Archive for the ‘merger clause’ tag
The following is provided for educational purposes only and is designed to identify the key terms that are ubiquitous in broadcast employment agreements. At various points during this summary, I will highlight those items that may be negotiable, recognizing, of course, that new journalists are generally approaching the business relationship from a weaker bargaining position because these jobs are in such high demand.
Job Description/Duties: This is obviously going to be a provision of significant importance to someone who wants to appear on-air. Increasingly, broadcast contracts that include a description of your “job duties” will only describe you as an “employee” and not as an on-air reporter, or mainline anchorperson (for example). The reasons for this favor the employer: They do not want to hire you for an on-air position only to find that your employment in that capacity does not work out for some reason. At the start of your career, you should expect to find contract language that basically requires you to commit to work exclusively as an employee for your new employer to perform full-times services “as reasonably may be required by Company” in the employer’s discretion. It means what it says.
While you may be responding to a job posting for a dayside reporter position, your contract will likely only establish that you are an employee, hired to do whatever the company needs you to do. I should add that you will rarely see an employer agree to contract language that sets forth your shift. If things change, they will want to retain the flexibility to move you around. If, for example, you have become a lead story reporter, working Monday through Friday dayside, and the weekend reporter quits, you may be reassigned to work weekends indefinitely. That said, in larger markets, employers may be willing to negotiate this language. I am certainly aware of reporters whose contracts provide that they are being retained as “investigative reporters” or anchors who are hired to “anchor”. In these cases, the contracts usually provide that if the employer elects to reassign you, the contract “re-opens” for further negotiation (and new payment terms are ostensibly negotiated). Again, this is the exception to the rule. The general rule, particularly when you are starting out, is that the company is hiring you to do whatever it needs you to do during the “term” of the agreement.
Additionally, I’ve written elsewhere on this web site, there is a legal divide over whether journalists should be entitled to overtime under the Fair Labor Standards Act (“FLSA”). For this reason, and DESPITE the fact that the potential employer is unlikely to “name” your job title in the employment agreement, you are increasingly likely to see language in the agreement whereby you agree that you are “exempt” from the overtime requirements under the FLSA. Legally, your agreement to being classified as “exempt” does not let the employer off the hook for violating federal law (i.e., if you should be getting overtime, and are not), but you should nevertheless keep an eye out for this language and know what it means. If you are “exempt”, your new employer does not have to pay you overtime. If you are non-exempt, then you are likely to be paid an hourly rate and asked to keep track of your time on a weekly basis. For this reason, many broadcast companies are including language in their employment agreements requiring you to agree that you are exempt. The thinking, I suppose, is that if you agree to such language in the contract, you may hesitate to sue under the FLSA for overtime you SHOULD have been paid. While it may have a chilling effect on potential lawsuits, you cannot “contract away” your FLSA rights under federal law.
Term: This refers to the “length” of your employment and the standard employment agreement in the broadcast industry typically lasts from two to three years. Much to the chagrin of young journalists, who simply want to build a tape and move on to larger markets, the stations want to hold on to you for as long as they can. Remember, the longer you are there, the more valuable you become to them. Just as you learn how to use the equipment, how to pitch and develop story ideas, and how to generate stories, the community learns to recognize your face. Even in markets which do not rely on Nielsen meters, but which conduct occasional surveys, viewers are asked about who they remember, who they identify with a particular station. This is why you are not likely to encounter a one-year employment agreement. It is simply not worth it for a news department to teach the community that it can trust you, to make you a part of that station’s brand, only to have you disappear. Admittedly, the length of these agreements often intimidates young journalists, particularly because they are moving to small, remote cities to launch their careers. Depending on who the potential employer is, you may be able to negotiate certain “outs”, which could have the effect of releasing you from your employment upon the occurrence of a particular event (a job offer from a top-75 market, a spousal relocation, or a job offer from a non-broadcast related employer, for example). In my experience, small market employers understand the motility in the industry, and are often willing to negotiate reasonable “market-specific” outs into broadcast agreements. So, for example, if you sign a three-year deal in Market 170, the employer may agree to give you an “out” (or release you) during your third year, if you can show that you have a bona fide job offer from a station in a top-100 market.
