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.

Judge Julia Gibbons, writing for the Sixth Circuit Court of Appeals, articulated the basis for that Court’s reversal of a closely-watched defamation case involving the liability of a website provider, thedirty.com, for the defamatory comments posted by its users about a former Cincinnatti Bengals cheerleader.  You can read the Order here.

The lower Court, a district court in Kentucky, had held that although a website provider is usually not liable under Section 230 of the Communications Decency Act (“CDA”), that service provider becomes responsible if they “develop” the content, or if they “in some way specifically encourage[] the development of what is offensive about the content.”  Jones v. Dirty World Entm’t Recordings, LLC, 840 F. Supp. 2d 1008, 1010-11 (E.D. Ky. 2012).  The Plaintiff was awarded $338,000.00 in damages.

It turns out, that judgment was not to be; it was vacated by this Sixth Circuit opinion.

The Sixth Circuit, in its ruling yesterday, adopted the “material contribution test” to determine whether a website operator is “responsible, in whole or in part, for the creation or development of [allegedly tortious] information.”  This test is taken from Ninth Circuit case law and is articulated as follows:

[W]e interpret the term “development” as referring not merely to augmenting the content generally, but to materially contributing to its alleged unlawfulness. In other words, a website helps to develop unlawful content, and thus falls within the exception to section 230, if it contributes materially to the alleged illegality of the conduct.

A material contribution to the alleged illegality of the content does not mean merely taking action that is necessary to the display of allegedly illegal content. Rather, it means being responsible for what makes the displayed content allegedly unlawful.

As to the facts of this case, which you can read about here, the Sixth Circuit found that thedirty.com and its owner had not “materially contributed” to the defamation.

Dirty World and Richie did not author the statements at issue; however, they did select the statements for publication. But Richie and Dirty World cannot be found to have materially contributed to the defamatory content of the statements posted on October 27 and December 7, 2009, simply because those posts were selected for publication. See Batzel, 333 F.3d at 1035 (holding that an editor of an email newsletter who received and published allegedly actionable information, adding a short headnote, was immune under § 230 because an editor’s changes to the length and spelling of third-party content do not contribute to the libelousness of the message).

Nor can they be found to have materially contributed to the defamatory content through the decision not to remove the posts. The CDA expressly bars ‘lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions—such as deciding whether to publish, withdraw, postpone or alter content.’

 

The Court wraps up its analysis with the following observation.  The owner of thedirty.com does not require users to post illegal or actionable content as a “condition of use.”  Also, the Court opines, the fact that the site owner may have “ratified” or “approved” the defamatory statements does not mean he “developed” them as contemplated by the newly adopted “material contribution test.”

The Washington State Supreme Court has determined that the Seattle Police Department violated Washington’s Public Records Act by not providing a list of retained videos recorded by dash cams on police cruisers.  The list of videos was requested as part of a public records request by KOMO-TV reporter Tracy Vedder, which included a request for officer logs and specific video recordings.   The Court did not find that the SPD violated the Act by refusing to provide log sheets corresponding to their dash cam videos, because the request was too broad and the department did not keep such logs anymore.  The Court also established that the police department could refuse to provide certain videos if they contained material that were subject to certain statutory exceptions, like those which protect private recorded conversations.

TVSpy has a synopsis here.  You can read the Order here.

NB:  The Court awarded KOMO its attorney’s fees and remanded for further proceedings.

A former CNN employee has sued the company and his supervisors alleging, among other things, discrimination on the basis of gender and retaliation under Title VII.  The NY Daily News and FTVlive both have pieces on this new suit.  The Complaint itself, which you can read here, is fascinating, both because it offers a rare behind-the-scenes glimpse and because it gives me an opportunity to discuss “hostile work environment” and protection of gays and lesbians under Title VII of the Civil Rights Act.  The Plaintiff is seeking $5m in compensatory damages, plus punitives.

First, a thumbnail of the Complaint:  William Kane allegedly worked for CNN for ten-plus years before anyone knew he was gay.  During that time, he routinely became known for wearing brightly colored clothing, but was never challenged for it.  Simply put, he claims that once the company found out he was gay, his immediate supervisors began to harass him and that he was ultimately terminated as a result.

