ENTERTAINMENT THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION 34TH ANNUAL LAW ISSUE

MAY 2018 / $5

EARN MCLE CREDIT “QUOTE” REQUESTS PROHIBITED page 22

SLANTS RULE page 30

Nondisclosure and Sexual Harassment page 12 Net Neutrality Threat page 36 Based on True Events Los Angeles lawyers Saul S. Rostamian, Diana Hughes Leiden, and Lev Tsukerman examine the future of docudramas after De Havilland v. FX page 16

2018 EntertainmentLawIssue

FEATURES 16 Based on True Events BY SAUL S. ROSTAMIAN, DIANA HUGHES LEIDEN, AND LEV TSUKERMAN The specter of the California Supreme Court overturning the appellate decision in De Havilland v. FX Neworks creates additional uncertainty in the production of docudramas

22 Quote No More BY NESTOR BARRERO, SAYAKA KARITANI, AND JADE BREWSTER Labor Code Section 432.3, the latest milestone in California's evolving efforts toward equal pay, prohibits employers from requesting salary or compensation history Plus: Earn MCLE credit. MCLE Test No. 278 appears on page 25.

30 SLANTS Rule BY DREW WILSON In Matal v. Tam, the U.S. Supreme Court found the prohibition against disparaging trademarks to be unconstitutional

Los Angeles Lawyer DEPARTME NTS the magazine of the Los Angeles County 8 LACBA Matters 12 Practice Tips Bar Association New LACBA position focuses on diversity #MeToo challenges confidentiality and May 2018 and inclusion nondisclosure agreements BY STAN BISSEY BY ANN FROMHOLZ AND JEANETTE LABA Volume 41, No. 3

9 On Direct 36 Closing Argument COVER PHOTOS CREDITS: OLIVIA DE HAVILLAND: Jeffrey B. Valle The FCC's worrisome repeal of net NBC/GETTY IMAGES INTERVIEW BY DEBORAH KELLY neutrality rules CATHERINE ZETA JONES: KURT ISWARIENCO/FX/SHUTTERSTOCK BY JAMES E. MCMILLAN 11 Barristers Tips The elements of effective wage negotiation strategy BY MELISSA HAILEY LOS ANGELES LAWYER (ISSN 0162-2900) is published monthly, except for a combined issue in July/August, by the Los Angeles County Bar Association, 1055 West 7th Street, Suite 2700, Los Angeles, CA 90017 (213) 896-6503. Period - icals postage paid at Los Angeles, CA and additional mailing offices. Annual subscription price of $14 included in the Association membership dues. Nonmember subscriptions: $38 annually; single copy price: $5 plus handling. Address changes must be submitted six weeks in advance of next issue date. POSTMASTER: Address Service Requested. Send address changes to Los Angeles Lawyer, P. O. Box 55020, Los Angeles CA 90055. 05.18 Visit us on the internet at www.lacba.org/lalawyer E-mail can be sent to [email protected] Follow Los Angeles Lawyer on Twitter at @LALawyerMag

EDITORIAL BOARD Chair JOHN C. KEITH Articles Coordinator SANDRA MENDELL Assistant Articles Coordinator TYNA ORREN Secretary RENA KREITENBERG Immediate Past Chair TED M. HANDEL

JERROLD ABELES (PAST CHAIR) TOM K. ARA SCOTT BOYER CHAD C. COOMBS (PAST CHAIR) THOMAS J. DALY GORDON K. ENG DONNA FORD (PAST CHAIR) STUART R. FRAENKEL MICHAEL A. GEIBELSON (PAST CHAIR) SHARON GLANCZ GABRIEL G. GREEN STEVEN HECHT (PAST CHAIR) DENNIS F. HERNANDEZ JUSTIN KARCZAG MARY E. KELLY (PAST CHAIR) KATHERINE KINSEY JENNIFER W. LELAND CAROLINE SONG LLOYD PAUL S. MARKS (PAST CHAIR) COMM’R ELIZABETH MUNISOGLU CARMELA PAGAY GREGG A. RAPOPORT JACQUELINE M. REAL-SALAS (PAST CHAIR) LACEY STRACHAN THOMAS H. VIDAL

STAFF Editor-in-Chief SUSAN PETTIT Senior Editor JOHN LOWE Art Director LES SECHLER Director of Design and Production PATRICE HUGHES Advertising Director LINDA BEKAS Senior Manager MELISSA ALGAZE Administrative Coordinator MATTY JALLOW BABY

Copyright © 2018 by the Los Angeles County Bar Assoc - iation. All rights reserved. Reproduction in whole or in part without permission is pro hibited. Printed by R. R. Donnelley, Liberty, MO. Member Business Publications Audit of Circulation (BPA). The opinions and positions stated in signed material are those of the authors and not by the fact of publication necessarily those of the Association or its members. All manuscripts are carefully considered by the Editorial Board. Letters to the editor are subject to editing.

4 Los Angeles Lawyer May 2018 LOS ANGELES LAWYER IS THE OFFICIAL PUBLICATION OF THE LOS ANGELES COUNTY BAR ASSOCIATION 1055 West 7th Street, Suite 2700, Los Angeles CA 90017-2553 Telephone 213.627.2727 / www.lacba.org

LACBA EXECUTIVE COMMITTEE President MICHAEL E. MEYER

President-Elect NotSoBIGLAW.com BRIAN S. KABATECK copyright • trademark Senior Vice President TAMILA C. JENSEN Vice President PHILIP H. LAM Assistant Vice President NOT SO BIGLAW® is a service mark of Paul D. Supnik JESSE A. CRIPPS Assistant Vice President JO-ANN W. GRACE Assistant Vice President ANN PARK Treasurer JOHN F. HARTIGAN Immediate Past President MARGARET P. STEVENS Barristers President JEANNE NISHIMOTO Barristers President-Elect JESSICA GORDON Executive Director STANLEY S. BISSEY Chief Financial & Administrative Officer BRUCE BERRA

BOARD OF TRUSTEES KRISTIN ADRIAN HON. SHERI A. BLUEBOND SUSAN J. BOOTH RONALD F. BROT TANYA FORSHEIT JENNIFER W. LELAND MATTHEW W. MCMURTREY F. FAYE NIA BRADLEY S. PAULEY ANGELA REDDOCK DIANA K. RODGERS MARC L. SALLUS MICHAEL R. SOHIGIAN EDWIN C. SUMMERS III KENDRA THOMAS KEVIN L. VICK WILLIAM L. WINSLOW FELIX WOO AFFILIATED BAR ASSOCIATIONS BEVERLY HILLS BAR ASSOCIATION CENTURY CITY BAR ASSOCIATION CONSUMER ATTORNEYS ASSOCIATION OF LOS ANGELES CULVER MARINA BAR ASSOCIATION GLENDALE BAR ASSOCIATION IRANIAN AMERICAN LAWYERS ASSOCIATION ITALIAN AMERICAN LAWYERS ASSOCIATION JAPANESE AMERICAN BAR ASSOCIATION JOHN M. LANGSTON BAR ASSOCIATION THE LGBT BAR ASSOCIATION OF LOS ANGELES MEXICAN AMERICAN BAR ASSOCIATION PASADENA BAR ASSOCIATION SAN FERNANDO VALLEY BAR ASSOCIATION SANTA MONICA BAR ASSOCIATION SOUTH BAY BAR ASSOCIATION SOUTHEAST DISTRICT BAR ASSOCIATION SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION WOMEN LAWYERS ASSOCIATION OF LOS ANGELES

Los Angeles Lawyer May 2018 5 he fun part of practicing as a lawyer in the entertain- ment industry now is the degree of dynamism in the T legal landscape and the business itself. Practitioners are daily challenged to solve novel problems that may affect the industry for a generation or more. Litigation more and

more has “bet the company” consequences, as business models and consumer pref- erences change, and deals must address unique deal points for the same reasons. This year’s entertainment issue is a reflection of the dynamic forces in play. As Saul S. Rostamian, Diana Hughes Leiden, and Lev Tsukerman write in their article about the Olivia de Havilland litigation regarding her depiction in the television series Feud: Bette and Joan, “Hollywood is keeping a watchful eye on a lawsuit that could have a lasting impact on how real-life personalities are depicted in television and movies.” Although FX successfully prevailed on an anti-SLAPP motion striking de Havilland’s claims, a request for review to the California Supreme Court will doubtless follow. With the sheer volume of allegations of improper sexual conduct in the enter- tainment industry and beyond, it comes as no surprise that some deeply entrenched legal norms may be eliminated. Ann Fromholz and Jeanette Laba explain how the long-standing concept of strictly enforced confidentiality provisions in settlement agreements may be coming to an end concerning sexual harassment matters. An artist’s “quote” (payment on prior projects) was often the foundation of negotiating compensation provisions in talent deals. After enactment of last year’s AB 168, codified in Labor Code Section 432.3, however, as Nestor Barrero, Sayaka Karitani, and Jade Brewster explain, studios may be prohibited from requesting them. Whether this spells the demise of a traditional negotiating tool for talent deals and a corresponding effect on strategy is an open question. Drew Wilson looks at the substantial shift in trademark law effected by the Supreme Court’s decision in Matal v. Tam regarding the Slants’ trademark. Music groups and others often desire to brand themselves with “sharper, more shocking marks” that jump out at viewers. Long before Tam, shocking marks that crossed the line with “immoral, scandalous, or disparaging” matter were prohibited from obtaining registration. The Tam Court concluded the prohibition against such marks was con- stitutionally vague and ruled against it but left in place other similar prohibitions. Net neutrality is a significant issue for the entertainment industry. For telecom- munications companies and Internet service providers that control the pipelines through which content flows to consumers, freedom to monetize that traffic, to prefer certain types of content over others, and to create and offer “sponsored content,” is potentially a significant source of revenue. The FCC’s reclassification of broadband Internet services paves the way for that possibility, which would pose big risks to content creators and consumers. James E. McMillan presents a powerful argument in this month’s Closing Argument against preferential treatment of content and why an open Internet is of vital importance. n

Tom K. Ara is a shareholder at Greenberg Traurig where his practice focuses on entertainment and media industry transactions, both domestic and international. Sharon J. Glancz is director of syndication licensing and business affairs at NBCUniversal Television Distribution and a member of the executive committee of the California Lawyers Association’s IP section. Thomas H. Vidal is a partner at Pryor Cashman, LLP where he is an entertainment and IP trial lawyer. Ara, Glancz, and Vidal are the coordinating editors of this special issue.

