commercial Appeal article ‘juxtaposes a series of facts so as to imply a defamatory connection between them.’” See Opinion.
Grant argues that the “implication of the Article was to portray him as dishonest and deceptive.” The Court of Appeals says this need to be examined further because:
As one example, the Article points to a letter written from Mr. Grant to [former Housing and Community Development Director Robert] Lipscomb wherein Mr. Grant wrote that he had ―removed himself from the project. Then, the Article, seemingly attempting to undercut Mr. Grant‘s assertion in his letter to Mr. Lipscomb, states: ―Recently filed state records, however, list Grant as the registered agent for Southbrook Properties, Inc. . . . As a second example, the Article provides: ―After an initial round of quibbling, Grant agreed he maintains an office at Southbrook. The clear import of the preceding sentence is that Mr. Grant avoided admitting to the newspaper that he maintained an office at the mall.
In our opinion, the statements made in the Article . . . are capable of implicitly bearing a defamatory meaning when read by a reasonable person.
Greg Grant v. The Commercial Appeal, No. W2015–00208-COA-R3-CV (September 18, 2015).
So there it is, “defamation by implication.” Here is what the Tennessee Court of Appeals had to say about this cause of action on Friday:
Defamation by implication occurs when statements that are true are nevertheless actionable if they imply facts that are not true. Id. (citing Aegis Sciences, No. M2012-00898-COA-R3- CV, 2013 WL 175807, at *11 (Tenn. Ct. App. Jan. 16, 2013)).
Here is the analysis upon which the Court relied:
“Defamation by implication” is false suggestions, impressions and implications arising from otherwise truthful statements. Defamation by implication arises not from what is stated but from what is implied when a defendant juxtaposes a series of facts so as to imply a defamatory connection between them, or (2) creates a defamatory implication by omitting facts, such that the defendant may be held responsible for the defamatory implication, unless it qualifies as an opinion, even when the particular facts are correct. Otherwise, by a careful choice of words in juxtaposition of statements in a publication, a potential defendant may make statements that are true yet just as damaging as if they were actually false. Defamation by implication is also referred to as ―innuendo. For example, an article was found implicitly defamatory where it truthfully reported that a woman upon finding her husband at plaintiff‘s home, shot the plaintiff, but the article neglected to state that at the time they were all at a social gathering with several other people, including plaintiff‘s husband. Courts apply differing standards to defamation by implication actions from requiring the defamatory implication to arise from a material omission to not allowing such an action as contrary to free speech values.
Id. (quoting 4 Modern Tort Law: Liability and Litigation § 36:2 (2d ed.))(emphasis added).
Unlike a defamation claim, where a plaintiff needs to prove that the subject statements were false, a “defamation by implication” claim only requires that the subject statements “leave a false impression.”
The Court of Appeals ruling is not the end of the litigation. It is merely the ruling on whether the underlying lawsuit should go forward in Shelby County. On several points, the Court of Appeals held in favor of the newspaper, but on this one issue, the Court held that the Plaintiff will be able to proceed with his claim of “defamation by implication,” which alleges that the Commercial Appeal “impl[ied] that Mr. Grant is a dishonest businessman” and that this implication “could cause harm to his reputation in the community.”
Bottom line: At least in Tennessee (and the other states referenced by this Court), media organizations are not automatically safe from liability by publishing reports in a “question” format. If those reports carry with them untrue implications, you may still have tort exposure.
In the wake of the shooting of Alison Parker and Adam Ward, I have been glued to the news coverage of the tragic event. While the story was horrific from jump, I became particularly interested when I received the breaking news emails identifying the name of the suspect, Vester Flanagan. Flanagan and I worked together at WTOC in Savannah in 1999. He and I frequently worked the same week-day nightside shift. I’ve been in contact with other contemporaries who worked with Flanagan at that time and none of us had then identified any of the indicators of mental illness and rage that define the person he appears to have become during the last decade.