Hostile work environment does not mean what you probably think it means.  Ordinarily, it is not a cognizable “cause of action” absent some claim that the “hostile work environment” is a result of some form of unlawful discrimination.  Under federal law, the forms of unlawful discrimination are set forth in Title VII of the Civil Rights Act and are generally limited to race, color, religion, sex, and national origin.  Simply put, sex means gender, it does not ordinarily mean orientation.  Note: The EEOC has held that discrimination against an individual because that person is transgender is discrimination because of sex and therefore is covered under Title VII of the Civil Rights Act of 1964.  Also, critically, beginning in 2003, New York state law does expressly prohibit workplace discrimination on the basis of sexual orientation.

This blog post is just about the federal law claims.

To make a case of “hostile work environment” under Title VII, you usually have to prove that you have been subjected to severe or pervasive treatment enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive on the basis of race, color, religion, sex, or national origin.

This case alleges, among other claims, that the Plaintiff, William Kane, was subjected to such an environment on the basis of his sex.  More specifically, his complaint alleges that he “was treated differently because he refused to act in conformity with male stereotypes.”  The Second Circuit, comprised in part by New York state, has addressed whether Title VII applies in such situations.

The Second Circuit’s analysis reflects the state of the law across much of the country and illustrates the real challenges this Plaintiff will face in a New York federal court:

Title VII protects a limited class of persons from discrimination. Protection is limited to individuals who are discriminated on the basis of “race, color, religion, sex, or national origin.” Sexual orientation is not included in the statutory protected class. In Simonton v. Runyon, 232 F.3d 33 (2d Cir.2000), this Court upheld a district court’s dismissal of a Title VII claim based on sexual orientation because, “[t]he law is well-settled in this circuit and in all others to have reached the question that [the plaintiff] has no cause of action under Title VII because Title VII does not prohibit harassment or discrimination because of sexual orientation.” The Court noted that the legislative history was scant on whether sexual orientation should be included in the category of “sex,” but the Court concluded, based on numerous bills attempting to extend Title VII protection to sexual orientation, that Congress did not intend to include sexual orientation in Title VII’s current form.

Based on this Court’s interpretation of Title VII in Simonton, Kiley may not bring a claim under Title VII for discrimination based on sexual orientation. See Dawson v. Bumble & Bumble, 398 F.3d 211, 217-18 (2d Cir.2005) (“[T]o the extent that [the plaintiff] is alleging discrimination based upon her lesbianism, [the plaintiff] cannot satisfy the first element of a prima facie case under Title VII because the statute does not recognize homosexuals as a protected class.”).

Kiley v. American Soc. for Prevention of Cruelty to Animals, 296 Fed.Appx. 107, at *1-2 (2nd Cir. 2008)(some internal citation omitted).

That case goes on to read:

Plaintiffs may bring Title VII claims alleging that an adverse employment decision was due in part to sexual stereotyping by the employer. However, a plaintiff may not use a gender stereotyping claim to “bootstrap protection for sexual orientation into Title VII.”

Kiley v. American Soc. for Prevention of Cruelty to Animals, 296 Fed.Appx. 107, at *2 (2nd Cir. 2008)(emphasis added)(internal citation omitted).

More analysis from another Second Circuit case:

When utilized by an avowedly homosexual plaintiff, however, gender stereotyping claims can easily present problems for an adjudicator. This is for the simple reason that “[s]tereotypical notions about how men and women should behave will often necessarily blur into ideas about heterosexuality and homosexuality.” Like other courts, we have therefore recognized that a gender stereotyping claim should not be used to “bootstrap protection for sexual orientation into Title VII.” See also Lex K. Larson, 10 Employment Discrimination § 168.10[1] (2d ed. 2003) (“It is not uncommon for plaintiffs to fall short in their Title VII pursuits because courts find their arguments to be sexual orientation (or other unprotected) allegations masquerading as gender stereotyping claims.”); Kristin M. Bovalino, How the Effeminate Male Can Maximize His Odds of Winning Title VII Litigation, 53 Syracuse L.Rev. 1117, 1134 (2003) (counseling “gay plaintiffs bringing claims under Title VII[to] emphasize the gender stereotyping theory and de-emphasize any connection the discrimination has to homosexuality”).