6 Los Angeles Lawyer May 2018

LACBA matters BY STAN BISSEY, LOS ANGELES COUNTY BAR ASSOCIATION EXECUTIVE DIRECTOR

New LACBA Position Focuses on Diversity and Inclusion

RECOGNIZING THE OPPORTUNITY to do Angeles City Attorney Mike N. Feuer. legal profession and promote a close-knit more, to be an even better example, your A key component of this initiative will legal community throughout Los Angeles board of trustees has established the be the development of a new LACBA Lead- and beyond. of fi cer-level position of Vice President of ership Training Academy, which will create We are extremely fortunate to have Di v ersity/Affiliate Outreach and select - a pipeline of leaders for the associ ation someone with Phil’s experience leading ed LACBA officer and trustee Philip H. and the legal community. In addition, Phil the association’s diversity and affiliate bar Lam to lead this initiative. will serve as the dedicated outreach officer outreach. Phil has a 20-year history of civic, pro for the affairs of our 18 affiliate bar part- LACBA will also establish a Diversity bono, and bar service, nationally and ners who share nearly 1,400 common Leadership Award, which will be given locally, having served as president of the members with LACBA. annually to recognize those who have Southern California Chinese Lawyers Working with staff and volunteers to sought to increase diversity and inclusion Association, the oldest Asian American coordinate LACBA’s diversity and inclusive in the practice of law and to inspire others bar association in Cal if ornia; as co-pres- initiatives, while building stronger rela- to do the same. ident of the LGBT Bar Association of Los tionships with our affiliate bars, will en- In the end, this focus on diversity, inclu- Angeles, one of the oldest bars for lesbian, hance LACBA’s relevance to the rapidly sion, and affiliate bar relationships will gay, bisexual, and transgender people in expanding, diverse population of lawyers, make us a stronger organization, reflect- the state; and as a member of the Diversity increase LACBA’s long-term viability, and ing the multicultural city and county we and Inclusion Advisory Board to Los position the county bar to improve the call home. n

8 Los Angeles Lawyer May 2018 on direct INTERVIEW BY DEBORAH KELLY

Jeffrey B. Valle Founding Partner, Valle Makoff LLP

How is your last name pronounced? Like How do we fix that? Education is one way; valley, as if it had a “y.” In Italy, it might litigation is another. People are so upset be pronounced with more flair. about the NFL players, but this is the whole point of this country: freedom. In 2002, you formed your own firm, Valle Kneeling is a dignified gesture. You may Makoff, LLP. Why? I had been a partner at not like it; you may disagree with it. But Skadden. I was not unhappy there, but I the idea that it should be shut down is so wanted a new challenge. foreign to my conception of this country that it makes me sad. What kinds of cases do you most enjoy? What I most enjoy about litigation is all You chaired the board of directors for the the different types of cases. We do busi- Western Center on Law & Poverty. What is ness- and entertainment-related cases. the greatest legal issue facing the poor? Each case involves a new industry or a Access to a lawyer. Anytime you’ve got a new business, and I really enjoy getting to lawyer helping people, the chances of the know their niches. result is 90 percent improved.

What is not fun about having your own You received the Pro Bono Civil Liberties JEFFREY B. VALLE is cofounder of the California firm? The least enjoyable thing is the nuts Award from the ACLU. Do you think law firm of Valle Makoff, where he specializes and bolts of the administration part. lawyers have a duty to provide pro bono in entertainment and intellectual property liti- services? I know they do. There is a dif- You went to UCLA for undergraduate work gation, representing high-profile entertainment ference between a business and a profes- and to Boalt for your J.D. What is the and sports figures as well as Fortune 500 com- sion. A profession has an obligation to biggest cultural difference between L.A. panies in a wide range of commercial and busi- serve, not just to make money. and the Bay Area? I love both places, and ness disputes. A former senior partner at Skad - now we have offices in both places. San den, Arps, Slate, Meagher & Flom, he was c0- In a 2011 book titled How Leading Lawyers Francisco is a little gem, but it tends to head of the Skadden West Coast entertainment Think, you were quoted as to the impor- look down at Los Angeles. Los Angeles is and intellectual property group. Valle was select- tance of visualization in your cases. How a huge, overwhelming metropolis that ed as one of Southern California’s 2009 and so? Every case is going to turn on two di- loves San Francisco. 2013-17 Super Lawyers by Thomson Reuters, a mensions: the equitable dimension and the legal dimension. By the equitable, I 2013 Top Rated Lawyer in intellectual property Why did you want to become a lawyer? mean what side is wearing the white hat? law, and a Top Rated Lawyer in labor and employ- I started out as a philosophy and music That is where understanding your client ment law by American Lawyer Media and Martin - major. I always wanted to pursue an and their business is going to be very im- dale-Hubbell. He received a Special Com mend - intellectual life but also be in the real portant. You can present to a judge or a ation from the Governor of California, a Certificate world. Philosophy only provides half of jury a visual picture, even if it’s oral, of of Recognition from the California Legislature that. The law does provide that perfect your client and the business to help put for his trial work, and the 1997 Pro Bono Civil mix. It’s a great profession: it’s intellectu- the whole thing into context. Liberties Award by the American Civil Liberties al, and you’re in a battlefield. I like that Union. A recognized expert on First Amendment combination. You’ve been selected as a Super Lawyer in issues, Valle taught a required class on First 2009 and from 2013-2017. What makes you Amendment law as an adjunct professor at UCLA Were you frightened the first time you super? I think I have a pretty good under- for many years. He received his J.D. from the were in front of a judge? No, I’ve always standing about how to win legal cases. University of California at Berkeley. been very comfortable speaking. You’ve written that lawyers often lose You taught a class at UCLA on First Amend- cases because they make too many argu- ment law. Is the First Amendment under ments. How so? I understand the lawyer What makes you the happiest? I am proud attack today? Yes. I worry that the core mentality, which is afraid to give up any of my firm. I have a great wife and two point of it is less deeply woven into soci- potential argument. There is a certain great kids. The office is in Brentwood, the ety than it should be. The whole point is laziness in not finding the right two or home is in Brentwood. I can actually to protect speech that you don’t like or three arguments. At a minimum, you walk to work. Each day is a good day. don’t support.

Los Angeles Lawyer May 2018 9 know the jury is going to be talking about You took her deposition for seven days, Harari. I don’t do light reading. those things. and The New Yorker magazine described the case as a modern epic. Do you agree? Which magazine do you pick up at the doc- What do you always make sure is in your Yes. The plaintiff would cry; we would go tor’s office? The New Yorker or People. brief case? Pad and pen. back and forth. It was very emotional. Where do you go on a three-day weekend? Your client list reads like America’s Who’s It was an 18-year feud. What took so long? Get down to Laguna, go to the Montage, Who—Pepsi, Estée Lauder, and Lockheed. For a good part of that time, there was a and hang out. Do these high-profile clients need special five-year rule that you were supposed to When you travel, do you answer your handling? A number of entertainment finish cases in five years. But, typically, e-mail? I always answer my e-mail. and sports figure often need some special cases would go on for so long that people care. The high-profile cases also have a would settle out of exhaustion. If either What is your favorite hobby? Playing the press dimension to them that has to be party had any colorable reason to contin- piano. taken care of. ue, it would get continued. You are a jazz pianist in a band called Do you have an example? When I repre- What was your best job? This one. Evolution. Are you a musician at heart? sented Brandon Jennings—a star high I considered making music a career but school player who decided to play in Eu- What was your worst job? My first job in ultimately decided to make it a serious rope rather than do the more traditional high school, selling Fuller brushes door- hobby. That was an important decision “one and done” college route—I received to-door. that I made. an avalanche of calls from the press, not What characteristic did you most admire in just sports press, but The New York Where do you play? We’re looking for a your mother? She had a well-honed sense Times and Wall Street Journal. gig. of justice. For Disney, you handled the Winnie the Other than jazz artists, who is on your If you were handed $10 million dollars to- Pooh royalty dispute. Wasn’t Mickey music playlist? Steely Dan. Mouse enough? The plaintiff was the morrow, what would you do with it? Put niece of the Slesinger family. She was some of it in a savings account, give some What is your hidden talent? I’m a magi- under the constant feeling that she was of it to causes I care about, and invest in cian. I used to have a magic act and now being cheated. I had the impression while some ventures that seem like they need a I just show magic to my friends and my I was deposing her that she was miserable little kick-start. kids. because she thought she was missing a What book is on your nightstand? Homo penny here and a penny there. What are your retirement plans? I’m not Deus: A Brief History of Tomorrow, by thinking about retirement.