Salary or rate of pay: This is typically the “hot” item for young journalists, who believe that if they can negotiate an additional two or three thousand dollars in annual compensation, the other contract provisions become less important. The truth of the matter is that entry level salaries have always been low, regardless of your pedigree. For your first job in a small market, you should expect to make from $18,000 to $28,000, the greater amounts typically reserved for line producers or specialty reporters/anchors. In 2011, a survey of recent journalism graduates found median salaries hovered in the $30k range. Typically, your first contract will also offer nominal percentage (3-5%) increases from year to year. Stations (and station groups) differ in their flexibility on compensation. First, there is the group of stations that will not budge. They have a line-item on their budget for new reporters and they will not let their news directors stray from it. Next, there is a group of news directors who have a lot of flexibility. They will make you a low-end offer with the expectation that they may have to come up a bit (and will leave some money aside just in case). Depending on the timing, their needs and your appeal to them, they may even exceed what they have set aside. The truth is that most new reporters do not attempt to negotiate, but are so grateful for the opportunity and so fearful of alienating an interested employer, that they pounce at the first offer. It is my opinion that you should ALWAYS find a delicate way of asking the offeror if there is any flexibility in their contract, because there usually is somewhere. Finally, there is, increasingly, a group of employers who are hiring new talent as non-exempt employees (under the FLSA) with offers of hourly pay plus overtime. Like salary, hourly rates may be negotiable as well. I think this is where television compensation is going and I do not think it is a terrible thing. You will most definitely work overtime; it always feels better to be compensated for it.
Vacation: Traditionally, the most you can expect here is two weeks per year. Increasingly, stations are requiring employees to “earn” vacation time through weeks or months worked, which means you do not get to take it until you have been there for a certain amount of time. The effect is that you will likely work your first six months without getting a week off. Alternatively, a number of station groups have adopted a “paid time off” (“PTO”) structure, which basically gives you a certain amount of time off each year which includes sick time and vacation time. You use it however you want to use it, but once you have exceeded your PTO, you are taking time off without being paid for it. Because variances in vacation agreements make scheduling news staff difficult, employers are often uncomfortable about negotiating this. That said, you will often hear stories about the longtime anchors who have contractual agreements to be off on their birthday every year, or a particular holiday. Vacation time IS negotiable, but for new journalists, it may be a hard pitch.
Re-Assignability: This is an area about which new journalists should be sensitive. It is very, very common for employers to reserve the right to re-assign you. As mentioned above, this makes sense from a management standpoint. If I hire you to be a reporter, and only discover after hiring you that you cannot write, or cannot get through a live shot without stumbling over yourself, why should I be contractually required to keep putting you on my air? You can understand this logic. The problem is that it has resulted in language that grants very broad discretion to employers to reassign people. Executive producers get re-assigned to produce overnight shows. Anchors become one-man bands. Horror stories abound about re-assignment. Such provisions usually require you to “perform such other duties including, without limitation, producing, photography/videography, editing, writing, reporting, managing assignments, as well as other newsroom tasks as may be identified by Employer in Employer’s sole and absolute discretion.” This almost always appears in a broadcast contract in one form or another. Although there are various legal theories that might support a claim based on an oral promise, you should know that when you sign an employment agreement, you are agreeing to the language contained within the four corners of the agreement, and NOT to any oral promises made to you by the news director.
In fact, there is usually a provision in employment agreements that says just this; it is called a merger clause or an integration clause, and usually appears under the heading “Entire Agreement.” The idea of this provision is that you are contractually agreeing that this writing – the contract – represents the entire agreement between the parties.
Work for Hire: This is a provision that is not new to the world of contracts, but has been popping up in broadcast employment agreements with greater frequency. It derives from the concept that when you create something, you ordinarily own the copyright interest in that something. Increasingly, broadcast agreements have these provisions where you agree that anything you create, during the scope of your employment, belongs to the company (and not you). For example, if you come up with a great franchise idea while on the job? It belongs to the station. What if you are a reporter who has created a personal blog? Depending on the express language of this provision (and whether you created and contributed to your blog on your own time), that blog might just be the intellectual property of the station.