 

Similarly, district courts in this Circuit have repeatedly rejected attempts by homosexual plaintiffs to assert employment discrimination claims based upon allegations involving sexual orientation by crafting the claim as arising from discrimination based upon gender stereotypes. See Martin v. New York State Dep’t of Corr. Servs., 224 F.Supp.2d 434, 447 (N.D.N.Y.2002) ( “The torment endured by Martin … [t]he name-calling, the lewd conduct and the posting of profane pictures and graffiti are all of a sexual, not gender, nature.”); Samborski v. West Valley Nuclear Servs., Co., 2002 WL 1477610, at *3 n. 11 (W.D.N.Y. June 25, 2002) (stating in dicta that although “being called a ‘lesbian’ [may be] based not on a perception of true sexual orientation, but rather as a means of denigrating a person because of sexual stereotype,” plaintiff’s gender stereotyping claim is “somewhat undermined” to the extent that it rests upon being called a lesbian); Trigg v. New York City Transit Auth., 2001 WL 868336, at *6 (E.D.N.Y. July 26, 2001) (rejecting gender stereotyping claim because plaintiff’s “Amended Complaint is rife with references to sexual orientation, homophobia, and accusations of discrimination based on homosexuality”), aff’d without opinion, 50 Fed.Appx. 458 (2d Cir.2002); cf. Kay v. Independence Blue Cross, 2003 WL 21197289, at *5 (E.D.Pa. May 16, 2003) (holding that gay male plaintiff “has shown that he was subjected to adverse treatment because of his co-workers[‘] perceptions that he was a ‘miss prissy’ or less than [a] ‘real man.’ As such, there is affirmative evidence that the harassment was related to perceptions about Mr. Kay’s masculinity, rendering the conduct gender stereotyping actionable under Title VII.”); Heller v. Columbia Edgewater Country Club, 195 F.Supp.2d 1212, 1224 (D.Or.2002) (lesbian plaintiff stated Title VII claim by alleging discrimination based upon her failure to conform to supervisor’s “stereotype of how a woman ought to behave. Heller is attracted to and dates other women, whereas Cagle believes that a woman should be attracted to and date only men.”).

Dawson v. Bumble & Bumble, 398 F.3d 211, at *218-19 (2nd Cir. 2005) (some internal citation omitted).

OK – Now on to the details of this case…

According to the Complaint, William Kane was a contractor for CNN until 2004 and then became a full-time employee, working in the NY Technical Operations Department.  During his entire time there (until 2013), he alleges that he dressed in brightly colored clothing and that CNN had no dress code for employees.  His company ID card photos featured him attired in a long sleeved bright pink shirt.  He claims no one said a word to him about his attire for the majority of his tenure.  He alleges that in 2011 one of his supervisors began to challenge his attire.

56. On or about April 12, 2011, Defendant McLoughlin offered Plaintiff a bribe of $100.00 in cash “to go to TJ Maxx” if Plaintiff would agree to change out of his blue track suit because McLoughlin alleged that journalist Mr. Piers Morgan said that it was a distraction to him.

57. Plaintiff refused the aformentioned $100.00 cash bribe. Instead of accepting such bribe, the Plaintiff went to his locker and placed his black CNN sweatshirt over his blue track suit.

58. Journalist, Piers Morgan denied ever complaining to anyone that Plaintiff’s attire was a distraction. Mr. Morgan invited Plaintiff into his office. While in the office, Plaintiff indicated to Mr. Morgan “Piers, I was told that my track suits were a distraction to you.” Mr. Morgan replied “Who said this?” Plaintiff responded that it was his direct manager, “McLoughlin” and Mr. Morgan stated to Plaintiff “I never said this. I love your track suits.” Mr. Morgan told Plaintiff that he liked his tracksuits because he was a big soccer fan and encouraged Plaintiff to continue to wear them in front of Plaintiff’s colleagues stating exactly inside CNN-NY’s Studio 71, where his studio aired, “I want Billy to wear the brightest colored clothing when working on my show.”

66. On or about October 18, 2012, Plaintiff wore a black Mariachi suit to work and wore it for the duration of his 8 hour shift. He was never asked to change, cover it up or not to wear it in the future. In fact, Plaintiff received many compliments including CNN Journalist, Fareed Zakaria, who wore Plaintiff’s sombrero because he was doing a story that day called “Misconceptions of Mexico” on his “GPS” (“Global Public Square”) show on CNN International. Mr. Zakaria personally asked Plaintiff to meet his executive producer which the Plaintiff was “proudly shown off” and Zakaria stated “Isn’t this suit incredible?”