What is your favorite sport as a partici- pant? Tennis.

What is your favorite spectator sport? I love hockey.

How do you get your news? Boy, did that change! Various news websites through- out the day and a news channel at the end of the day.

Which person from your past would you like to take out for a beer? My mom and dad. My dad would have a manhattan, and my mother would have a martini.

You’re stranded on a deserted island, and a magic genie says you that you can only have one meal, over and over, until you’re rescued. What is it? Pasta Bolognese.

What are the three most deplorable condi- tions in the world? Poverty; the refugee situation; violence.

Who are your two favorite U.S. presidents? George Washington—he modeled how to be a president and not a king. FDR—he saved the nation with bold solutions when it was in serious trouble.

What is the one word you would like on your tombstone? Kind.

10 Los Angeles Lawyer May 2018 barristers tips BY MELISSA HAILEY

The Elements of Effective Wage Negotiation Strategy

WHETHER REPRESENTING your client’s interests or your own, applicable legal changes affecting employee wages and benefits. negotiating is an essential process for establishing fair and con- Likewise, an individual employee seeking to negotiate his or her sistent wages for employees performing the same or similar work. wages should engage in similar research to determine comparable It is also a method of identifying knowledge, skills, experience, wages or salaries for the prospective position, taking into consid- performance, and bona fide factors that may differentiate an eration the geographical area, experience level, and other factors. individual employee’s potential earnings from his or her peers. For both employers and employees, wage negotiations require Both employers and employees can benefit from engaging in an evaluation of the overall financial package and how other wage negotiations if they are committed to understanding the components affect the target wage rate. Parties should prioritize other party’s position and giving it consideration. To effectively wages against other benefit goals, ranking them in order of negotiate wages, it is important for both parties to establish rea- importance. For example, if having specific health insurance is sonable expectations, communicate proposals effectively, and more important than a wage increase, these priorities should be close the deal professionally. noted and, if necessary, communicated during negotiations. Once the employer and employee establish reasonable expec- Establish Reasonable Expectations tations, goals, and priorities, someone must play the first card. Wage negotiations, which may occur in the context of collective Unless the starting point is clearly defined, the first offer generally bargaining or on an individual basis, are often thought to be a anchors or sets the stage for the remainder of the negotiations. contentious process with a winner and a loser. However, this is The concept of anchoring generally refers to a person’s tendency not necessarily the case. While both parties seek to leave the to rely on the first piece of information presented as benchmark proverbial negotiating table with the best possible deal, if they for subsequent judgments. Therefore, it is important that the first have established reasonable expectations in advance, the end offer is throughly considered and realistically based on reasonable result can be a win-win. Accordingly, it is critical for both parties expectations previously established. Otherwise, the other party to research information to support their expectations before may perceive that the process is not being taken seriously or establishing a goal and strategy. In California and several other make an unreasonable counter in return to reset the process. It is states, recent developments in minimum wage, fair pay, and also important to communicate all aspects of the financial package other wage-related laws require employers to adjust existing up front if they are a consideration in the wage negotiations. wages and salaries, reevaluate pay practices and policies, and Furthermore, the parties should not be afraid to show their fine tune record-keeping methods. It is important for employers cards, or at least some of them. Confidently discussing with an and employees to understand the legal requirements and wage employer or employee justifications supporting the offer often trends to establish the applicable changes that affect their respective help develop a level of rapport and trust that can positively affect business and personal earnings. the outcome for both parties. This is the case even when providing From an employer’s perspective, establishing reasonable expec- information to the other party that is unrelated to the offer but tations requires financial analysis to establish and/or adhere to has the effect of making him or her more comfortable with the a budget from which the employer may allocate a certain per- process, such as sharing a relevant personal experience. Sharing centage for wages. This analysis requires evaluation of the entire information and clearly communicating an offer also saves financial package, including insurance benefits, paid leave, vaca- valuable time by reducing unnecessary speculation about the tion, holidays, and other benefits. Training and other ancillary motivations behind the other party’s offer. costs associated with hiring employees are also a consideration. Closing the Deal Further, an employer must balance its financial needs with current market conditions affecting wages for a position. For instance, Assuming both parties have established reasonable expectations if there is a shortage of employees who maintain a certain skill and communicated effectively during negotiations, it is likely or license, a relatively higher wage may be appropriate to attract the process will end in a positive outcome. However, one party employees with these credentials and to remain competitive in may be unsatisfied with the outcome, so it is important to consider the employer’s market under the circumstances. the ongoing employer-employee relationship. Ultimately, since Employees should engage in similar market research prior to both parties must continue business as usual, maintaining constant arriving at an ideal target wage for their prospective position. In professionalism and respecting the process of wage negotiations traditional labor negotiations, a prudent labor representative might is of the utmost importance. n survey its bargaining unit to determine what improvements they seek, gather historical wage and benefit data for the represented Melissa Hailey practices in the areas of labor and employment law as in-house group and compare it to that of similar employers in the area, counsel for FirstGroup America, Inc. in Los Angeles. She also serves on the evaluate market trends and cost of living increases, and understand Barristers Exec utive Committee.

Los Angeles Lawyer May 2018 11 practice tips BY ANN FROMHOLZ AND JEANETTE LABA

#MeToo Challenges Confidentiality and Nondisclosure Agreements

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.1 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.2 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 alle- gations of sexual harassment and resulted in serious consequences defendant or employer, however, may be an unlawful restraint for the alleged perpetrators, ranging from criminal investigations on the attorney’s right to practice law.3 to job loss or public disgrace. Yet, there are many more cases Under Title VII of the Civil Rights Act,4 settlement agreements that have not seen the light of day (or social media) because of in employment cases that prohibit employees from filing charges private contractual obligations and the fear of legal retribution. with or assisting the Equal Employment Opportunity Commission In the wake of this cultural reckoning, more people (and law- (EEOC) in its investigations are unlawful. As the U.S. Court of makers, in particular) have begun to question the use of nondis- Appeals for the First Circuit explained: “[T]he EEOC acts not closure agreements and confidentiality agreements in cases of only on behalf of private parties but also ‘to vindicate the public sexual assault or harassment. Do the provisions that buy secrecy interest in preventing employment discrimination.’”5 Therefore, enable harassers and permit continued abuse? settlement agreements that prohibit employees from filing charges or assisting with investigations could impede the enforcement Confidentiality Provisions of Title VII. The First Circuit explained that “[i]n many cases of Confidentiality provisions are a common and material component widespread discrimination, victims suffer in silence. In such of nearly every settlement agreement resolving a legal dispute. instances, a sprinkling of settlement agreements that contain In settlement agreements regarding an employee’s allegations of stipulations prohibiting cooperation with the EEOC could effec- sexual harassment or other unlawful discrimination, a confiden- tively thwart an agency investigation.”6 tiality provision frequently prohibits the employee from disclosing In December 2017, amidst the barrage of revelations regarding to anyone any details about the settlement or any facts that led continued sexual misconduct across industries—and related cover- up to the settlement. Exceptions may be negotiated for disclosures ups—EEOC Commissioner Chai Feldblum said that the EEOC to the employee’s spouse, attorneys, or tax advisors. It is not will be closely watching settlement agreements to ensure that uncommon for these provisions to be one-sided—in other words, such agreements do not prohibit employees from filing an EEOC only the complainant is prohibited from disclosure. Sometimes, charge relating to sexual harassment (or to any other protected these provisions also provide an exception for the employee to status). “It is important for employers to know that we are looking be able to testify truthfully if subpoenaed for deposition or trial at these agreements,” Feldblum told Reuters.7 Feldman stated in (but sometimes they do not). the same interview that the EEOC will be scrutinizing settlements In other cases, the lawyers negotiating these confidentiality provisions on behalf of the defendant organization or employer Ann Fromholz practices employment law, focusing on workplace investigations may try to extend the confidentiality provision to the lawyer and employment law advice to companies and executives, in Pasadena, representing the complainant. A provision preventing the lawyer California. Jeanette Laba litigates employment disputes on behalf of individuals

RICHARD EWING from representing other employees with complaints against the and runs the Law Office of Jeanette E. Laba in Pasadena.