Termination for “Cause”: This usually comprises an entire section in employment agreements and it provides for when you can be fired for cause (as opposed to being fired for no reason at all). You need to be concerned with how “cause” is defined. Ordinarily, it includes a breach of the agreement, including a refusal to perform assigned tasks, failure to comply with handbook policies, conduct which hurts the reputation of the employer (think DUI), insubordination, criminal conduct, etc. You get the picture. The problem arises when employment agreements include even broader language in their definitions of cause. I recently reviewed a contract that provided that an employer could fire an employee if the newscast to which he was assigned was eliminated. Other contracts include “ethical lapses” in the definition of “cause.” Obviously, the broader the language, the more SUBJECTIVE the language, the more discretion the employer has to terminate you for cause, even if it is undeserved. You should read closely this section in your employment agreement and understand just how much latitude you are giving your new boss to terminate you. If they fire you for cause, you are not ordinarily entitled to any severance benefits and, depending on state law and the station’s stated reason for dismissing you, may be ineligible for unemployment.
Termination w/out Cause: This is the other route to termination. Stations almost always reserve the right to let you go, for no reason at all, with a certain amount of notice. In my experience, this usually IS negotiable, and you should give some thought to this before you sign. This provision usually says that the station may fire you at any time without cause, “with no less than ___ days prior written notice, or in lieu of such notice, upon payment of the base salary for such notice period.” If your employer decides to let you go, but has no good reason to do it, this provision effectively allows him to buy you out. This happens a lot and, where salary may not be negotiable, this may very well be.
Liquidated Damages: The concept behind liquidated damages provisions is to acknowledge that when you first hire someone you have no true sense of what damage will be caused to you in the event of their breach. Translated: If I hire John Smith tomorrow to be my reporter for the next three years and he breaches the contract in year two (and quits), I cannot say with any certainty how much damage his quitting will cost me. Perhaps I have promoted him to main anchor? Perhaps I have spent enormous amounts of promotional time marketing him? Perhaps he broke a huge national story and the community loves him?
Conversely, perhaps he is a dud. Perhaps, I planned big things for him, but he just could not deliver, or my budget was cut, or he started phoning it in.
Courts loathe uncertainty in contract damages and so a “liquidated damages” provision is an attempt by the parties to agree, AT THE TIME OF CONTRACT, to a reasonably foreseeable damages amount in the event of a subsequent breach by the employee.
Particularly with new journalists, this is a difficult number to predict. An employer should try to anticipate their plans for the employee, both in terms of assignment and marketing, and should try to fairly and reasonably estimate what it would cost them if the employee walked out. Because this is basically the employee’s legal way to buy himself out of a contract, employers will sometimes make these amounts unmanageable. For example, you may be hired as a $22,000 per year general assignment reporter with a $10,000 liquidated damages provision. Why should you have to pay that much to get out of your agreement? Has the employer really invested that much in you? Will it cost them that much to recruit someone to replace you? Or, altenatively, is the employer just trying to prohibit you from leaving?
Pay attention to this language! It may be negotiable and, particularly during your early years, your ability to move on may be directly tethered to this amount.
“Outs”: These usually never appear in a first offer, but are often available upon request. The concept is that you are bound to the contract as it stands, unless some specific event arises which would allow you to resign without breach. If you find the potential employer is not budging on salary or liquidated damages, you might consider requesting one of these narrow-drafted “outs” to be added to your agreement. An example of “out” language is as follows: “Station agrees that at anytime during this agreement, if the Employee receives a written offer of full-time employment from a television station located within any of the fifty (50) largest television markets in the U.S. which does not compete with Station, it will permit the Employee to be released from his employment obligation with Station upon sixty (60) days written notice.” Stations may be amenable to giving you an “out” if it is sufficiently narrow and tailored to you, and does not put them in a position of establishing a murky precedent. You need to be creative here. Market outs, like the one I described above, are common. Imagine your potential employer will not agree to give you a top-50 market out. Perhaps, if you explain that there is one specific market, where your family is, the employer will let you have an out in the event you get an offer there. Perhaps you can persuade the employer to give you an out if your spouse is professionally relocated or if your mother’s hypothetical illness worsens or if you get an offer from an East Coast employer or if you leave the business. These are all things to consider as you decide whether to consider making a two to three year commitment.
