#MeToo Challenges Confidentiality and Nondisclosure Agreements

#MeToo Challenges Confidentiality and Nondisclosure Agreements

By:  Ann Fromholz

May 9, 2018

This article was originally published in Los Angeles Lawyer.

Revelations about sexual misconduct in the workplace have dominated the national conversation in recent months. In early October 2017, The New York Times and The New Yorker published detailed exposés regarding the alleged serial sexual abuse of women in the entertainment industry by producer Harvey Weinstein and an elaborate cover-up system that included secret payoffs, legal threats, nondisclosure agreements, and other intimidation tactics. The reports, along with an increased number of victims willing to put their names “on the record” (whether in the press or on social media), cracked open a floodgate of allegations against powerful men across industries, including hospitality, journalism, tech, and law.

In mid-October 2017—less than two weeks after the Weinstein stories were published—approximately 140 women, including state legislators, senior legislative aides, and lobbyists, signed on to a letter complaining of rampant sexual misconduct in California’s capitol. The letter described groping, other unwanted sexual advances, and quid pro quo sex harassment by men in positions of power in the state legislature.

The #MeToo movement has exposed untold numbers of allegations of sexual harassment and resulted in serious consequences for the alleged perpetrators, ranging from criminal investigations to job loss or public disgrace. Yet, there are many more cases that have not seen the light of day (or social media) because of private contractual obligations and the fear of legal retribution.

In the wake of this cultural reckoning, more people (and law- makers, in particular) have begun to question the use of nondis- closure agreements and confidentiality agreements in cases of sexual assault or harassment. Do the provisions that buy secrecy enable harassers and permit continued abuse?

Confidentiality Provisions

Confidentiality provisions are a common and material component of nearly every settlement agreement resolving a legal dispute. In settlement agreements regarding an employee’s allegations of sexual harassment or other unlawful discrimination, a confidentiality provision frequently prohibits the employee from disclosing to anyone any details about the settlement or any facts that led up to the settlement. Exceptions may be negotiated for disclosures to the employee’s spouse, attorneys, or tax advisors. It is not uncommon for these provisions to be one-sided—in other words, only the complainant is prohibited from disclosure. Sometimes, these provisions also provide an exception for the employee to be able to testify truthfully if subpoenaed for deposition or trial (but sometimes they do not).

In other cases, the lawyers negotiating these confidentiality provisions on behalf of the defendant organization or employer may try to extend the confidentiality provision to the lawyer representing the complainant. A provision preventing the lawyer from representing other employees with complaints against the defendant or employer, however, may be an unlawful restraint on the attorney’s right to practice law.

Under Title VII of the Civil Rights Act, settlement agreements in employment cases that prohibit employees from filing charges with or assisting the Equal Employment Opportunity Commission (EEOC) in its investigations are unlawful. As the U.S. Court of Appeals for the First Circuit explained: “[T]he EEOC acts not only on behalf of private parties but also ‘to vindicate the public interest in preventing employment discrimination.’” Therefore, settlement agreements that prohibit employees from filing charges or assisting with investigations could impede the enforcement of Title VII. The First Circuit explained that “[i]n many cases of widespread discrimination, victims suffer in silence. In such instances, a sprinkling of settlement agreements that contain stipulations prohibiting cooperation with the EEOC could effectively thwart an agency investigation.”

In December 2017, amidst the barrage of revelations regarding continued sexual misconduct across industries—and related cover- ups—EEOC Commissioner Chai Feldblum said that the EEOC will be closely watching settlement agreements to ensure that such agreements do not prohibit employees from filing an EEOC charge relating to sexual harassment (or to any other protected status). “It is important for employers to know that we are looking at these agreements,” Feldblum told Reuters. Feldman stated in the same interview that the EEOC will be scrutinizing settlements that include nondisclosure agreements, in order to ensure that accusers are not being unlawfully barred from filing complaints with the commission.

A confidentiality provision is generally a material—and, so far, lawful—part of a settlement agreement that protects an employer’s interests. To many employers and their counsel, the absence of a confidentiality provision in any settlement agreement could be a deal breaker. However, the employer must be careful in drafting the language. The confidentiality provision should make clear that, despite the confidentiality obligation, an employee is still allowed to file a charge with the EEOC (or to participate in an EEOC investigation).

Nondisclosure Agreements

Aside from confidentiality provisions entered into as part of a settlement of a claim, some employers require their employees to sign nondisclosure or non-disparagement agreements as a condition of employment. These clauses can also be quite broad. For example, The New York Times reported that “Mr. Weinstein enforced a code of silence; employees of the Weinstein Company have contracts saying they will not criticize it or its leaders in a way that could harm its ‘business reputation’ or ‘any employee’s personal reputation,’ a recent document shows.”

Preemployment nondisclosure agreements are prevalent in the entertainment industry where salacious details about the private lives of public figures can easily be sold to tabloids for a significant profit. These types of nondisclosure agreements are also common in positions of employment related to public figures in other fields.

Confidentiality agreements concerning trade secrets and other proprietary business information have a legitimate business purpose in protecting a company’s profitability and commercial investments. How- ever, recent revelations about the potential for misuse and abuse of mandatory confidentiality agreements in employment have opened a discussion about whether and when broader agreements relating to confidentiality and nondisclosure might be contrary to public policy or law.

Broad non-disparagement or nondisclosure agreements may run afoul of federal labor law, for starters. The National Labor Relations Act (NLRA) makes it unlawful for employers to prevent workers from talking about the terms and conditions of their employment. Section 7 of the NLRA protects the rights of workers to engage in concerted activity. This activity is known in labor law parlance as protected concerted activity, and the protections of Section 7 apply to both union and nonunion work- places.

The National Labor Relations Board (NLRB) has held that discussions of, and gripes about, wages are protected concerted activity. Even individual complaints that employees make to each other—without any intent to engage in group action—are per se protected under the NLRA. In recent years, the NLRB has emphasized that employee complaints on social media about their workplaces are protected concerted activity. Specifically, the NLRB held that an employer may not maintain a policy that prohibits employees from making disparaging, false, or misleading statements on social media and elsewhere.