12 Los Angeles Lawyer May 2018 that include nondisclosure agreements, in activity, and the protections of Section 7 clauses provide that, in the event of a order to ensure that accusers are not being apply to both union and nonunion work- breach, the damages will be set at a pre- unlawfully barred from filing complaints places.10 determined amount. The liquidated dam- with the commission. The National Labor Relations Board ages might be set at a percentage of the A confidentiality provision is generally (NLRB) has held that discussions of, and settlement amount or might require that a material—and, so far, lawful—part of a gripes about, wages are protected concerted the plaintiff return the full settlement settlement agreement that protects an em- activity.11 Even individual complaints that amount in the event of a breach. For exam- ployer’s interests. To many employers and employees make to each other—without ple, CNN reported on one such case a few their counsel, the absence of a confiden- any intent to engage in group action—are years ago in which the plaintiff in an age tiality provision in any settlement agreement per se protected under the NLRA. In recent discrimination suit lost $80,000 in settle- could be a deal breaker. However, the em- years, the NLRB has emphasized that em- ment proceeds because his daughter posted ployer must be careful in drafting the lan- ployee complaints on social media about about the settlement on Facebook in breach guage. The confidentiality provision should their workplaces are protected concerted of his confidentiality agreement with his make clear that, despite the confidentiality activity. Specifically, the NLRB held that former employer.17 obligation, an employee is still allowed to an employer may not maintain a policy that Employers explain the need for liqui- file a charge with the EEOC (or to partici- prohibits employees from making disparag- dated damages provisions by arguing pate in an EEOC investigation). ing, false, or misleading statements on social that the damage caused by a breach, while media and elsewhere.12 real, can be very difficult to quantify and Nondisclosure Agreements This NLRB rule also means that an prove. The argument against liquidated Aside from confidentiality provisions en- employer may not prohibit an employee damages, however, is that they are unnec- tered into as part of a settlement of a claim, from making complaints about sexual essarily punitive on occasions when a some employers require their employees to harassment on social media or elsewhere. breach of confidentiality results in no prov- sign nondisclosure or nondisparagement What then of nondisparagement provi- able monetary damages. Moreover, even agreements as a condition of employment. sions that are in some employment con- if there are no liquidated damages provided These clauses can also be quite broad. For tracts? They are prohibited, too. Section in the contract, the threat of being forced example, The New York Times reported 8(a)(1) of the NLRA makes it an unfair to defend a breach of contract lawsuit is that “Mr. Weinstein enforced a code of labor practice for an employer “to interfere enough to deter many individuals from silence; employees of the Weinstein Com - with, restrain, or coerce employees in the speaking out. pany have contracts saying they will not exercise of the rights guaranteed in Section “Me Too” Evidence criticize it or its leaders in a way that could 7” of the NLRA.13 It is an unfair labor harm its ‘business reputation’ or ‘any em- practice—a violation of Section 8(a)(1) of Long before the hashtag, “me too” was ployee’s personal reputation,’ a recent doc- the NLRA—for an employer to require its (and still is) a legal doctrine permitting the ument shows.”8 employees to agree not to “publicly criti- discovery and admissibility of evi dence of Preemployment nondisclosure agree- cize, ridicule, disparage or defame” a com- similar complaints of wrong- doing against ments are prevalent in the entertainment pany or its “directors, officers, sharehold- the accused in California employment industry where salacious details about the ers, or employees.”14 cases.18 “Me too” evidence can bolster the private lives of public figures can easily Despite this prohibition under federal credibility of a complainant if witnesses tes- be sold to tabloids for a significant profit. labor law, some employers require such tify and provide evidence about harassment These types of nondisclosure agreements nondisparagement or nondisclosure agree- that they experienced at the hands of the are also common in positions of employ- ments to be signed as a mandatory condi- same alleged harasser. For an individual ment related to public figures in other tion of employment. Yet, California Labor prosecuting harassment cases it is critical fields. Code Section 432.5 provides that employ- to discover whether any previous complaints Confidentiality agreements concerning ers cannot compel an employee to agree, were made against the same accused and trade secrets and other proprietary business in writing, to any term or condition known how the employer responded to those com- information have a legitimate business pur- to be prohibited by law. plaints. A plaintiff likely will seek to intro- pose in protecting a company’s profitabil - The provisions also might be uncon- duce the testimony of prior complainants i ty and commercial investments. How - scionable and therefore unenforceable un - to bolster his or her own case. ever, recent revelations about the po tential der California law because of an imbalance Under California law, “me too” evidence for misuse and abuse of mandatory con- of power between the employer and the is also relevant to the issue of punitive dam- fidentiality agreements in employment employee or if the employee did not have a ages. An employer can be liable for punitive have opened a discussion about whether meaningful opportunity to negotiate the damages if prior complaints of sex harass- and when broader agreements relating to provisions. Unconscionability has both a ment or assault were known and the em- confidentiality and nondisclosure might procedural and a substantive element: “[T]he ployer failed to respond ap propriately. A be contrary to public policy or law. former focusing on oppression or surprise prominent example of this is a case from Broad nondisparagement or nondisclo- due to unequal bargaining power, the latter the 1990s against one of the country’s sure agreements may run afoul of federal on overly harsh or one-sided results.”15 In largest law firms, Baker & McKenzie, and labor law, for starters. The National Labor addition, a person who is fired for refusing one of its partners.19 Six women testified Relations Act (NLRA) makes it unlawful to sign an unlawful nondisclosure agree- at trial regarding prior complaints of bad for employers to prevent workers from ment—or for violating one—may have a acts by the partner. The jury awarded over talking about the terms and conditions of claim for wrongful termination in violation $7 million in punitive damages. their employment. Section 7 of the NLRA of public policy under California law.16 From a plaintiff’s lawyer’s perspective, protects the rights of workers to engage in Often, nondisclosure or confidentiality it is difficult or impossible to get witnesses concerted activity.9 This activity is known provisions in settlement agreements con - to corroborate a client’s case by way of a in labor law parlance as protected concerted tain “liquidated damages” clauses. These voluntary declaration or through an inves-

Los Angeles Lawyer May 2018 13 tigative interview if the witnesses have speak about one’s personal experiences keep allegations of sexual harassment and signed nondisclosure agreements. Although with sexual harassment or assault. assault secret is through the use of manda- the witnesses might be compelled to pro- Since October 2017, opposition to con- tory arbitration provisions. These provi- vide testimony under subpoena, the fear fidentiality provisions in cases of sexual sions have also been the subject of pro- of breaching a nondisclosure agreement assault or sex harassment has grown due posed legislation. California Assembly - might result in a less than forthcoming in part to a belief that such provisions may woman Lorena Gonzalez Fletcher an - witness. have protected powerful predators from nounced plans to introduce legislation Simultaneously, as technology and the accountability. California Senator Connie that would prohibit mandatory arbitra- In ternet have evolved, there has been an Leyva announced that she will introduce tion of sexual harassment claims.28 increase in the publication of deeply legislation in 2018 to ban confidentiality There is no question that employers per sonal narratives through social media provisions in settlement agreements in and their counsel generally place a high networks (e.g., Facebook, Twitter, and cases of sexual assault, sexual harassment, value on confidentiality provisions. Con - Instagram) and various blogs. There also and sexual discrimination.22 fidentiality provisions can not only keep has been an increase in “confessional” McKayla Maroney, an Olympic gym- a lid on alleged bad conduct but also pro- essays through sites such as XO Jane and nast, recently filed a lawsuit regarding the hibit discovery of the price a company Jezebel. This trend does not apply just to confidentiality provision in her sexual paid to resolve the legal dispute. As noted, “millennials.” Many women of every abuse settlement which, she argued, would companies can also use these provisions generation now are using technol ogy to have prohibited her from testifying at the to try to prevent former claimants from pub lish extremely personal details about sentencing hearing of her abuser.23 It was becoming witnesses on behalf of subse- their lives, whether on “private” Facebook reported that the confidentiality clause quent claimants. groups, participating in a hashtag on Twit - would have resulted in a $100,000 fine to Benefit to Employee ter, contributing to a blog, or writing a her if breached.24 Maroney’s attorney book. Ellen Pao, the high-profile plain tiff argued that the agreement provided she Confidentiality provisions can also benefit in an employment discrimina tion suit that could only testify in court if subpoenaed employees who make a claim and settle included allegations of sexual harass ment, but could be in breach of the agreement if situations in which the employees want to wrote in her memoir that she turned down she gave a voluntary statement as part of keep the facts of the harassment quiet. A significant settlement offers because she the sentencing hearing.25 It appears USA mutual confidentiality or nondisparage- wished to tell her side of the story.20 In - Gymnastics ceded to public pressure after ment clause might also benefit an employee creasingly, the freedom to tell the story is a an outcry about the confidentiality provi- by protecting the employee from the dif- right that sexual assault or harassment vic- sion at issue. Several public figures offered ficulty that going public with a complaint tims do not want to sign away. on Twitter to pay this fine for Maroney against an employer—or filing a lawsuit— and criticized the confidentiality provision can do to one’s job prospects. This assumes, Recent Opposition at issue.26 The gymnastics organization of course, that a settlement is reached Perhaps some of the stigma of experiencing later issued a statement that it would not before a lawsuit (or other publicly available sexual assault or harassment has been pursue any money from Maroney if she document) is filed or published. Many stripped away by the sheer volume of recent spoke publicly about the abuse.27 employers conduct background checks or revelations about the prevalence of this Most parties to a confidentiality pro- other research on applicants to discover, conduct in the workplace and elsewhere. vision do not have a high profile, however. among other things, if they have ever been Victims in previous generations may have If an employer discovers that an employee a party to a lawsuit. If an applicant has blamed themselves or had no desire to has breached a nondisclosure or confiden- been a plaintiff in a lawsuit alleging dis- speak of their wrongful treatment due to tiality agreement, the employer can seek crimination or harassment against a former feelings of shame. to enforce contractual rights under the employer, this might be a deterrent to a A prominent example of testimony that agreement. Unless there is a liquidated prospective employer. reflects this changing attitude is that of damages provision, the employer likely Some of these issues may become moot singer-songwriter Taylor Swift. Swift re - will need to weigh the cost of proceeding if proposed legislation prohibiting confi- cently testified at a trial regarding a DJ with legal action against whether it can dentiality provisions in settlement agree- whom she alleged reached under her skirt actually be proven that the breach caused ments of sex harassment or sexual assault and groped her buttocks during a photo any monetary damages (and whether the becomes law. Even if such a law does not op. The DJ later was found to have e n - employer can actually recover any damages pass, however, it appears likely that there gaged in the groping. During trial Swift from the employee, if proven). will be more protection of employees in repeatedly described the incident in frank Even armed with a contractual right to California in the future. Outside of Calif - and unapologetic terms (later quipping, proceed against a former employee, some ornia, the EEOC has promised more over- “I’m told it was the most amount of times employers may still opt to avoid the public sight of employees’ rights with respect to the word ‘ass’ has ever been said in Color- relations risk of filing suit against a victim settlement agreements, despite the Trump ado federal court”). When cross-examined of harassment for making truthful state- administration’s efforts at deregulation. about how she felt when the DJ lost his ments in violation of a nondisclosure or The reignited conversations around sex- job because of her complaint, Swift testi- confidentiality agreement. In a high-profile ual harassment in the workplace that began fied, “I am not going to allow your client case, such action might do the company in October 2017 with the exposés on Har- to make me feel like it is any way my fault, more harm than good. In a low-profile case vey Wein stein have had many and varied because it isn’t.” Taylor Swift’s testimony involving a smaller employer, however, legal consequen ces. These include a greater push was praised by one publication as “sharp, action against a former employee for breach for transparency and more people using the gutsy, and satisfying.”21 An increasing of a confidentiality agreement likely would power of social media and journalism to refusal to be shamed into silence may not receive much, if any, media attention. shed light on issues otherwise hidden, con- explain the rising value of the right to Another way companies and em ployers fidentiality provisions notwithstanding.