The video he recorded and uploaded is particularly haunting to me because there appears to be a moment when Alison Parker, mid-live shot, looks at Flanagan or notices him standing behind videographer Adam Ward. I cannot be certain whether she did or did not. I know however, from experience, that reporters must simultaneously 1) become acutely aware of people around them when doing live shots; and 2) remain totally nonplussed (at least externally) by the people around them. Every reporter who has done live television has had hecklers, drunks, kids, thugs and even well-intentioned television fans attempt to distract them from their live report or interview. It is clear from Flanagan’s point-of-view video that he approached the crew standing alone on that balcony and stood there behind Mr. Ward for more than thirty seconds. Even if Ms. Parker had intellectualized the fact that Flanagan was there, behind Mr. Ward, I cannot imagine her doing anything differently. How could she know what his intentions were? Reporters train to either “react appropriately” to their surroundings during live shots or to avoid distractions. It is hard for me not to remember my own experiences, willing myself to drown out those distractions and to remain in control of my live shot; it is hard not to imagine Ms. Parker engaging in the same self-discipline.
During one of the national newscasts today, an expert was asked about legal recourse that the families of Parker and Ward might have against the television station. There was discussion about Flanagan’s history of rage and about the station having put staff on notice about Flanagan lurking nearby the station. There was a lot of bluster about the station’s exposure to litigation because they “knew” (or should have known) that Flanagan was a risk. The suggestion was that the station knew he was a threat; the implication, as I heard it, was that the station could have, or should have, done something to prevent this shooting and may be legally liable as a result of not having done more.
Unfortunately, while the families of Parker and Ward may have legal recourse against third-parties (for example, Flanagan’s estate or the shopping center, if they can show that Bridgewater should have had certain security and did not, etc.), their recourse against the employer, the television station, appears to be limited to a maximum of $11,000 each. I am neither a Virginia lawyer, nor am I licensed to practice in that state, but a quick glimpse at the state of the law there appears to show consistencies with many states across the country. An employee injured or killed while on the job is limited to worker’s compensation (or workman’s compensation) benefits from their employer.
In Virginia, the rights and remedies provided in the Worker’s Compensation Act are exclusive of all other rights and remedies of an employee or his estate at common law or otherwise. Clean Sweep Prof’l Parking Lot Maint., Inc. v. Talley, 267 Va. 210, 213, 591 S.E.2d 79, 81 (2004)(citing Peck v. Safway Steel Prods., Inc., 551 S.E.2d 328, 329 (2001)). To me, this means that even if the families of these victims believe that the station should have done something differently, their only avenue to recover against the station is through the worker’s compensation policy carried by the station.
State law generally requires employers to carry worker’s compensation insurance. In exchange for carrying it, employers cannot be held liable for more than these policies provide when an injury occurs during the performance of one’s job duties. In Virginia, “[a]n injury will therefore be deemed to ‘arise out of’ the claimant’s employment ‘when there is apparent to the rational mind upon consideration of all the circumstances, a causal connection between the conditions under which the work is required to be performed and the resulting injury.’” Stillwell v. Lewis Tree Serv., Inc., 47 Va. App. 471, 477-78, 624 S.E.2d 681, 683 (2006)(quoting Combs v. Va. Elec. & Power Co., 525 S.E.2d 278, 282 (2000); see also United Parcel Serv. of Am. v. Fetterman, 336 S.E.2d 892, 893 (1985)). In this case, not only were Parker and Ward on the job, they were literally “on the air” when the suspect allegedly shot them.
The amount or extent of an employer’s liability is typically set out in state statute. In Virginia, for example, it appears the dependents of an employee killed on the job may be entitled to 400 to 600 weeks of that employee’s compensation (from the time of death). Va. Code Ann. 65.2-512. It does not appear that either Ms. Parker or Mr. Ward had any statutory dependents (i.e., a spouse, a child, or destitute parents). In the absence of dependents, the Virginia Worker’s Compensation Act appears to only require an employer to pay burial expenses not exceeding $10,000.00 and the reasonable transportation expenses for the deceased not to exceed $1,000.00. Va. Code Ann. 65.2-512(B). The effect of the statute feels particularly rigid in this instance, because it appears both Parker and Ward were engaged to be married in the near future.
Worker’s compensation laws are both lauded and loathed. They entitle an injured employee to recover damages without having to prove that the employer did anything wrong (as they would have to do in a personal injury lawsuit). On the other hand, the damages are limited to amounts fixed by statute and typically exclude pain and suffering. Employers face the burden of having to pay premiums on potentially expensive policies, but enjoy the benefit of being protected from costly personal injury suits.