This NLRB rule also means that an employer may not prohibit an employee from making complaints about sexual harassment on social media or elsewhere. What then of non-disparagement provisions that are in some employment con- tracts? They are prohibited, too. Section 8(a)(1) of the NLRA makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the NLRA. It is an unfair labor practice—a violation of Section 8(a)(1) of the NLRA—for an employer to require its employees to agree not to “publicly criticize, ridicule, disparage or defame” a company or its “directors, officers, shareholders, or employees.”

Despite this prohibition under federal labor law, some employers require such non-disparagement or nondisclosure agreements to be signed as a mandatory condition of employment. Yet, California Labor Code Section 432.5 provides that employers cannot compel an employee to agree, in writing, to any term or condition known to be prohibited by law.

The provisions also might be unconscionable and therefore unenforceable under California law because of an imbalance of power between the employer and the employee or if the employee did not have a meaningful opportunity to negotiate the provisions. Unconscionability has both a procedural and a substantive element: “[T]he former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.” In addition, a person who is fired for refusing to sign an unlawful nondisclosure agreement—or for violating one—may have a claim for wrongful termination in violation of public policy under California law.

Often, nondisclosure or confidentiality provisions in settlement agreements contain “liquidated damages” clauses. These clauses provide that, in the event of a breach, the damages will be set at a pre-determined amount. The liquidated dam- ages might be set at a percentage of the settlement amount or might require that the plaintiff return the full settlement amount in the event of a breach. For example, CNN reported on one such case a few years ago in which the plaintiff in an age discrimination suit lost $80,000 in settlement proceeds because his daughter posted about the settlement on Facebook in breach of his confidentiality agreement with his former employer.

Employers explain the need for liquidated damages provisions by arguing that the damage caused by a breach, while real, can be very difficult to quantify and prove. The argument against liquidated damages, however, is that they are unnecessarily punitive on occasions when a breach of confidentiality results in no provable monetary damages. Moreover, even if there are no liquidated damages provided in the contract, the threat of being forced to defend a breach of contract lawsuit is enough to deter many individuals from speaking out.

“Me Too” Evidence

Long before the hashtag, “me too” was (and still is) a legal doctrine permitting the discovery and admissibility of evidence of similar complaints of wrong-doing against the accused in California employment cases. “Me too” evidence can bolster the credibility of a complainant if witnesses testify and provide evidence about harassment that they experienced at the hands of the same alleged harasser. For an individual prosecuting harassment cases it is critical to discover whether any previous complaints were made against the same accused and how the employer responded to those com- plaints. A plaintiff likely will seek to introduce the testimony of prior complainants to bolster his or her own case.

Under California law, “me too” evidence is also relevant to the issue of punitive damages. An employer can be liable for punitive damages if prior complaints of sex harassment or assault were known and the employer failed to respond appropriately. A prominent example of this is a case from the 1990s against one of the country’s largest law firms, Baker & McKenzie, and one of its partners.19 Six women testified at trial regarding prior complaints of bad acts by the partner. The jury awarded over $7 million in punitive damages.

From a plaintiff’s lawyer’s perspective, it is difficult or impossible to get witnesses to corroborate a client’s case by way of a voluntary declaration or through an investigative interview if the witnesses have signed nondisclosure agreements. Although the witnesses might be compelled to provide testimony under subpoena, the fear of breaching a nondisclosure agreement might result in a less than forthcoming witness.

Simultaneously, as technology and the Internet have evolved, there has been an increase in the publication of deeply personal narratives through social media networks (e.g., Facebook, Twitter, and Instagram) and various blogs. There also has been an increase in “confessional” essays through sites such as XO Jane and Jezebel. This trend does not apply just to “millennials.” Many women of every generation now are using technology to publish extremely personal details about their lives, whether on “private” Facebook groups, participating in a hashtag on Twitter, contributing to a blog, or writing a book. Ellen Pao, the high-profile plaintiff in an employment discrimination suit that included allegations of sexual harassment, wrote in her memoir that she turned down significant settlement offers because she wished to tell her side of the story.20 Increasingly, the freedom to tell the story is a right that sexual assault or harassment victims do not want to sign away.

Recent Opposition

Perhaps some of the stigma of experiencing sexual assault or harassment has been stripped away by the sheer volume of recent revelations about the prevalence of this conduct in the workplace and elsewhere. Victims in previous generations may have blamed themselves or had no desire to speak of their wrongful treatment due to feelings of shame.

A prominent example of testimony that reflects this changing attitude is that of singer-songwriter Taylor Swift. Swift recently testified at a trial regarding a DJ whom she alleged reached under her skirt and groped her buttocks during a photo op. The DJ later was found to have engaged in the groping. During trial Swift repeatedly described the incident in frank and unapologetic terms (later quipping, “I’m told it was the most amount of times the word ‘ass’ has ever been said in Color- ado federal court”). When cross-examined about how she felt when the DJ lost his job because of her complaint, Swift testified, “I am not going to allow your client to make me feel like it is any way my fault, because it isn’t.” Taylor Swift’s testimony was praised by one publication as “sharp, gutsy, and satisfying.” An increasing refusal to be shamed into silence may explain the rising value of the right to speak about one’s personal experiences with sexual harassment or assault.

Since October 2017, opposition to confidentiality provisions in cases of sexual assault or sex harassment has grown due in part to a belief that such provisions may have protected powerful predators from accountability. California Senator Connie Leyva announced that she will introduce legislation in 2018 to ban confidentiality provisions in settlement agreements in cases of sexual assault, sexual harassment, and sexual discrimination.

McKayla Maroney, an Olympic gymnast, recently filed a lawsuit regarding the confidentiality provision in her sexual abuse settlement which, she argued, would have prohibited her from testifying at the sentencing hearing of her abuser. It was reported that the confidentiality clause would have resulted in a $100,000 fine to her if breached. Maroney’s attorney argued that the agreement provided she could only testify in court if subpoenaed but could be in breach of the agreement if she gave a voluntary statement as part of the sentencing hearing. It appears USA Gymnastics ceded to public pressure after an outcry about the confidentiality provision at issue. Several public figures offered on Twitter to pay this fine for Maroney and criticized the confidentiality provision at issue. The gymnastics organization later issued a statement that it would not pursue any money from Maroney if she spoke publicly about the abuse.