14 Los Angeles Lawyer May 2018 Lawyers representing individuals in em - 4 42 U.S.C. §§2000e et seq. evidence admissible to prove gender bias). 5 19 ployment or sexual assault cases may start EEOC v. Astra, Inc., 94 F. 3d 738, 744 (1996) (quot- Weeks v. Baker & McKenzie, 63 Cal. App. 4th ing General Tel. Co. v. EEOC, 446 U.S. 318, 326, 1128 (1998). pushing back on the nature of the confi- (1980)). 20 ELLEN PAO, RESET MY FIGHT FOR INCLUSION AND dentiality provisions requested by defense 6 Id. LASTING CHANGE 221-22 (2017). counsel considering these recent develop- 7 Daniel Wiessner, EEOC Monitor: Harassment set- 21 Christina Cauterucci, Taylor Swift’s Sexual Assault ments. For example, confidentiality pro- tlements in agency’s sights, Reuters, Dec. 12, 2017, Testimony Was Sharp, Gutsy, and Satisfying, Slate, visions might be negotiated so that only https://www.reuters.com. Aug. 10, 2017, http://www.slate.com. 8 Kantor & Twohey, supra note 1. 22 Ricardo Lopez, California Lawmaker Calls for the amount of the settlement payment 9 29 U.S.C. §157. Ban on Secret Settlements for Sexual Harassment, must be kept confidential, but the under- 10 National Lab. Relations Bd. v. CSS Healthcare VARIETY, Oct. 18, 2017, available at http://variety.com. lying facts leading up to the settlement Servs., Inc., 419 Fed. Appx. 963 (11th Cir. 2011). 23 Andrew Both, Gymnast Maroney says in court filing are not sub ject to the restriction. Given 11 See, e.g., Alternative Energy Applications, Inc., 361 she was forced to sign agreement, Reuters, Dec. 20, the in creased media spotlight, claimants N.L.R.B. slip op. 139 (Dec. 16, 2014). 2017, https://www.reuters.com. 12 24 may be less willing to sign away their Chipotle Services LLC d/b/a Chipotle Mexican Grill, Richard Winton et al., McKayla Maroney accuses 364 NLRB No. 72 (Aug. 18, 2016). USOC and USA Gymnastics of covering up sexual right to tell their story. Companies, on 13 29 U.S.C. §158(a)(1) abuse with secret settlement, L.A. TIMES, Dec. 21, the other hand, place a high value on con- 14 Quicken Loans, Inc. & Lydia E. Garza, an Individual, 2017, available at http://www.latimes.com. fidentiality and likely will insist on confi- No. 28-CA-75857, 2013 WL 100863; 359 NLRB 25 Emily Marcus, McKayla Maroney’s Attorney dentiality provisions until and unless a 1201, 1205 (Jan. 8, 2013) (decision set aside after the John Manly: USA Gymnastics Can “No Longer Hide law prohibits it. n U.S Supreme Court issued its decision in NLRB v. Their Misdeeds,” US WEEKLY, Jan. 17, 2018, available Noel Canning, No. 12-1281, _ S. Ct. _, 2014 WL at https://www.usmagazine.com/celebrity-news/news 2882090 (Jan. 10, 2014). /mckayla-maroneys-attorney-slams-usa-gymnastics. 1 See, e.g., Jodi Kantor & Megan Twohey, Harvey 15 Sonic-Calabasas A, Inc. v. Moreno, 57 Cal. 4th 26 Steve Helling, Chrissy Teigen & Kristen Bell Offer Weinstein Paid Off Sexual Harassment Accusers for 1109, 1133 (2013). to Pay Fine So McKayla Maroney Can Speak at Coach’s Decades, N.Y. TIMES, Oct. 5, 2017, available at https:// 16 See, e.g., D’Sa v. Playhut, 85 Cal. App. 4th 929 Hearing, PEOPLE, Jan. 16, 2018, available at http:// www.nytimes.com [hereinafter Kantor & Twohey]; (2000) (termination of employee for refusal to agree people.com/sports/chrissy-teigen-offers-to-pay-mck Ronan Farrow, From Aggressive Overtures to Sexual to unenforceable covenant not to compete stated cause ayla-maroneys-possible-100000-fine-for-discussing Assault: Harvey Weinstein’s Accusers Tell Their Stories, of action for wrongful termination in violation of -abuse-in-court. NEW YORKER MAGAZINE, Oct. 10, 2017, available at public policy). 27 USA Gymnastics statement regarding McKayla https://www.newyorker.com. 17 Matthew Stucker, Girl costs father $80,000 with Maroney, USA Gymnastics, https://usagym.org/pages 2 Melanie Mason, Female lawmakers, staffers and lob- ‘SUCK IT’ Facebook post, CNN, Mar. 4, 2014, /post.html?PostID=21191 (last viewed Mar. 28, 2018). byists speak out on “pervasive” harassment in Calif - http://www.cnn.com. 28 Press Release, Lorena Gonzalez Fletcher Announces ornia’s Capitol, L.A. TIMES, Oct. 17, 2017, available 18 See Johnson v. United Cerebral Palsy/Spastic Legislation To Protect Sexual Harassment Victims at at http://www.latimes.com. Children’s Found. of Los Angeles & Ventura Counties, the Workplace, Assemblywoman Lorena Gonzalez 3 See CAL. RULES OF PROF’L CONDUCT R. 1-500(A); 173 Cal. App. 4th 740, 767 (2009); Pantoja v. Anton, Fletcher—District 80 (Feb. 16, 2018), available at MODEL RULES OF PROF’L CONDUCT R. 5.6(b). 198 Cal. App. 4th 87, 109-11, 114 (2011) (“Me Too” https://a80.asmdc .org.