While it may indeed be other things as well, as between employer and employee, the horrific shooting in Virginia this week appears to be an on-the-job injury. As a result, the families of Parker and Ward may face an uphill battle if they seek to recover against the station.
The Columbia Journalism Review has a fascinating piece on a new study about the decline of FOIA requests by legacy media (and the rise of same among digital media).
Ask any journalist and they’ll tell you the Freedom of Information Act process is broken. Denials are at record highs, navigating the bureaucracy can be a nightmare, and the federal agencies recently killed a modest reform bill. But a series of FOIA lawsuits also have just shown how the 50-year-old transparency law can still be indispensable. And absent any change in the law, the best way for news organizations to make sure it stays relevant is to use it innovatively and aggressively.
Click here to read more at CJR.org.
Linking here to a good summary piece from the Columbia Journalism Review’s web site dealing with three recent significant libel suits and anti-SLAPP statutes (authored by Jonathan Peters)…
ONE OF MY FIRST EDITORS used to joke that you haven’t really lived as a journalist until you’ve been threatened with a libel lawsuit. He wasn’t being cavalier about the duty to report accurately—he was just lamenting the pervasiveness of the threat.
A few updates on some cases I discussed here a few months back:
1. The parties to the Kane v. CNN case in the Eastern District of New York have evidently reached a tentative settlement, pending the approval of a worker’s comp component. Read “letter” linked here. My prior discussion of this case is linked here. In short, this was a case where a CNN staffer alleged he was the victim of unlawful discrimination on the basis of gender because he refused to conform to male stereotypes (aka gender stereotyping).
2. The Plaintiff in the Title VII case against Gannett and KTHV (Little Rock, AR) has dismissed his lawsuit without prejudice. This means that he may re-file it within a certain period of time (one year from the date of dismissal, per Arkansas’ savings statute, 16-56-126), while preserving his rights. You can see the notice here, and the Order here. My post on this case is linked here. To thumbnail, this case involved an african-american sports reporter, hired to be the number 3, who alleges he was promised and later denied promotions to the number 1 post. Parties dismiss their cases without prejudice all the time for a number of very good reasons and you should read no meaning into it regarding the merits of the underlying case. That said, until the Plaintiff re-files, the case is over.
A friend of mine who works in television told me the other day that he believed his contract would be invalidated by the sale of his television station. He worried that he needed to begin looking for work, even though he would have had another year left on his operative deal. As I explained to him, in most cases, broadcast employment agreements provide language that anticipates just this sort of eventuality and, as a result, most contracts simply continue with the new owner. In my opinion, a station’s inventory of operative employment agreements comprises part of the “value” of what it is selling.
For employees with contracts, look at the “assignment” provision.
The general rule is that most business contracts are freely assignable (unless there is language to the contrary), except contracts which involve personal services or some sort of “confidential” relationship. This means that, in the usual case, a party to a contract may “assign” his rights and responsibilities to another, who will take his place in the contract. In the context of personal services, however, courts have traditionally been disinclined to allow a personal service provider to assign his responsibilities under a contract to another person, absent consent from the employer. For example, this means that a reporter working under a three-year deal typically cannot say that he is going to “assign” his duties under his employment agreement to some other wannabe reporter, without permission from the employer station. Makes sense, right? It would be like a TV star saying he wanted to assign his duty to perform to some low-level actor. By contrast, the station usually CAN assign its responsibility to employ and to make payment to the reporter, unless there is language in the contract to the contrary (and there usually is not).
To resolve any ambiguity and to avoid any default rules from kicking into play, most employment agreements contain language dealing with this.
Here are four examples from different broadcast groups:
Assignment. This Agreement may not be assigned or transferred by Talent to any other person or entity without the prior written consent of Station. If Station enters into an agreement for the transfer of the license of Station, however, Talent agrees that this Agreement may be freely assigned by Station without the prior consent of Talent.
Assumption of Agreement by the Company’s Successors and Assignees. This Agreement is personal to Employee and shall not be assignable by Employee. The Company’s rights and obligations under this Agreement will inure to the benefit of and be enforceable by the Company’s successors and assignees.