Most parties to a confidentiality provision do not have a high profile, however. If an employer discovers that an employee has breached a nondisclosure or confidentiality agreement, the employer can seek to enforce contractual rights under the agreement. Unless there is a liquidated damages provision, the employer likely will need to weigh the cost of proceeding with legal action against whether it can actually be proven that the breach caused any monetary damages (and whether the employer can actually recover any damages from the employee, if proven).

Even armed with a contractual right to proceed against a former employee, some employers may still opt to avoid the public relations risk of filing suit against a victim of harassment for making truthful statements in violation of a nondisclosure or confidentiality agreement. In a high-profile case, such action might do the company more harm than good. In a low-profile case involving a smaller employer, however, legal action against a former employee for breach of a confidentiality agreement likely would not receive much, if any, media attention.

Another way companies and employers

keep allegations of sexual harassment and assault secret is through the use of mandatory arbitration provisions. These provisions have also been the subject of pro-posed legislation. California Assembly-woman Lorena Gonzalez Fletcher announced plans to introduce legislation that would prohibit mandatory arbitration of sexual harassment claims.

There is no question that employers and their counsel generally place a high value on confidentiality provisions. Confidentiality provisions can not only keep a lid on alleged bad conduct but also prohibit discovery of the price a company paid to resolve the legal dispute. As noted, companies can also use these provisions to try to prevent former claimants from becoming witnesses on behalf of subsequent claimants.

Benefit to Employee

Confidentiality provisions can also benefit employees who make a claim and settle situations in which the employees want to keep the facts of the harassment quiet. A mutual confidentiality or non-disparagement clause might also benefit an employee by protecting the employee from the difficulty that going public with a complaint against an employer—or filing a lawsuit— can do to one’s job prospects. This assumes, of course, that a settlement is reached before a lawsuit (or other publicly available document) is filed or published. Many employers conduct background checks or other research on applicants to discover, among other things, if they have ever been a party to a lawsuit. If an applicant has been a plaintiff in a lawsuit alleging dis- crimination or harassment against a former employer, this might be a deterrent to a prospective employer.

Some of these issues may become moot if proposed legislation prohibiting confidentiality provisions in settlement agreements of sex harassment or sexual assault becomes law. Even if such a law does not pass, however, it appears likely that there will be more protection of employees in California in the future. Outside of California, the EEOC has promised more over- sight of employees’ rights with respect to settlement agreements, despite the Trump administration’s efforts at deregulation.

The reignited conversations around sexual harassment in the workplace that began in October 2017 with the exposés on Harvey Weinstein have had many and varied consequences. These include a greater push for transparency and more people using the power of social media and journalism to shed light on issues otherwise hidden, confidentiality provisions notwithstanding.

Lawyers representing individuals in employment or sexual assault cases may start pushing back on the nature of the confidentiality provisions requested by defense counsel considering these recent developments. For example, confidentiality provisions might be negotiated so that only the amount of the settlement payment must be kept confidential, but the underlying facts leading up to the settlement are not subject to the restriction. Given the increased media spotlight, claimants may be less willing to sign away their right to tell their story. Companies, on the other hand, place a high value on confidentiality and likely will insist on confidentiality provisions until and unless a law prohibits it.

Hollywood’s Harassment Investigations Dogged by Lack of Consistency

Hollywood’s Harassment Investigations Dogged by Lack of Consistency

By:  Tatiana Siegel, The Hollywood Reporter

April 13, 2018

On Nov. 21, CBS News moved swiftly to fire Charlie Rose following a string of women accusing the star anchor of sexual harassment in a Washington Post article. There was an internal inquiry, and CBS News producers interviewed at least one accuser for an on-air report, but no outside investigator was hired.

Skipping an outside probe in this circumstance might seem unorthodox, especially considering the lengths to which many networks, studios and talent agencies have bent over backward to engage in by-the-book procedures in the wake of a tsunami of harassment claims inspired by the #MeToo movement. But CBS’ brisk action the day after the Post dropped its Nov. 20 story on his behavior, all of which came from his time on his eponymous PBS show, coincided with Rose’s contract: Sources say the pact ran out at the end of the year.

However, CBS did conduct a more substantive subsequent internal review, the network has said, and like most media companies, has instituted mandatory in-person harassment training and awareness programs for all employees, including on-air talent. But that all came in the aftermath of Rose’s ouster.

The Rose case illustrates the challenge many lawyers and industry insiders have observed in the months since the #MeToo era was launched by the Harvey Weinstein revelations in The New York Times and The New Yorker. The movement has touched nearly every single major company in Hollywood and has expanded beyond sexual misdeeds to now include allegations of once-accepted behaviors like yelling and abusiveness on set. Yet there is little consistency in how claims are handled and adjudicated, and many say that ambiguity is problematic for both the accusers and accused.

“Studios have no uniformity to their disciplinary and investigative processes,” says attorney Bryan Freedman of Freedman & Taitelman, whose clients include UTA. “Some have been thoughtful and have investigated claims thoroughly before making any determinations. Others have been reactionary and have taken disciplinary action immediately upon learning of an allegation without following the procedures in their employee handbooks.” In fact, Freedman predicts employers who take disciplinary actions without following their own guidelines could face legal liability down the line. “There may be significant exposure should the action taken be wrongful and without adherence to an agreed-upon process,” he adds.

At some companies, claims are investigated internally; at others, an outside investigator is hired immediately. At some outlets, employees are put on leave during a probe; at others, they aren’t. While NBC News fired Matt Lauer on Nov. 29 after a “review” of accusations against the Todayanchor, the formal investigation by NBCUniversal’s legal department, which is led by Kim Harris and is expected to interview at least 40 people, is still ongoing. Results are expected in the coming weeks, and NBC News Group chairman Andy Lack has promised that the review will include a “culture assessment” of the news division. But the question remains just how exhaustive these investigations are and, considering the financial stakes, whether the top of Hollywood’s food chain faces as much scrutiny as the bottom.