On October 18, 2012, Plaintiff used a CNN phone to call his fiance in Mexico. When his supervisor asked why he called Mexico, and was told that the call was to a fiance, he allegedly congratulated Plaintiff and said “what’s her name?” Plaintiff explained it was not a “her” it was a “he.” This was the first time he told his direct supervisor he was gay.

Later that day, the supervisor allegedly told him not to wear mariachi suits to work because they were “too flamboyant for a male in our department.” The supervisor also allegedly told him he would be better suited for work in the “Entertainment or Make-Up Department.”

In the Complaint, Plaintiff alleges that his supervisor suggested the transfer because of “the stereotypical belief that there are more homosexuals in the entertainment and/or makeup department at CNN.”

Co-workers became aware of the situation thereafter. He alleges that CNN talent like Erin Burnett and Anderson Cooper, learned of the “treatment” to which he was exposed and offered their support.

Plaintiff apparently filed myriad complaints with CNN’s human resources department during the subsequent months.

After having filed these complaints, but without any action having been taken, Plaintiff allegedly again called his fiance in Mexico using CNN’s phone.  He claims the supervisor called him into a private meeting and allegedly berated him for it:

104. Plaintiff felt trapped in a room with Silva against his will and threatened that he would not let Plaintiff out until Plaintiff stopped crying. Plaintiff told Silva to leave him alone and that he was not doing anything different than anyone in the department and was never treated in this manner prior to telling Silva that he was gay.

105. Plaintiff again requested that Defendant Silva “Open the door.” Defendant Silva stated “Not until you stop crying.” The plaintiff responded “You made me cry. I don’t care if people see me crying. If they ask, they will know why — because of you and your harassment.” Silva eventually did open the door and the Plaintiff left whilst in tears.

109. As a result of Plaintiff’s complaints to Human resources against Defendant Silva, Defendant companies involuntarily removed Plaintiff from his regular position as an “A2” studio operator handling the microphones for the journalist and guest, and was placed in training in a different area utilized for entry level employees known as “MVID”.

110. Control 52 (MVID) is a room where there is no interaction with CNN journalists or guests. Furthermore, Control Room 52 is completely different and not at all similar to the Plaintiff’s prior position and job description in violation of FMLA.

Plaintiff claims that his supervisor continued to challenge his dress for work, at one point telling him his “white suit was ‘too flashy for Erin Burnett.'” He was ordered to change and did so without protest.  The Complaint alleges a series of other disparaging remarks allegedly made by supervisors.

On another occasion, Plaintiff alleges another supervisor wrongfully blamed him for a scheduling error, called him “stupid” and spoke to him in a “hostile and demeaning manner.”

On July 1, 2013, Plaintiff was terminated. On this same date, he alleges the Defendants issued their first employee dress code. He alleges he was replaced by a straight male.

Here is the thrust of the legal action and this is the reason I cited the above authority from the Second Circuit.  The Court in this case will have to look at the following allegations and decide whether this meets their test:

190. Plaintiff was treated differently because he refused to act in conformity with male stereotypes.

191. Commencing upon the first day that Plaintiff informed his supervisor Silva that he was gay, Plaintiff was subjected to inappropriate comments about his sexual orientation and relationship with his husband which affected the terms and conditions of his employment by creating a hostile work environment.

193. Plaintiff was subjected to an impermissible and unrelenting pattern and practice of discrimination, hostile work environment and retaliation by co-workers and Defendants based upon his sexual orientation and in retaliation for Plaintiff’s exercise of his right to complain and whistle blowing.

195. Defendants discriminated against Plaintiff by engaging in severe and pervasive activities constituting gender discrimintation, including, but not limited to, engaging in, condoning and tolerating unfair and sexually motivated actions against homosexual employees within CNN and discrimination against Plaintiff with respect to the terms, conditions and privileges of his employment. The cumulative effect of Defendants’ conduct created an abusive, offensive and contaminated work atmosphere.