Non-Competition: You should expect to see a non-compete provision in any broadcast employment agreement you sign, even if it is for part-time work. In practice, these provisions prevent you from going to a competitor in the same market. While they are always operative DURING the term of your agreement, their power is the fact that they SURVIVE the termination of your agreement. Typically, an on-air reporter may sign a non-compete that precludes him from going to work for a competitor for six months after the end of his employment. Television lore is rife with stories about reporters who “cross the street” after their contracts are up and are made to “wait out their non-competes.”
You should know that non-compete agreements, formally called restrictive covenants, are often disputed under state law in different industries. Courts try to figure out whether they are reasonable limitations on time and geography, while balancing the right of an individual to earn a living with that individual’s possession of proprietary station knowledge (and the risk they will take it across the street). You can read more about them elsewhere on this site. Simply put, an unreasonable non-compete is likely not enforceable in a court of law, but the question of reasonableness is one for the court to measure. So, one party has to take it to court to enforce it or for a declaratory judgment that it is unenforceable. The employees cannot typically afford lawyers to do this and stations rarely sue to enforce. These provisions nevertheless have a chilling effect. Competitors are often rightfully leery about messing with job candidates from across the street who have non-compete agreements. Usually, when disputes arise over these provisions, they are therefore resolved informally between station and employee (via settlement).
Regardless, you need to pay close attention to the non-compete in your employment agreement. You need to know what it means. If you are working in a city you love, but which only has three television stations, your non-compete will affect your ability to leverage yourself with your current employer because they know you cannot easily cross the street. Additionally, many non-competes are drafted to survive the termination of an employment agreement EVEN IF YOU ARE TERMINATED. In other words, the station can decide it does not want you anymore and can, simultaneously, prevent you from going to a competitor. Again, this is a murky area of the law; ultimately, a court will have to decide if such a restriction is “reasonable” in light of the circumstances at play.
Conflict resolution/Choice of Law: Briefly, this is a provision that usually falls at the end of your employment contract which seeks to control how the parties manage disputes in the event of a breach, or a termination, etc. The basic provision will say that all disputes should be tried by a court of law in the state where the station sits. I have also seen provisions which designate the state where the corporate parent is located (which will certainly inconvience the employee). Imagine if you feel you’ve been retaliated against in Georgia, but this provision says you can only sue in an Illinois state court. Increasingly too, employment contracts include arbitration provisions, which basically prevent you from suing all together. Instead, you have to go through an arbitral procedure, which can be expensive and slow, and which might favor the employer.
This is generally non-negotiable and typically part of a station group’s boilerplate employment agreement. You should, nevertheless, know what your agreement will allow you to do if a problem arises.
What happens at the end: Obviously, your contract is going to have an expiration date. This is the end of the “Term.” Some agreements will go into detail about what happens after that point. Do you have to give notice even if your contract is set to automatically expire? Will it automatically renew if you do not? Some contracts provide for short-term continuation agreements and some provide for automatic year-to-year renewals. Some companies also retain a right of “last refusal” in the event you get an offer from a new employer at the end of your term with the first employer. You must be sensitive to this before the critical time comes, so that you know how to comply and how to accurately represent your availability to your next potential employer.
Conclusion: I recognize that the jobs are few and the candidates are many. There is a legal concept that envisions agreements such as these, particularly where the effect is to deprive the employee of any real bargaining power, where you feel you have no choice but to accept the deal (to “take it or leave it”). These are called “contracts of adhesion” and, unfortunately, they comprise a large part of the dealing in this industry. If you are mindful about the various moving parts however, and if you can learn to negotiate without overreaching, you can turn an unreasonable agreement into something tolerable and even beneficial.