The E! wardrobe stylist who accused Ryan Seacrest of sexual harassment has alleged that the investigation that cleared the host was not thorough enough. Nearly three months after Suzie Hardy complained to E!, outside counsel hired by parent NBCUniversal completed its investigation and found “insufficient evidence to support the claims.” Hardy then went public and alleged the probe was one-sided given that investigators never contacted four witnesses she had provided who she said could corroborate parts of her story. NBCU sources argued that its investigation focused only on eyewitnesses, which would not have included people Hardy says she told of the abuse.

The kind of behavior companies are investigating varies greatly as well. Jeff Franklin was fired as showrunner of Fuller House, produced by Warner Bros. TV for Netflix, in late February after complaints of verbal abuse by the TV veteran in the writers room and on the set. Franklin, who quickly hired attorney Larry Stein to fight the allegations, was not accused of sexual harassment or physical misconduct, and it is unclear what kind of investigation Warner Bros. launched. Andrew Kreisberg, another Warner Bros. TV producer, was let go after several subordinates went public with complaints of abusiveness, but only after WBTV investigated the claims.

When it comes to getting to the heart of allegations, Latham & Watkins attorney Marvin Putnam says the best strategy is to hire outside counsel. “Inside counsel is generally seen as part of management. As such, complainants — as well as witnesses — are often reluctant to come forward or be completely forthcoming,” says Putnam, who was hired by ICM Partners to look into claims by former Fox News contributor Tamara Holder that agents discouraged her from filing a sexual assault complaint against the network. “Moreover, any finding — short of separation — can be viewed with skepticism or as outcome determinative.”

“Time is of the essence,” adds employment lawyer Ann Fromholz, who was retained by WME in early February to investigate harassment allegations against agent Philip Raskind. (Raskind remains at work during the probe, in contrast to another WME agent, Adam Venit, who was suspended without pay following a harassment investigation, then reinstated.) “I gather whatever [documents and evidence] I can before the first interview,” says Fromholz. “This all happens quickly because you need to act promptly in these cases, particularly if these people are still working together. Then I begin interviews.”

After a three-week investigation, ICM agents Steve Levine, Matt Sorger and Will Horowitz were cleared of any misconduct in the Holder case. By contrast, CAA is said to have conducted its own internal investigation into agent Cameron Mitchell, who was fired for cause in the wake of a claim by an actress that he sexually assaulted her.

Outside investigations don’t come cheap. A typical probe that runs less than a month costs in the low-six figures; the longer and more complex, the higher the tally. A number of lawyers were enlisted to vet the single claim of sexual harassment against Academy president John Bailey, including Loeb & Loeb’s Ivy Kagan Bierman, Latham & Watkins’ David Schindler (hired by Bailey) and Quinn Emanuel’s John Quinn (AMPAS’ longtime general counsel). Bailey was cleared by the Academy board two weeks after the claim was first made.

In the face of allegations against Weinstein in October, The Weinstein Co. hired Debevoise & Plimpton to conduct an independent investigation. But according to TWC bankruptcy filings, a special board committee halted the probe less than one month later when the company ran out of funds, derailing the process at its most critical juncture.

Kagan Bierman says each claim must be evaluated in its own right. “I start with the claimant. I ask if they have any witnesses, talk to the witnesses, then go to the accused and tell the person what the allegations are and give that person a chance to respond and give witnesses,” she says. “Then I sit down with the client and tell them what information and facts I have and give an assessment of the credibility of the people I’ve spoken with. The client always makes the decisions about what the resolution will be.”

Fans of hiring outside investigators say a thorough process can benefit accusers seeking justice as well as those who are falsely accused and later vindicated. And the fact that the scope of “bad behaviors” is broadening beyond sexual harassment only underscores the desire for consistency in response. In recent weeks, actor Fred Savage and Stranger Things creators Matt and Ross Duffer have been accused by female below-the-line workers of creating hostile work environments. In the case of the Duffers, Netflix said, “We looked into the concern … and found no wrongdoing.” Savage, accused by a costume designer on his short-lived series The Grinder, was cleared by Fox at the time in 2015. But he and the studio now face a lawsuit filed by the woman.

Sometimes staffers can be quizzed as part of multiple harassment probes going on simultaneously. Even before Nov. 3, when Netflix severed ties with House of Cards star Kevin Spacey after mounting allegations of sexual harassment, series staffers were receiving calls from an investigator asking about Cards co-star Robin Wright.

A Cards crewmember, a woman in the costume department, had lodged a formal complaint against Wright, accusing the actress of striking her during a fitting several months earlier. Sources say MRC, the show’s producer (which shares a parent company with THR), immediately launched an internal investigation, found no wrongdoing on the part of Wright and considers the matter closed. However, MRC’s investigation into Spacey remains open while the studio attempts to thoroughly follow up on all leads and complaints.

Lawyers say consistency is important because investigations are now the new normal in Hollywood. Notes Kagan Bierman, “Many claimants just want to be heard, want it to be taken seriously, want it to be investigated and want a resolution that works for them.”

Ashley Cullins and Marisa Guthrie contributed to this report.

 

No More Quotes: How A Salary History Law Is Changing Hollywood For Women

No More Quotes: How A Salary History Law Is Changing Hollywood For Women

By:  Natalie Robehmed

April 11, 2018

Hollywood has a new way of negotiating talent deals — and it seems to be helping women.

A California-wide law that took effect in January prevents all employers from asking potential employees for their salary history. In corporate workplaces, it’s altered the tempo of traditional compensation discussions. But in entertainment, it’s rewritten the playbook for agents and studio executives who have long used quotes to establish pay.

“It’s totally changed how the negotiating process is taking place,” said one agency insider.

An actor’s quote is what they were paid for their most recent gig. Their agent will typically advocate for an incremental increase with each job, ranging from $2,500 to seven figures, depending on the medium, an actor’s experience and popularity. The more work an actor gets, the more they are able to build their quote.

In an industry that fills only 31% of roles with women and 29% with people of underrepresented racial and ethnic groups, such a system benefited those for whom there were many roles to fill — white men. The disparity is even worse behind the camera, where women and people of color occupied just 4% and 8% of directors’ chairs, respectively, according to recent studies by the USC Annenberg Inclusion Initiative.