When considered against the clear holdings of the Second Circuit, it is arguable whether these allegations meet the standard required there, that “gender stereotyping claim should not be used to ‘bootstrap protection for sexual orientation into Title VII.’”  That said, I offer no opinion on the merits of the other claims in the Complaint which include claims for retaliation, myriad claims of discrimination under state law, and federal claims for violations of FMLA and ADA, which likely have nothing to do with Plaintiff’s sexual orientation.

Gannett and KTHV filed their Motion to Dismiss late last week in the litigation recently commenced by an aggrieved former sports reporter.  Among other arguments, the station group argues that any oral promises made to the Plaintiff are of no legal significance because of the written contracts that he signed and the “merger” clause (also called “integration” clause) contained therein.

In making this argument, the station group attached an affidavit, including all of the Plaintiff’s employment agreements.  They are linked here.

1.  By way of observation, I wish to point out that Gannett filed these contracts without first moving the Court to seal the record.  The effect of this is to introduce into the public record agreements which might contain sensitive information and which might ordinarily be confidential.  I suspect that at least one effect of doing this may be that Gannett has waived any later claim of confidentiality in these documents.

2.  I am posting this particular update not to express any opinion about the Motion to Dismiss, but to point to the power of the merger clause.

In this case, the provision is paragraph 19 of the Agreement and reads as follows:

Entire Agreement.  This Agreement contains the entire agreement of Talent and Station and cancels and supersedes all prior agreements and understandings relating to the employment of Talent by Station.  This Agreement may be changed only in a writing signed by Station and Talent.  The defined terms used in this Agreement have the meanings described herein and in the Letter Agreement.  The parties have executed this Agreement as of the day and year show on the attached Letter Agreement between Station and Talent.

I placed in bold the two sentences you must consider.  In its simplest sense, this means that any oral promises made to Talent by Station are superseded by the written agreement.  It is the rare contract these days that does not include such a provision.  While there are exceptions to every rule (fraud, detrimental reliance, etc.), this case and this Motion show the importance of trying to memorialize those contract terms which are important to you in writing.  Do not take for granted that an employer’s oral promise of promotion, shift change, transfer, or other opportunity is enforceable in the face of one of these provisions.

In this case, the Plaintiff argues that he was promised certain promotions and that he relied on these promises.  The station’s Motion to Dismiss says, among other things, hey, it doesn’t matter what was promised orally, because you signed a written contract AGREEING that oral promises are not enforceable.

This is a reminder that every paragraph in an agreement has some effect.  Again, I am not opining on the merits of this Motion or suggesting that it is a death blow.  There are certainly exceptions to the binding power of this provision.  For example, an allegation that an employer engaged in fraud when he made certain oral promises is an exception in many jurisdictions.

Note:  I am not addressing the other legal arguments in the Motion to Dismiss here, which focus primarily on whether the Plaintiff meets certain pleading standards.

For a new journalist, or for one working in a small to mid-sized broadcast market, a call from a talent agent can be as exciting as a job offer. Right or wrong, new journalists rely on agents for their ability to “place” them in good jobs as much, if not more, as they do to protect their interests or to negotiate their contracts.

In general, most U.S. states do not regulate talent agents. There are exceptions: some states require licensure as a talent agency, or registration as an employment agency. Some states have bond requirements. Tennessee and Mississippi have no such requirements. Arkansas, interestingly, does require employment agencies to register with the state Department of Labor and imposes penalties for failing to do so. That said, I am told this is rarely-to-never enforced.

Because journalists often make long-term commitments when retaining agents, I thought it would be helpful to summarize the many pros and occasional cons of agency representation. They are organized in the order in which I think journalists rank their value, but this sequence does not necessarily reflect the actual value to be gained from hiring an agent (which I believe is the agent’s ability and authority to negotiate for you).

Pros:

Headhunter. First and foremost, the best agents and agencies have good relationships with people in the business of hiring. An established agent is familiar with news directors and corporate officers (who may have once been news managers). They know when vacancies at particular stations are about to occur, either as a result of these relationships or because they are, themselves, moving one of their own clients out. For example, if our hypothetical agent represents the investigative reporter at Station A, and places him in a new job at Station B, he knows (perhaps before even the news director at Station A) that Station A is about to have an investigative vacancy. He is then, in theory, uniquely poised to pitch one of his other clients as a candidate for the pending vacancy at Station A.