Los Angeles Lawyer May 2018 15 2018 EntertainmentLawIssue

by SAUL S. ROSTAMIAN, DIANA HUGHES LEIDEN, and LEV TSUKERMAN BASED ON TRUE EVENTS Olivia de Havilland’s lawsuit against FX raises questions about docudramas precisely because the genre exists somewhere between fact and fiction

is keeping a watchful producer Ryan Murphy, which dramatizes the rivalry be tween Bette HOLLYWOOD eye on a lawsuit that Davis and Joan Crawford by focusing on the shooting of the 1962 could have a lasting impact on how real-life personalities are depicted horror film that would become a cult classic, What Ever Happened in television and movies. Last year, Olivia de Havilland, a two-time to Baby Jane?3 Olivia de Havilland, played by Catherine Zeta-Jones, Academy Award winning actress best known for her performance is depicted in six of the eight episodes of Feud (for about 18 of the in Gone with the Wind, sued the makers of the FX anthology show’s 400 minutes),4 her character appearing in a series-long television series Feud: Bette and Joan, claiming that the series paints interview used as a framing device to explore the relationship between her in a false light and inaccurately portrays her as endorsing the the battling stars.5 Feud is one of many recent high-profile docudra- show. However, FX succeeded in striking her claims under the mas—an increasingly popular genre defined by “dramatic interpre- auspices of the First Amendment as a result of the Califonia Court tations of [real-life] events and dialogue with rhetorical flourishes.”6 of Appeal’s reversal of the trial court’s denial of FX’s anti-SLAPP Docudramas have enjoyed popularity in both television and film in motion.1 The appellate decision, which de Havilland has vowed to past years with the successes of The Social Network, The Crown, appeal,2 has far-reaching implications for both networks and studios and I, Tonya, the anthology series American Crime Story (also exec- involved in the production of docudramas, as well as actors and utive produced by Feud’s Murphy) with recent installments focused other public figures seeking to control who can profit from the com- on the O.J. Simpson murder trial and the assassination of fashion mercialization of their identities. designer Gianni Versace, and FX’s new series Trust, which dramatizes Feud: Bette and Joan is an anthology television series created by the kidnapping of John Paul Getty III.7

Saul S. Rostamian and Diana Hughes Leiden are litigation partners in the Los Angeles office of Winston & Strawn LLP with significant experience in the

technology, media, and entertainment sectors. Lev Tsukerman is a litigation associate in the Los Angeles office of Winston & Strawn. MIKE CALLAWAY

16 Los Angeles Lawyer May 2018

Like other docudramas, Feud blends fact that the use of her identity in Feud “was for the same reasons that other fictional works and fiction, incorporating dramatized inter- intended to increase the appeal and success” inspired by actual events and people have views with Hollywood stars about the Davis- of the show and to create the impression that historically been protected.28 Second, FX Crawford rivalry, including de Havilland.8 she endorsed the series.19 It was undisputed claimed that because the Davis-Crawford It is this dramatization that lies at the heart that FX neither obtained her consent nor rivalry is a matter of “public interest,” these of the actress’s lawsuit against FX.9 De Havil - compensated her for the use of her identity. causes of action are barred.29 Third, and of land claimed that Feud falsely portrayed her particular importance, FX argued that Feud FX’s Anti-SLAPP Motion as a foul-mouthed gossip and also gave the is sufficiently “transformative”—and thus, inaccurate impression that she endorsed the To score an early exit from the lawsuit, FX protected from right-of-publicity claims— series.10 De Havilland urged that these actions moved under California’s anti-SLAPP statute because its writers used the de Havilland did not fall under the umbrella of First for an order striking all of de Havil land’s character as one piece of a larger mosaic that Amendment protection and instead infringed causes of action as improperly targeting FX’s “created new expression by dramatizing a her right of publicity and constituted a “false First Amendment rights. An anti-SLAPP decades-old rivalry so as to comment on light” invasion of privacy claim.11 motion “provide[s] for the early dismissal of modern-day Hollywood and current social The underlying policy behind de Havi - unmeritorious claims filed to interfere with issues.”30 Similarly, FX argued that the eco- lland’s invasion of privacy claim was that the valid exercise of the constitutional rights nomic value of Feud did not stem primarily individuals have the right to protect them- of freedom of speech.”20 In deciding this from de Havilland’s fame but rather from the selves from unwarranted publicity that casts motion, courts employ a two-step analysis. prestigious cast (including Susan Sarandon them in a false, negative light. Similar to a First, the moving party must make an initial and Jessica Lange as Davis and Crawford, defamation claim, a plaintiff alleging the threshold showing that the challenged causes respectively), the acclaimed writing and direct- “false light” species of invasion of privacy of action arise from protected First Amend - ing, and the docudrama’s subject matter.31 must establish 1) that the defendant was ment activity.21 If this prong is met, the burden Finally, and as with its attack on the false responsible for false publicity that would be shifts to the opposition to establish a likeli- light cause of action, FX argued that de “highly offensive” to a reasonable person hood of prevailing on such claims.22 Here, Havilland could not prove that FX acted with and 2) that the publicity caused the plaintiff the main focus of the parties’ briefing on the malice by clear and convincing evidence.32 harm.12 Further, because de Havilland is a anti-SLAPP motion was whether de Havilland The trial court denied FX’s anti-SLAPP public figure, she must prove that FX acted demonstrated a likelihood of prevailing on motion, finding that based on the allegations with malice—i.e., with knowledge or reck - her invasion of privacy and right-of-publicity and preliminary evidence presented, de less disregard of the false light in which de claims. Havilland “met her burden in showing that Havilland would be viewed.13 FX raised three challenges to de Havil- she has a likelihood of prevailing on the mer- De Havilland alleged that Feud falsely land’s false light cause of action. First, the its” and allowed the case to proceed.33 The portrayed her by giving viewers the impres- network argued that Feud did not falsely trial court held that with respect to the false sion that she 1) gave an interview at the portray the actress because the four challenged light claim, de Havilland provided sufficient 1978 Academy Awards about the Davis- statements are “substantially true.” For ex - evidence that the four challenged statements Crawford rivalry; 2) referred to her sister, ample, FX noted that de Havilland has, in were factually inaccurate, in that the exact Joan Fontaine, as her “bitch sister;” 3) im - fact, referred to her sister as “dragon lady” substance of each did not occur (e.g., even plied that Frank Sinatra was an alcoholic; and argued that this phrase is synonymous though de Havilland may have referred to and 4) told director Robert Aldrich that she with “bitch.”23 Second, FX urged that the her sister as “dragon lady” and previously does not “play bitches” in acting roles.14 The portrayal of the actress in Feud was “not uttered the word “bitch,” she never actually actress claimed that these events never occurred reasonably susceptible [to] defamatory mean- directed that term at her sister).34 and that the statements attributed to her are ing” given that viewers of the docudrama The court also determined that de Havil - in direct contravention of her public image as “would have understood that Feud relies on land had presented sufficient evidence that one who would not speak about her fellow dramatic interpretations of historical events the four statements were also defamatory, Hollywood stars in “crude and vulgar” terms, and private conservations that were, by neces- holding that “a viewer of the television show, an image that she says that she spent decades sity, fictionalized.”24 Third, FX challenged which is purported to be based on historical cultivating.15 Moreover, her lawsuit alleged that it acted with malice because its writers facts, may think Plaintiff to be a gossip who that by leading viewers to believe that these carefully “investigated and consulted num - uses vulgar terms about other individuals, events occurred in real life, Feud painted her erous resources to ensure a factual basis for including her sister.”35 Further, the court held as a hypocrite and “petty gossip” and caused their dramatic narrative and to actually de - that because FX “sought to portray the show her significant economic and reputational pict” the actress.25 Thus, FX argued, it did ‘consistent with the historical record,’ the damage.16 not act with knowledge that its portrayal of statements made in the show may lead a rea- De Havilland’s lawsuit also included two de Havilland was false or with reckless dis- sonable viewer to believe the statements were right-of-publicity claims. California’s common regard of that falsity.26 actually made by Plaintiff.”36 law right of publicity protects against the With respect to the right-of-publicity causes As for de Havilland’s right-of-publicity unauthorized commercial exploitation of an of action, the bulk of FX’s attack focused pri- claims, the trial court rejected FX’s argument individual’s name, likeness, and identity.17 A marily on four affirmative defenses that would that docudramas are entitled to blanket First statutory action also exists under California preclude recovery for de Havil land. First, FX Amendment protection.37 Citing California Civil Code Section 3344 and requires a similar argued that the depiction of de Havilland in precedent, the court found that “the right of showing.18 These causes of action give indi- Feud is immune from liability because “[a] publicity would trump the First Amendment” viduals the right to control and profit from right of publicity claim cannot be maintained in situations in which a celebrity’s likeness the commercial value of their identities and for the use of a person’s name or likeness in is used to promote a television show such recognize that celebrities have a proprietary a constitutionally protected motion picture that viewers are left with the impression that interest in developing a marketable image. or television program.”27 FX argued that the individual actually endorses the series.38 Applied to the lawsuit, de Havilland argued Feud is shielded from right-of-publicity liability Relying on industry custom, the court held