That has translated to a pervasive compensation disparity between actors and actresses, even at the very top. The world’s 10 highest-paid actors banked a cumulative $488.5 million last year — nearly three times the $172.5 million combined total of the 10 top-earning women.

“[The law] is part of the effort to solve the gender pay gap,” explained employment attorney Ann Fromholz, principal at The Fromholz Firm. “The thinking is that if companies pay people based on merit, there will be more equality in pay, and if they pay them based on what they were making at their previous job, they will be liable to continue pay inequity.”

In the wake of Time’s Up and #MeToo, Hollywood has never been more attuned to wage disparity. Recent bad publicity from revelations of unequal pay between Netflix’s The Crown co-stars and Michelle Williams and Mark Wahlberg in All The Money In The World has turned up the heat. Enter Bill No. 168, which aimed to diminish the pay gap by making it illegal for a studio to ask for the quote of any employee, be they an actor, writer or director.

Previously, a studio would approach an agent with a potential deal and inquire about their client’s quote. The agent would provide the actor’s quote, citing the client’s most recent paycheck on a specific project at a rival studio. The business affairs executive at the prospective studio would then call the previous studio to verify the provided quote was accurate. Negotiations would proceed from there.

Now several agents say they have been able to pull off huge salary leaps for clients, specifically women and people of color, who have been systemically underpaid and underemployed. They cite remuneration increases of between 12% and 20% from project to project — far more than the standard incremental bumps prior to the law’s introduction.

Of course, business affairs executives have developed workarounds. Many have been using careful language to inquire about “salary expectations” or “spheres of pay.” Others with experience are already very knowledgeable about what stars receive and have been impacted minimally by the change.

If an offer comes in far below what the actor normally gets, talent can opt to release their quote by giving their agent written permission to share their salary history. “If they come in much higher than the quote, I keep my mouth shut and counter,” said another insider.

But even when quotes are provided, studios are no longer allowed to make calls to verify them, leaving the potential for more money on the table. “Because they can’t check quotes, you could make up anything you feel your client deserves,” said another longtime agent.

Others have been hurt by the law. Novice business executives using software to track projects in development can miss deals that never made it onto industry databases, such as Studio System, Variety Edge, IMDbPro and The Industry Edge. Without accurate information or previous quotes, some say, the change has led to lower offers, particularly for performers with brief track records. In the most extreme cases, initial deals have been as low as 40% of a client’s quote, according to sources.

“It seems the first reaction from companies is to offer as little as possible and then say, ‘If you want more, you have to justify it,'” said entertainment lawyer Linda Lichter, founding partner at Lichter, Grossman, Nichols, Adler & Feldman. “It has the impact of empowering the companies to be even more aggressive about keeping prices down.”

Some feel the law may backfire for women in corporate workplaces. “One of the reasons that’s always been given for the pay gap is the notion that men are more assertive and better at advocating for themselves,” said employment attorney Jack Schaedel, partner at Scali Rasmussen. “If men are more brash about demanding something, what’s to stop them from saying they make way more to influence [the employer] to pay them more?”

It’s too early to tell whether the law will tip the scales, but advocates remain optimistic that it could help finally achieve pay parity for women and minorities in entertainment.

Workplace Bullying and Harassment: What’s the Difference?

Workplace Bullying and Harassment: What’s the Difference?

By: Lisa Nagele-Piazza
March 8, 2018
HR Magazine

Workplace civility policies can cover both unlawful and inappropriate conduct

As HR professionals strive to ensure a safe and inclusive workplace for everyone, they should note that some harmful bullying behaviors that aren’t technically unlawful harassment can still be addressed in a workplace civility policy.

An employer’s policies can be more protective of employees than the law can, said Ann Fromholz, an attorney with The Fromholz Firm in Pasadena, Calif. “If having a workplace free from bullying is important to employers, they can go a long way to achieving that by modeling behavior, having a good policy and enforcing that policy.”

What Is Bullying?

Bullying is generally defined as unwelcome behavior that occurs over a period of time and is meant to harm someone who feels powerless to respond.

Verbal bullying includes teasing and threatening to cause harm, according to stopbullying.gov, a website managed by the U.S. Department of Health and Human Services.

Social bullying in the workplace might happen by leaving someone out of a meeting on purpose or publicly reprimanding someone.

A 2017 survey by the Workplace Bullying Institute estimated that 61 percent of U.S. employees are aware of abusive conduct in the workplace, 19 percent have experienced it and another 19 percent have witnessed it.

These behaviors may or may not constitute unlawful harassment. Bullying is actionable under federal law only when the basis for it is tied to a protected category, such as race or sex, explained Jessica Westerman, an attorney with Katz, Marshall & Banks in Washington, D.C. Specifically, Title VII of the Civil Rights Act of 1964 prohibits harassment on the basis of color, national origin, race, religion and sex. Other federal laws prohibit such behavior on the basis of age, disability and genetic information.

Additionally, if bullying amounts to some other civil or criminal wrong, such as assault or battery, it could amount to a claim under state law, Fromholz noted.

So a manager who is mean to everyone—who is sometimes known as the “equal opportunity harasser”—might not be engaging in unlawful conduct. But that doesn’t mean it must be tolerated in the workplace.

“Employers can have codes of conduct that address respect in the workplace and hold employees accountable if they do not treat others with respect,” Fromholz said.

State Law Trends

“In the absence of federal legislation prohibiting generic workplace bullying, several states are considering legislation that would provide severely bullied employees with a claim for damages if they can prove that they suffered mental or physical harm as a result of the bullying,” Westerman said.

Legislatures in 29 states have introduced workplace anti-bullying bills in recent years, according to the Healthy Workplace Campaign.

For example, S.B. 1013, a bill that was introduced in Massachusetts in 2017, would prohibit all “abusive conduct” against employees—even if it isn’t based on a protected characteristic.

Since Jan. 1, 2015, California businesses have been required to train supervisors on how to identify abusive conduct as part of their sexual harassment prevention training. “So far, however, there is no private right of action for bullying in the workplace,” Fromholz noted.