It is my belief, albeit untested, that this is the primary reason young journalists hire agents. They hope and expect that the agent will place them in a good position in a challenging marketplace, and then move them up to larger and larger markets at the end of each contract cycle. While this may occur, it is an enormous burden to place on an agent, and probably deprecates the real value they bring to the relationship.

Negotiation. Many agents are lawyers; many are not. Many large agencies have lawyers on staff. Even non-lawyer agents are familiar with the common issues facing employees in broadcast contract negotiations and are familiar with those employment conditions which may be alterable or negotiated. An agent who has a pre-existing relationship with a particular employer can perhaps use that relationship to your advantage (assuming it is positive). An agent can and should make demands/requests that you, as a prospective employee, are not comfortable making. After all, you are the one who is going to have to face that news director every day. The agent can be the “bad” guy, the demanding one. I would bet that unrepresented employees more frequently accept the initial offer as stated, whereas represented employees, more often than not, are able to negotiate even moderately improved terms.

In my view, this is the true value of a talent agent, lawyer or non-lawyer. Remember that you are going to have to live with your contract for two to three years. If we accept as true that most young employment candidates do not possess the confidence to “negotiate” for themselves, it follows then that good representation can improve your circumstances for a significant period of time.

It is also true that there remain many employers who flat-out refuse to negotiate with agents or attorneys. They will only negotiate with the candidate. In my mind, this situation typifies the imbalances that exist in the broadcast industry, and strips the candidate of what little bargaining power he may actually have. Now, he is left alone, in an intensely competitive marketplace, negotiating with a strong-willed employer for a job coveted by many, many others. This situation is real, however, and you should be prepared for it.

Career guidance/management. Most, if not all, talent agents routinely engage their clients in reviews of their work. They give advice about writing, delivery, editing, presentation, voice, etc. In many instances, they will cut reels for their clients; the client sends stories periodically and the agency cuts together a resume reel, which will then be forwarded on by the agent to prospective employers. Agents offer therapy when conflicts arise between you and your boss. They offer advice about dispute resolution. They offer encouragement when necessary and affirmation when and where appropriate.

Taxes. At one point, some of the larger agencies also offered end of year tax services through their lawyers and CPA’s on staff. This was offered gratis to more significant clients. While this may still occur, I suspect it is the minority of clients who enjoy this benefit.

Cons:

Commissions. Agents usually operate on a commission basis, although there are exceptions to this rule. When commissions are involved, agency contracts usually entitle the agent to five to ten percent of your monthly gross wages. In my experience, middle market clients usually should expect to pay an average of seven percent, give or take. Some of the larger market and network clients may be bound to agreements requiring them to pay their agents ten percent (see Geraldo Rivera’s agreement).

Many agencies will require your employer to send your paychecks directly to them, from which they extract their pre-tax percentage, and from which they remit your balance. This can be disquieting to some, but it happens.

In some cases, the commission rate is negotiable.

I should also mention that there are some agents who do not charge commissions. I suspect that these are lawyers, who will bill you by the hour for their legal services (or who may bill flat rates for specific services). Rick Carr, who works out of Denver, is evidently one of these lawyers. His web site is tvcontract.com. I do not know Rick, but his web site was recently brought to my attention and appears to describe this situation.

Commissions that survive the initial contract cycle. Many, if not most commission-based agent agreements provide that if the agent is involved in placing you at Station A, and you renew with Station A at the end of your contract cycle, the agent remains entitled to receive commissions for as long as you stay there.

Surely, this is fair, if the agent is continuing to provide services to you during your time at Station A. Imagine, however, the scenario, where an agent gets you that first job and then does nothing else for you for 10 years, either because you are now able to negotiate your own renewals, or because the new News Director has an anti-agent attitude. Should you still have to give that agent 7% of your salary even though he or she had nothing to do with your renewal/s?

While I think strong legal arguments could be made about the lack of consideration (that thing you are getting from the agent in exchange for his commission), the only way you are going to get out of that obligation is to sue your agent or separate (by agreement) from your agent.