18 Los Angeles Lawyer May 2018 that de Havilland had actionable right-of- that reasonable viewers, when considering an increased risk of right-of-publicity lawsuits publicity claims because the show’s producers Feud in its entirety, would not see the show from their subjects who—particularly in the did not compensate her for using her name as conveying factual statements that de case of documentaries involving criminal and likeness to increase the marketability, Havilland is a hypocrite, gossip, or someone activity—are unlikely to consent to their por- public appeal, and success of Feud.39 who speaks ill of others.49 To the contrary, trayal. The EFF argued that the trial court’s With respect to malice, the trial court the court found that Catherine Zeta-Jones’s ruling, if upheld, could have an impact impliedly found that de Havilland met her portrayal of de Havilland was “overwhelm- beyond film and television, pointing out that burden “because Defendants never sought ingly positive” and depicted a “wise, witty, many websites, books, and songs also feature her consent or verified any of the statements sometimes playful woman.”50 Further, the real personalities without their consent.57 made by her in the movie.”40 court noted that Zeta-Jones’s uses of the On the other side, SAG-AFTRA urged Finally, on the issue of the purported word “bitch” were not highly offensive to a the appellate court to carefully balance the “transformative” nature of the docudrama, reasonable person, and also were “substan- need for filmmakers to introduce some fic- the court decided that “because the Defen - tially truthful characterizations of her actual tional aspects when dramatizing historical dants admit that they wanted to make the words,” given de Havilland’s documented events against the rights of living individuals, appearance of Plaintiff as real as possible, use of the term “dragon lady” to refer to her such as de Havilland, to protect their repu- there is nothing transformative about the sister.51 Relying in part on Murphy’s statement tations from reckless falsifications of fact.58 docudrama”and that “even if Defendants that he changed “dragon lady” to “bitch” The union also argued that most docudramas imagined conversations for the sake of being because he believed the latter “would be featuring real individuals will not pass the creative, such does not make the show trans- better understood by the modern audiences,” “transformative use” test because the very formative.”41 FX immediately appealed the the court declined to “dissect the creative point of a docudrama is to depict famous decision, and oral argument was held on process” of Feud’s writers.52 individuals as themselves.59 March 20, 2018. Finally, diverging once again from the Siding with FX and the amici, the court trial court, the court of appeal held that de of appeal’s opinion noted that the trial court’s Court of Appeal Decision Havilland failed to prove that FX acted with ruling “leaves authors, filmmakers, play- Six days later, the trial court’s decision was “actual malice” because simply “[p]ublishing wrights, and television producers in a Catch- overturned by the California Court of Appeal. a fictitious work about a real person cannot 22”—if a docudrama portrays real-life celebri- The court found that Feud is entitled to First mean the author, by virtue of writing fiction, ties with complete historical accuracy, the Amendment protection, grounding its decision has acted with actual malice.”53 In this case, work may not be sufficiently “transformative” in an oft-cited concurring opinion from de Havilland was unable to meet her burden to survive a right-of-publicity claim from an Guglielmi v. Spelling-Goldberg Productions, given that Feud's portrayal of her was positive uncompensated public figure.60 At the same a right-of-publicity case involving a television and that Feud's writers intended to cast de time, docudramas that significantly fiction- show that fictionalized the life of actor Havilland as a Hollywood icon.54 alize events surrounding these celebrities Rudolph Valentino.42 Importantly—and fatal could face defamation or invasion of privacy Impact of the Appellate Decision to de Havilland’s arguments—the appellate liability for a negative portrayal.61 court reiterated Guglielmi’s core principle The sheer volume of amici curiae briefs sub- While the court of appeal’s decision was that fact-based and fictional works receive mitted to the court of appeal sheds light on a complete victory for FX, it does leave some equal constitutional protection.43 Moreover, the importance the various industry players uncertainty regarding the feasibility of creating notwithstanding de Havilland’s arguments place on this case. Netflix, the Motion Picture docudramas in the future. In particular, con- that Guglielmi's concurring opinion is not Association of America (MPAA), A&E, the tent creators may still be wary about potential binding, the justices noted that California International Documentary Association, the false light claims if a reasonable person might courts have been applying the case's reasoning Electronic Frontier Foundation (EFF), and find a television show, movie, or book to be for nearly four decades.44 The court concluded the Wiki media Foundation were among those both a primarily factual portrayal and either that “Feud is speech that is fully protected who weighed in on behalf of FX, while the defamatory or offensive. The appellate court by the First Amend ment, which safeguards labor union, the Screen Actors Guild Ameri- viewed Zeta-Jones’ portrayal of de Havilland the storytellers and artists who take the raw can Federation of Television and Radio Artists as “overwhelmingly positive” and “the most materials…and transform them into art.”45 (SAG-AFTRA), voiced its support for de favorable of any character in the docu- The appellate court also found that the Havilland. Netflix, the MPAA, A&E, and drama”—a finding that was key to its holding supposed industry custom of compensating others took the position that an affirmation‐ that de Havilland was not likely to succeed individuals portrayed in film and television of the trial court’s ruling would have a chilling on her false light defamation claim.62 This was irrelevant to the analysis: “The First effect on future docudramas and biopics. reasoning, however, leaves much room for Amendment simply does not require such A&E argued that, if this ruling had been in future plaintiffs to craft successful defamation acquisition agreements.”46 The court went place years ago, critically acclaimed films claims against content creators who paint on to note that, in any event, Feud's portrayal based on historical people and events such their subjects in a more negative light. of de Havilland was transformative because as Citizen Kane, Saving Private Ryan, and Furthermore, the specter of de Havilland the docudrama's value and marketability were Almost Famous may never have been made.55 overturning the decision at the California derived from the skill and reputation of its The International Documentary Associa tion Supreme Court creates additional uncertainty creators and actors—not primarily from de pointed out that the ruling could also have in the production of docudramas. Havilland's fame.47 For these reasons, the an impact on unauthorized documentaries If the appellate decision is overturned, appellate court held that de Havilland's right- such as The Jinx: The Life and Deaths of content creators may have to expend more of-publicity claims were not likely to succeed. Robert Durst and OJ: Made in America.56 resources to ensure the factual accuracy of The court of appeal further held that de These documentaries, unlike docudramas or their representation of living celebrities. In Havilland failed to meet her burden of show- historical fiction, are much less likely to be Feud’s case, FX pointed out that it engaged ing that she would prevail on the merits of transformative because they hew closer to in substantial research and reviewed “well- her false light claim.48 The court concluded fact than fiction and, therefore, could face respected nonfiction books, news articles,