HR’s Role

Even without a law against general bullying, employers can create policies and practices to prevent and prohibit such behavior. Westerman suggests that employers:

  • Conduct a climate survey to learn about the problems in their particular workplace and use the survey’s findings to tailor policies and procedures to that workplace.
  • Adopt clear, written anti-bullying policies in as many languages as are spoken in the workplace.
  • Foster an organizational culture that prioritizes inclusion and doesn’t tolerate bullying by regularly demonstrating a commitment to anti-bullying policies.
  • Conduct bystander intervention training, which empowers co-workers to intervene when they witness bullying or harassing behavior. This “helps create a sense of collective responsibility for eliminating bullying and other problematic behavior in the workplace,” Westerman said.
  • Conduct workplace civility training, which may reduce the likelihood that bullying will occur by promoting respect among employees from different backgrounds and at different job levels.
  • Implement clear and straightforward procedures so that employees know how and where to report incidents. These procedures should include multiple confidential reporting channels.
  • Make an effort to maintain employees’ confidentiality throughout the investigation. If employees need to be identified, investigators should notify employees about the possibility that co-workers will learn about their complaints.

Workers who are victims of bullying or harassment should know they can promptly report incidents to their supervisors, management-level employees, human resource representatives or other employees designated to receive reports, Westerman said.

When Hollywood Offspring Land Industry Internships: “There’s a Pay-It-Forward Expectation”

When Hollywood Offspring Land Industry Internships: “There’s a Pay-It-Forward Expectation”

By: Bryn Elise Sandberg
The Hollywood Reporter
December 20, 2017

Hollywood felt pretty self-satisfied when Malia Obama famously interned on the set of HBO’s Girls in summer 2015 and then later at The Weinstein Co. (pre-Harvey scandal, of course). But generally, when powerful kids leverage their family name to get a foot in the door, the company tries to keep it quiet, as when Vice President Mike Pence’s daughter was welcomed in UTA’s agent trainee program this fall (she since has been promoted to full-time assistant).

Meanwhile, Tom Hanks’ youngest son, Truman Hanks, a student at Stanford, has secured a coveted internship at Bad Robot the past two summers, where he’s served as a production assistant on various J.J. Abrams film shoots. The twin daughters of NBC Entertainment’s Jennifer Salke and Fox 21 Television Studios’ Bert Salke interned at WME this summer; Fox Television Group chairman and CEO Dana Walden’s 17-year-old daughter spent the past two summers interning for Ryan Murphy and then 3 Arts manager Oly Obst; and former NBC Broadcasting chairman Ted Harbert’s daughter worked on the desk of Lionsgate TV Group president Sandra Stern. And in some cases, the road to a job can be as short as the family breakfast table. David Kohan’s daughter and Max Mutchnick’s niece are production assistants on the new season of their show Will & Grace.

There’s no law that prevents you (or your boss) from hiring a favorite son or niece. That’s true for any private entity (unlike the public sector). So it’s up to the company. “There are plenty of companies, Donald Trump’s among them, that do not have any sort of nepotism policies,” says employment attorney Ann Fromholz. “And some appear to make nepotism a practice.”

Still, aware of the optics and pitfalls, many Hollywood entities engage someone like Fromholz to address nepotism in their corporate guidelines. “I don’t necessarily recommend a total prohibition,” she says. “Most companies are sizable enough that you can separate the people who are related to each other.”

Still, those running Hollywood’s most coveted internship programs insist the practice of industry veterans opening doors for powerful progeny is overstated. “Look, I’m not going to tell you that there’s never a situation where there’s somebody important that we do business with where we’re not going to squint hard at the résumé to let their kid in,” says an individual with one agency program, adding that an estimated 20 percent of applicants come from showbiz families. “But most of the time, these candidates are very well-qualified.”

Take Ellie Monahan, the 26-year-old daughter of Katie Couric. She interned for HBO for four months during the summer of 2012 while still at Yale. Sources say she worked harder than everyone else at the cable network and is remembered as one of best interns the program has ever had. Monahan has since lined her résumé with more film and TV gigs: She went on to study screenwriting at AFI, then worked with Shawn Ryan on The Get Down before landing her current job as a writers’ assistant on Amazon’s new superhero drama The Boys. She’s hardly anyone’s idea of a favor hire.

“There’s something of a pay-it-forward expectation,” says a former staffer at Vanity Fair, where many Hollywood kids have spent a New York summer, including Carson Meyer (daughter of Ron), Jessica Springsteen (daughter of Bruce) and Angelica Zollo (daughter of Barbara Broccoli). “If I help your kid, maybe you’ll help me or my kid down the road. If the person ends up being a good, smart, hard-working intern without attitude, that’s just a total bonus.”

Let’s Talk About Sex

Let’s Talk About Sex

“Yo, I don’t think we should talk about this
(Come on, why not?)
People might misunderstand what we’re tryin’ to say, you know?
(No, but that’s a part of life)”
– Salt-n-Pepa

The rash of sexual harassment accusations and related resignations and firings of high profile people (and, we can presume, lower profile people) raises yet again the question of when and whether people can talk about sex or engage in other raunchy talk in the workplace.

Should you talk about sex in the workplace? Of course!*

If you work for a company that sells sex, go right ahead and talk about sex in the workplace. Provided, of course, that you are talking about your company’s business, or its products, or otherwise doing something that’s required by your job.

Some years ago, I did work for a men’s magazine that featured articles and photographs that were sexually charged. (Sex sells, after all.) The photo editor told me, “I yell down the hall, ‘I need more boobs!'” She wanted to know if that was ok, or if she was engaging in sexual harassment.

I told her that, if she was saying she needed more cleavage in the photos, this was ok. If, however, she was talking about herself or something personal, it was not.

Here in Los Angeles, there is a company (actually there are a few) that produces print and video featuring naked women. The walls of the company’s office are adorned with photos from the magazines. The magazines themselves are in the lobby waiting area and in employees’ offices. Does the presence of that many pictures of nude women create a unlawfully hostile work environment? My answer to that question is no. The photos on the walls and the magazines on tables and desks are the company’s product. Conversations about the photos and magazines that are limited to work topics also would be ok. But the moment that an employee starts to talk about their personal sexual attraction to one of the models, or what they might hope to do with that model, the conversation crosses the line to one the creates an unlawful hostile environment based on sex.