Assignment. This Agreement is personal to Employee and may not be assigned in whole or in part, sold, transferred, or pledged by Employee. Employer may assign this Agreement to any affiliate or to a Buyer of the Station’s assets or FCC licenses.
Assignment. This Agreement is non-assignable by Employee and any purported assignment by Employee shall be void. This Agreement shall inure to the benefit of Company’s successors, assignees, and Affiliates, and Company and any subsequent assignee may freely assign this Agreement, in whole or in part, to any party, provided that such party assumes and agrees in writing to keep and perform all of the executory obligations of Company hereunder.
Every one of these provisions basically says that an employer can assign its duties under your contract to a buyer, but that you as the employee may not. The bottom line is that a new employer is going to step into the shoes of the old employer and your contract continues.
What about employees who have signed contracts without assignment provisions? This is unusual because an assignment provision is typically part of a drafter’s boilerplate. That said, stations are increasingly signing off-air or part-time personnel to simple short-form non-compete agreements, which may or may not include assignment provisions. What happens to these people when their stations are bought? My simple answer is that it is going to depend on what state you are in, as contract law differs from state to state.
A relatively recent Tennessee case held that a non-compete agreement was not a personal services agreement because “it does not require any party to perform personal services, but only to abstain from particular conduct.” Packers Supply Co. v. Weber, 2008 WL 1726103, at *4 (TN.App. Ct. 2008)(Managed Health Care Associates v. Kethan, 209 F.3d 923, 929 (6th Circuit 2000). As a result, they found that it was freely assignable. If you apply that reasoning to our scenario, it would follow that a TV station in Tennessee could assign its non-compete agreements to a buyer even though these agreements may be silent as to assignment.
Aereo CEO and Founder Chet Kanojia issued the following statement about today’s SCOTUS opinion:
“Today’s decision by the United States Supreme Court is a massive setback for the American consumer. We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry. It is troubling that the Court states in its decision that, ‘to the extent commercial actors or other interested entities may be concerned with the relationship between the development and use of such technologies and the Copyright Act, they are of course free to seek action from Congress.’ (Majority, page 17) That begs the question: Are we moving towards a permission-based system for technology innovation?
“Consumer access to free-to-air broadcast television is an essential part of our country’s fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States. And when new technology enables consumers to use a smarter, easier to use antenna, consumers and the marketplace win. Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle.”
“Justice Scalia’s dissent gets it right. He calls out the majority’s opinion as ‘built on the shakiest of foundations.’ (Dissent, page 7) Justice Scalia goes on to say that ‘The Court vows that its ruling will not affect cloud-storage providers and cable television systems, see ante, at 16-17, but it cannot deliver on that promise given the imprecision of its results-driven rule.’ (Dissent, page 11)”
“We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”
The U.S. Supreme Court has ruled against Aereo in a 6-3 opinion, holding that Aereo’s capture and re-sale of over-the-air broadcasts violates federal copyright law. You can read the opinion here.
From the New York Times:
Aereo’s technology system relies on thousands of dime-size antennas — one for every subscriber — stored in local warehouses. Those antennas capture over-the-air television signals and are connected to a remote digital video recorder and Internet connections. Subscribers pay to rent an antenna, which they control remotely from their computers, smartphones or other devices.
Excerpted from the Court’s opinion:
Because Aereo’s activities are substantially similar to those ofthe CATV companies that Congress amended the Act to reach, Aereo is not simply an equipment provider. Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, virtually as they are being broadcast. Aereo uses its own equipment, housed in a centralized warehouse, outside of its users’ homes. By means of its technology, Aereo’s system “receive[s] programs that have been released to the public and carr[ies] them byprivate channels to additional viewers.” Fortnightly, supra, at 400.
This Court recognizes one particular difference between Aereo’s system and the cable systems at issue in Fortnightly and Teleprompter: The systems in those cases transmitted constantly, whereas Aereo’s system remains inert until a subscriber indicates that she wants to watch a program. In other cases involving different kinds of service or technology providers, a user’s involvement in the operation of the provider’s equipment and selection of the content transmittedmay well bear on whether the provider performs within the meaning of the Act. But given Aereo’s overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies does not make a critical difference here. Pp. 8–10.