I mention this scenario because it certainly does arise with some frequency and may be frustrating for many clients who do not want to get sideways with their agent or agency. In my experience, most agents are reasonable about this issue. Like you, agents have reputations to protect. They want people to hire them and, most importantly, they want their clients (and prospective clients) to trust them and to contribute to the good will associated with their agency. If you are in a situation like this, and it does not feel fair, talk to your agent about it. In most cases, I believe your agent will find a way to do the right thing. In my opinion, if the agent has provided you any of the services described above (negotiation, career guidance, tape review, advice, etc.) then he or she is probably entitled to continuing commissions, even if he or she was not directly involved in your most recent contract renewal. By contrast, if you have not heard from your agent for ten years, other than to receive invoice-related correspondence, you may have an argument for separation and you should discuss this with your agent.

Agents want to preserve good relationships. It may seem strange that I’ve included this as a con, because it is also a pro. It is nevertheless a truism that for an agent to be successful, he must maintain strong relationships with those on the employment side. Clients know this and it has, traditionally, raised questions about whether the agent is truly always going to act in the client’s best interest when to do so may alienate the agent from a particular news director.

Obviously, an agent should act in his client’s best interests. Lawyers have legally enforceable duties to do so. As a result of this perceived “conflict” though, clients sometimes worry when things get tough, whether their agent will go to the mattresses.

Imagine you are fired from a large market station and your employer offers you a sum of money in exchange for your release of your right to sue them for some form of discrimination. Your agent will probably get involved in trying to negotiate an appropriate sum – i.e., the settlement. What if you cannot agree or feel you have a strong legal claim for employment discrimination? I have not investigated this, but I suspect that your agent may not want to have his or her agency represent you in bringing suit against a media group. My suspicion is that they may help you to evaluate the risks and benefits of bringing suit, that they will refer you out to a law firm, and that they will not be involved in any way in paying for your legal action. I have reviewed a number of agent contracts and have never seen a provision whereby an agent agrees to bring suit on your behalf. That is not to say they do not exist, just that I have not seen one.

To be clear, I think the agent’s goal when their client is fired is to avoid litigation. The industry is small and litigation can be expensive and damaging. I think good agents can get good results for their clients without having to commence an EEOC charge or litigation. That said, when companies become unreasonable or intractable, an agent unwilling to become adverse with your employer may become powerless to improve your circumstances.

The purpose of this post is not to confuse, but rather to set forth the competing arguments for and against hiring an agent.  These are the issues you should expect to face and the concerns you should expect to have.  A good agent can be fantastic for your career.  As with your employment agreement though, you will likely be asked to commit contractually to that agent for a fixed period of time.  Your relationship with your agent will be better and stronger if you have considered these issues beforehand.

In February, I told you about a class action suit against Fisher and Sinclair over alleged FLSA violations.  At issue in that suit, and of concern to many broadcast groups, is whether certain classes of journalists are exempt under the FLSA’s overtime requirements.

You can read my original post here.

In March, the broadcast groups answered the Complaint and responded with two short, but meaningful Counterclaims.  You can read the Answer and Counterclaims here.  Simply put, Sinclair and Fisher are asking for prevailing party’s attorney’s fees under Oregon Statute, if the Plaintiff class loses its case.

The Counterclaims:

1. Defendants incorporate all of the matters admitted and alleged above. Defendants are entitled to their reasonable attorney’s fees under ORS 653.055(4), to the extent that
 ORS 653.055 applies, and to the extent Defendants are the prevailing party on claims under 
ORS 653.055.

2. Defendants are entitled to reasonable attorney’s fees under ORS 20.105, to the extent it is the prevailing party on claims and grounds asserted by Plaintiff without an objectively reasonable basis.

This is significant because it effectively shifts the behind-the-scenes burden back to the Plaintiffs to make sure their suit is not frivolous.  Often, plaintiffs’ attorneys will take cases like these on a contingency basis (NB:  I know NOTHING about the nature of the payment arrangement in this case).  As a result of the Counterclaims, the Plaintiffs now have real exposure of having to actually spend significant amounts of money if they lose.

Of the above two statutes cited, the second one is far more broad (and subjective):

(1) In any civil action, suit or other proceeding in a circuit court or the Oregon Tax Court, or in any civil appeal to or review by the Court of Appeals or Supreme Court, the court shall award reasonable attorney fees to a party against whom a claim, defense or ground for appeal or review is asserted, if that party is a prevailing party in the proceeding and to be paid by the party asserting the claim, defense or ground, upon a finding by the court that the party willfully disobeyed a court order or that there was no objectively reasonable basis for asserting the claim, defense or ground for appeal.

(emphasis added).