The California Supreme Court decided this issue eleven years ago, in Lyle v. Warner Brothers Television Prods. Lyle was a writers’ assistant on the show “Friends.” The Court held that, the “Friends” writers’ room was a workplace where writers were paid to create adult-themed sexual humor and jokes. The court characterized the “Friends” writers’ room as a “creative workplace focused on generating scripts for an adult-oriented comedy show featuring sexual themes.” Therefore, the Court held that sexual talk in the context of brainstorming about and writing scripts — i.e., in the work done in the writers’ room — did not amount to unlawful sexual harassment.

So, if you write for a show that has sexual themes, or if you work for a magazine that features naked women (or men), if you work on the set of a movie with sexual content, go ahead and talk about sex if, and only, if you are talking about it in the context of your job.

But if you work at a bank, or a law firm**, or an energy company, or a hospital, or a restaurant (and so on and so on), there probably is not a situation where you can talk about sex without risking creating an unlawfully hostile environment.

*This blog is for entertainment purposes only and should not be construed as legal advice or offering a legal conclusion.
**Employment lawyers and HR people get to talk about sex every day. So, if you have an overwhelming desire to talk about sex, those are the careers for you.

The Fish Stinks From the Head

The Fish Stinks From the Head

A number of years ago, I attended the holiday party of the firm where I worked at the time. The firm’s management committee met in Los Angeles that week, so all of the members of the executive committee attended the holiday party. Talk about awkward.

It was Friday night and I was tired from a long week of working on various harassment and discrimination lawsuits. I decided to leave the party early and said goodbye to the friends and colleagues around me. In that group was a member of the executive committee, who was from another office and whom I had never met before. He asked for a ride back to his hotel. I said, “Sure”, because his hotel was on my way back to the freeway, and because it did not occur to me that he would do anything inappropriate. Our office did not have that kind of culture.

Apparently, his office did. Or at least he did. As I drove toward the hotel, I asked where the entrance was. He pointed to the parking lot and said, “Well, you can park there if you want to come up to my room.” I laughed. Was I nervous? Was I trying to play it off as a joke? I’m not sure. I know that I managed to convey that wasn’t going to happen. I dropped him at the entrance and got home without incident.

The next day, I went to talk to my best friend in the office. He had made partner earlier that year. I told him what happened and, without hesitation, he said, “You have to tell [the managing partner].” I told him I did not want to. He said that if I did not, he would.

So, later that day, I knocked on the door of the managing partner. “Can I talk to you?” I asked. I was incredibly nervous. I really did not want to tell him. But my sister once told me that, in difficult situations like this, you should just start talking and momentum will take over. She’s right.

I told the managing partner about the creepy member of the executive committee. His reaction surprised me, in the best possible way. The first word he said? “Shit.” And then he said, “The fish stinks from the head.” I knew what he meant: if there are bad actors at the top, it ruins the rest of the organization. He had worked so hard to make sure there was no such stink in our office. And he was dismayed that such a stink had affected one of his lawyers.

I don’t know what the firm did, but I know that I never had to interact with that executive committee member again. I also know that my complaint had no adverse impact on my career. I have every faith that the managing partner of our office put the fear of god into him and anyone else who might disrupt the harmony of our office.

Keeping a workplace free from harassment requires good policies, procedures, and training. But those things cannot alone create a safe and productive workplace. The leadership must be dedicated to creating, cultivating, and protecting a harassment-free workplace, and to taking prompt action when even the slightest hint of harassment occurs.

High Court Docket: Unions, Overtime

High Court Docket: Unions, Overtime

By: Carol Patton
This article was originally published by Human Resource Executive on December 6, 2017

The Supreme Court’s decisions on two upcoming employment-law cases could end up weakening organized labor and impacting overtime for some workers, legal experts say.

Legal experts say the Supreme Court’s upcoming decisions in two employment-law cases involve a pair of hot-button topics: labor unions and overtime.

The first case, Janus v. American Federation of State, County and Municipal Employees, Council 31, challenges the constitutionality of public employees being forced to pay union dues even if they don’t support or join unions. The other case, Encino Motorcars, LLC v Navarro, focuses on whether service advisors at auto dealerships are exempt from overtime.

The plaintiff in the first case, a public-sector worker, refused to join the union but was still required to pay 84 percent of full members’ dues, which excludes fees for the union’s political activities, says employment-law attorney Ann Fromholz, founder of The Frumholz Firm in Pasadena, Calif.

“Employees have the right to decide whether to join the union and can be required to pay a fee even if they elect not to be a member,” she says. “There’s no doubt in my mind that the Supreme Court will rule in favor of the worker and against the union. This could be a big blow for public employee unions.”

This isn’t surprising considering that Justice Gorsuch, who filled Justice Scalia’s seat following his sudden death, is likely to support his predecessor’s conservative views.

If the high court rules in favor of workers, Fromholz says, union membership may dwindle, resulting in less dues and power to negotiate contracts. Such a decision could also create HR quagmires as well. For example, if a union negotiates worker benefits that would not have been otherwise offered, should nonunion members receive those same benefits? Likewise, would nonunion employees be required to pay a portion of their health insurance premiums while employers pay the entire premium for union workers?

“It’s hard to say [if this is fair] because employees do benefit from the work of unions,” says Fromholz. “If there are environments where the union is weak and doesn’t negotiate much beyond what the employee would get, it’s probably not overly fair to ask everyone to contribute.”

Other HR problems would involve worker protections, she says. For example, union employees can only be fired for cause and must receive progressive discipline before termination. However, nonunion employees at the same workplace would be employed at will and not guaranteed those same rights.

This sets the stage for possible instances of inequity, says Fromholz, and opens the door for employers to scale back benefits to ensure consistency between the two employee groups.

“Workers may be unhappy if those protections are stripped away,” she says, adding that benefits such as retirement, however, would remain intact. “That would be an issue HR would need to manage.”

Regarding the second employment-law case, Encino Motorcars, LLC v. Navarro, the U.S. Supreme Court in June rejected a 2011 final rule issued by the U.S. Department of Labor that stated that service advisors at auto dealerships are not exempt from overtime. This final rule contradicted DOL’s 1978 opinion letter, which concluded that service advisors (along with salesmen, partsmen or mechanics, according to the Fair Labor Standards Act) were exempt from overtime.
Initially, the district court dismissed this case on the grounds that service advisors were “functionally equivalent to salesmen, partsmen and mechanics,” says Lee Schreter, an attorney and co-chair of the national wage and hour practice at Littler Mendelson in Atlanta.

Since then, she says, the case has bounced between the Ninth Circuit, which deferred to the DOL’s latest interpretation and unanimously rejected the lower court’s decision, and the U.S. Supreme Court, which reversed the Ninth Circuit’s decision, finding that the DOL’s explanation for departing from the interpretation it had followed for nearly 40 years was inadequate. The case was remanded back to the Ninth Circuit, which not only upheld its decision but also opposes previous rulings made by the Fourth and Fifth Circuits and Supreme Court of Montana. Due to the courts’ disagreements, the case is back in the hands of the Supreme Court.

Ironically, Schreter says, the DOL’s “flip-flopping” won’t help service advisors, because employers can still prevent them from working overtime, reduce their hourly rate to compensate for overtime expenses or put them on commission.
“No good comes from a federal agency having dramatic swings in its interpretation of the law,” says Schreter. “It becomes very hard to comply when you have dramatic swings from one administration to the next [and] makes it very difficult for employers and employees because you don’t have settled expectations.”

Robert Brock, an attorney at the law office of Lowell J. Kuvin in Miami, supports the Ninth Circuit’s opinion but believes the U.S. Supreme Court’s decision will swing the other way. As, he says the Ninth Circuit’s persuasive argument is based on historic records dating back to ground zero for the statute.

Making service advisors exempt would be a stretch, he says, signaling a broadening of exemptions even though exemptions are supposed to be construed narrowly.

But if this occurs, he says HR professionals at auto dealerships need to review nonexempt, even borderline exempt positions.

“If there is a broadening of the construction of statutory exemptions for overtime, that’s going to affect a lot of gray area positions throughout the country,” he says. “If that happens, we’ll see more of it in the future, a loosening of the narrow construction.”

Here’s how to help if you witness sexual harassment at work

Here’s how to help if you witness sexual harassment at work

By: Meera Jagannathan, Moneyish

The most effective thing to do, one employment lawyer says, is to take contemporaneous notes.

The bystander effect is real: For instance, ousted NBC anchor Matt Lauer’s alleged sexual misconduct was “not a secret among other employees at ‘Today,’” several unnamed sources told Variety. And 16 former and current employees of Harvey Weinstein’s companies told the New Yorker the disgraced mogul’s pattern of predation was “widely known within both Miramax and the Weinstein Company.”

“Harassment law does not require (a non-management employee) to report harassment that occurs toward someone else,” Pasadena employment lawyer Ann Fromholz told Moneyish. “But is it the morally correct thing to do? Sure.” The Equal Employment Opportunities Commission encouraged employers in its 2016 task force report to incorporate bystander intervention training into their harassment prevention programs.

If you decide to take action after witnessing workplace sexual harassment, here are potential ways to help. (Not all, of course, will work in every situation or with every type of person.)

Confront the harasser. Many workplace harassers don’t even understand their behavior is inappropriate, Fromholz said. If you feel you can head straight to the source without fear of retaliation, “be specific about the conduct, be specific about the fact that it’s making people uncomfortable, and be specific that it needs to stop.” Use your judgment when deciding whether to mention the name of the person being made uncomfortable, as that could “put a target on their back”: You might say “people” are uncomfortable, for example, rather than naming specific names. “Don’t frame it as a threat,” Fromholz added. “It’s just a reasonable discussion between adults.”

Run interference. To “obnoxiously prevent there being the privacy that’s necessary for a lot of sexual harassment to happen,” said employment attorney Mary Kuntz of the Washington, D.C. firm Kalijarvi, Chuzi, Newman & Fitch, you might try gatecrashing what appears to be an unwelcome seduction in the office or at a work party. “You essentially run block for someone,” she said. “You insert yourself into conversations … You go take the seat next to the person who is trying to get the young thing to sit next to him,” she said. “You essentially don’t let them have that one-on-one engagement.”

You could also throw the victim a lifeline: “Walk up to them and say, ‘Hey, do you want to go get a Diet Coke?’” Fromholz said. “In the very worst situations, where it ends up in sexual assault, there sometimes is grooming behavior from the beginning … The person who ends up assaulting will say, ‘No, no, no, she’s fine,’ … so giving that person an option, an out, is a good possibility. You can’t promise they’ll take you up on it, but you do the best you can.”

Keep in mind, warned Kuntz, that this is “a temporary Band-Aid fix”: While you can intervene when you spot the behavior, you likely won’t be around every time it occurs.

Go to a manager. If you’re a non-management worker uncomfortable approaching the harasser — due to their personality or stature within the company, perhaps — “then the best thing to do is go to somebody in some position of authority who you are comfortable with,” Fromholz said. Notifying a member of management “puts the company on notice and triggers their legal requirement to take certain action” under Title VII, EEOC sexual harassment guidelines and state law.

Talk to the victim. You may not feel comfortable approaching them; they may not feel comfortable being approached. But if you forge ahead, be sure not to retraumatize the person, Fromholz said: Speak with empathy, realize their reaction may not be what you expected, understand they may be unwilling to talk, and don’t expect their memories of the incident to be as linear as yours. You might say something to the effect of, “Hey, I saw what happened. I wasn’t comfortable with it; I’d like to talk to somebody so that it can stop; and I wanted to talk to you first.” “Unless you’re somebody who’s trained … you’re not qualified to solve their pain,” Fromholz added.

Take contemporaneous notes. “Probably the most effective thing you can do,” Kuntz said, is to record details in real time of harassment you’ve witnessed, then make yourself available to testify should your colleague file a complaint. “Memories fade over time; even over a couple of days, you forget details,” Fromholz said. “Send a text to yourself — that’s a good way of making sure you remember the details that may become important.”

“It’s testimony like that that removes Matt Lauer … You have to have people who can say, ‘No, I saw this happen,’” Kuntz said. “That corroborating testimony helps, and it can bring permanent change as opposed to just running interference one night at a party.”