Los Angeles Lawyer May 2018 19 [and] interviews of key individuals” to ensure 26, 2018) [hereinafter Appellate Decision]. 27 Id. at 13 (citing Guglielmi v. Spelling-Goldberg 2 the historical accuracy of the docudrama, Erik Pederson, Olivia de Havilland’s Lawyer Says Prods., 25 Cal. 3d. 860, 872–73 (1979)). ‘Feud’ Lawsuit Is “Destined For A Higher Court,” 28 See FX’s Opening Appellate Brief, supra note 4, but this proved inadequate—at least at the Hints At Judge Bias, DEADLINE HOLLYWOOD, Mar. at *50–54. trial court stage—to demonstrate that it was 26, 2018, http://deadline.com/2018/03/feud-lawsuit- 29 FX’s Motion to Strike, supra note 3, at 13–14. likely to defeat de Havilland’s claims.63 olivia-de-havilland-lawyer-appeal-1202353813. 30 Reply in Support of Defendants’ Motion to Strike Networks and producers may also decide 3 Defendants’ Motion to Strike at 1, De Havilland v. at 5, De Havilland v. FX Networks, LLC, et al., No. to take the safer route of obtaining the con - FX Networks, LLC, et al., No. BC667011 (Cal. BC667011 (Cal. Super. Ct. filed June 30, 2017). Super. Ct. filed June 30, 2017) [hereinafter FX’s 31 FX’s Motion to Strike, supra note 3, at 14–15. sent of, and compensating, living celebrities Motion to Strike]. 32 Id. at 15. featured in future docudramas. Notably, de 4 Appellants’ Opening Brief, FX Networks, LLC, et 33 Ruling on Motion to Strike, supra note 11, at 2. Havilland argued that she deserved up to al. v. De Havilland, No. B285629, 2017 WL 6268452, 34 Id. at 3–5. $2.1 million (a conservative estimate) for at *23 (Cal. Ct. App. filed Dec. 4, 2017), [hereinafter 35 Id. at 6. Feud’s use of her image.64 Obtaining the FX’s Opening Appellate Brief]. 36 Id. at 9. 5 37 Id. consent of living celebrities for their portrayal Respondent’s Brief in Opposition, FX Networks, at 10–12. 2017 WL 6268452 at *15 (Cal. App. 2d filed Dec. 38 Id. at 10. in television and film also raises the issue of 22, 2017), [hereinafter De Havilland’s Appellate 39 See id. at 10–12 (“Here, because no compensation censorship, as public figures are not likely Brief]. was given despite using her name and likeness, plaintiff to sign off on docudramas that highlight their 6 Partington v. Bugliosi, 56 F. 3d 1147, 1155 (9th has adequately met her burden.”). wrongdoings or shortcomings Cir. 1995). 40 See id. at 15. 7 41 The procedural posture of this case is sig- Other docudramas include: The Post, Dunkirk, Id. at 13. 127 Hours, The Queen, Snowden, American Sniper, 42 Apellate Decision, supra note 1, at 19. Guglielmi nificant as well. Anti-SLAPP motions provide and Jackie. involved a "television program that was a 'fictional- a mechanism for defendants to end lawsuits 8 FX’s Opening Appellate Brief, supra note 4, at *17. ized' version of the life of actor Rudolph Valentino. aimed at chilling free speech early on, before 9 FX Networks is the cable television network on Valentino had died years earlier and his nephew the expenditure of significant litigation which Feud aired, and Pacific 2.1 Entertainment Guglielmi sued, alleging misappropriation of Val - expenses.65 A victory for de Havilland would Group is the production company behind Feud. Both entino's right of publicity." Id. at 17–18. In the are named as defendants in the lawsuit and are col- famous concurring opinion, the Chief Justice "framed only have sent this case back to the lower lectively referred to as “FX” within the context of the issue as whether the use of a celebrity's 'name court for an eventual trial of the merits of this article. and likeness in a fictional film exhibited on television the case. FX’s victory in striking de Havilland’s 10 De Havilland’s Appellate Brief, supra note 5, at constitutes an actionable infringement of that person's claims will likely provide future defendants *12. right of publicity.'" Id. at 18 (citation omitted). At with more ammunition for an early escape 11 See generally Third Amended Complaint, De its core, the concurring opinion found that "truthful Havilland v. FX Networks, LLC, et al., No. and fictional accounts have equal constitutional route from similar lawsuits. However, the BC667011 (Cal. Super. Ct. filed June 30, 2017) [here- stature," thus entitling both to First Amendment pro- mere threat of litigation costs could deter stu- inafter Third Amended Complaint]. Although there tection. Id. (internal quotation marks and citation dios from taking on docudrama projects, even are some differences between the common law and omitted). if they believe that their creations would ulti- statutory right of publicity, the trial court, as well 43 Id. at 18 (internal quotation marks and citation mately survive scrutiny from the courts. The as the parties, evaluated the substance of de omitted). 44 same could also provide meaningful leverage Havilland’s claims together, and the trial court specif- Id. at 19. ically noted that California’s codified version “com- 45 Id. at 19. to celebrities or others engaged in contract plements the common law tort.” Ruling on 46 Id. at 21. negotiations for a motion picture or television Defendants’ Motion to Strike at 9, De Havilland, 47 Id. at 26–27. show’s depiction of those individuals. No. BC667011 (Cal. Super. Ct. filed June 30, 2017) 48 Id. at 30. By their very nature, docudramas toe the [hereinafter Ruling on Motion to Strike]. De Havilland 49 Id. at 30. 50 line between fact and fiction. Unlike most also brought a fourth cause of action for unjust Id. at 32. enrichment, but the court ultimately determined that 51 Id. at 33. documentaries, docudramas rely on actors this claim was derivative of the causes of action dis- 52 Id. at 34. to portray real people and mix in a sometimes cussed in this article. 53 Id. at 35. heavy dose of fiction to tell their stories and, 12 Jackson v. Mayweather, 10 Cal. App. 5th 1240, 54 Id. at 36. unlike true fictional works, docudramas are 1264 (2017). 55 Brief of Amicus Curiae A&E Television Networks, 13 rooted in real-life events and people. It is Brodeur v. Atlas Entm’t, INC., 248 Cal. App. 4th LLC, et al. in Support of Appellants, FX Networks, 665, 678 (2016). FX Networks, LLC et al. v. De Havilland, No. precisely because docudramas exist some- 14 Ruling on Motion to Strike, supra note 11, at 2. B285629, 2017 WL 6268452, at 26–27 (Cal. Ct. where between these two worlds that de 15 Third Amended Complaint, supra note 11, ¶¶ 13– App. filed Jan. 25, 2018). Havilland’s lawsuit against FX raised ques- 15, 23–26. 56 Brief of Amicus Curiae International Documentary tions about the future of the genre. FX’s suc- 16 Id., ¶¶ 23, 26. Association in Support of Appellants, FX Networks, cess thus far will likely prevent other creators 17 Gionfriddo v. Major League Baseball, 94 Cal. FX Networks, No. B285629, 2017 WL 6268452, at and producers from the “Catch-22” identified App. 4th 400, 408 (2001). 13, 25–27 (filed Jan. 25, 2018). 18 CIV. CODE §3344. 57 Brief of Amicus Curiae Electronic Frontier Found - by the appellate court—facing legal action 19 Plaintiff’s Opposition to Defendants’ Motion to ation, et al. in Support of Appellants, FX Networks, for both sticking too close to reality and Strike at 3, De Havilland, No. BC667011 (Cal. Super. FX Networks, No. B285629, 2017 WL 6268452, at departing too far from it. The potential ability Ct. filed June 30, 2017). 11 (filed Jan. 25, 2018). of networks and producers to have these 20 Club Members for an Honest Election v. Sierra 58 Brief of Amicus Curiae SAG-AFTRA in Support types of lawsuits thrown out early could sig- Club, 45 Cal. 4th 309, 315 (2008); CODE CIV. PROC. of Respondent, Olivia de Havilland, FX Networks, §425.16(b)(1). No. B285629, 2017 WL 6268452, at 5, 11 (filed nificantly impact the ability of living actors 21 See CODE CIV. PROC.§425.16(b)(1). Jan. 25, 2018). and other public figures to control how their 22 See id. 59 Id. at 7. identities are exploited for commercial gain. 23 FX’s Motion to Strike, supra note 3, at 8, 9 (citing 60 Appellate Decision, supra note 40, at 37. One thing, however, is clear: those on all Jackson v. Mayweather,, 10 Cal. App. 5th, 1240, 61 Id. at 37 . 62 sides of this dispute will continue to tune in 1262 (2017) for the proposition that “[f]alsity cannot Id. at 32. be shown if the challenged statements appear sub- 63 FX’s Motion to Strike, supra note 3, at 5. to find out how the drama plays out. n stantially true”). 64 Ruling on Motion to Strike, supra note 11, at 14. 24 FX’s Motion to Strike, supra note 3, at 10, 11. 65 CODE CIV. PROC.§425.16. The filing of an anti- 1 Appellate Decision, De Havilland v. FX Networks, 25 Id. at 12. SLAPP motion stays all discovery in the case. CODE LLC et al., No. B285629 (Cal. Ct. App. filed Mar 26 Id. at 11–12. CIV. PROC. §425.16(g).

20 Los Angeles Lawyer May 2018

MCLE ARTICLE AND SELF-ASSESSMENT TEST By reading this article and answering the accompanying test questions, you can earn one MCLE credit. To apply for credit, please follow the instructions on the test answer sheet on page 25.

2018 EntertainmentLawIssue

by NESTOR BARRERO, SAYAKA KARITANI, and JADE BREWSTER QUOTE NO MORE The new law outlawing past compensation queries may create more questions than answers in trying to decrease the gender pay gap for high-profile roles in Hollywood

talent and represent- determine in Hollywood. Compensation in the entertainment HOLLYWOOD atives are in a panic industry commonly consists of not only an initial form of pay- to adopt a fresh framework for negotiating projects in compliance ment—e.g., fixed or up-front compensation for services rendered with the California Legislature’s enactment of last year’s Assembly on a project—but also contingent future earnings—e.g., box Bill 168, which is codified in Labor Code Section 432.3. As of office bonuses and “back end” participation in the form of January 1, 2018, employers may no longer request salary or “points” or a percentage of the gross or net profits derived from compensation history information (commonly referred to as an exploitation of any given project. artist’s “quote” in the entertainment industry) from a prospective On its surface, the new law seems that it could be fairly dis- candidate or rely on this information to determine whether to ruptive, from changing the way talent deals are negotiated to hire an applicant or pay that applicant a certain wage or salary.1 affecting the way information is gathered regarding the pay scale One primary concern with a law that influences multiple for production workers. However, many in Hollywood have industries and directly affects the way employers fundamentally already adjusted the way they conduct business to comply with determine salary is whether it provides the opportunity for the new law, mainly in the form of talent representatives’ obtain - litigation based on industry practices. This is particularly true in ing advance voluntary waivers from their clients to allow them the entertainment industry, which typically relies on salary and to share this type of information with prospective employers.3 compensation history to negotiate future compensation, primarily On the other hand, some talent agents have flatly refused to give with talent, along with the free flow of information between a quote, citing the statute. A seemingly innocent question of studios and talent representatives.2 More over, this new statute “How much did you make on your last project?” or “What’s is of concern to many entertainment executives since salary, your quote?” is now prohibited. Further, even if a client voluntarily which includes compensation and benefits, is not always easy to gives a quote, there is a question as to whether an advance vol-

Nestor Barrero and Sayaka Karitani are attorneys in the Century City office of Constangy, Brooks, Smith & Prophete, LLP. Barrero’s practice focuses on advising large- and medium-sized employers, including entertainment companies on employment law compliance. Karitani’s practice focuses on complex wage and hour class, collective, and PAGA actions. Jade Brewster is a defense litigator in the Los Angeles office of Akerman LLP, specializing in employment and entertainment matters. AMANE KANEKO

22 Los Angeles Lawyer May 2018 untary waiver or consent applies on a blan- Act.10 Specifically, this act may be seen as of the provisions in the statute, which has ket or project-by-project basis. an adjunct to the California Equal Pay Act, partly contributed to the widespread con- The new law also is changing how stu- which already prohibits an employer from fusion and uncertainty in the entertainment dios and talent representatives approach paying an employee wage rates less than industry. the salary negotiation process.4 Studios the rates paid to employees of the opposite Presently, California’s statute does not requesting that talent representatives pro- sex for “substantially similar work” requir- include a clear monetary penalty for its vide a client’s quote and thereafter verify ing the exact same skills, effort, and type violation. This is in contrast to New York the quote with the previous employer is a of responsibility when performed under City’s ban on salary history information, fairly common practice in Hollywood. An similar working conditions.11 which specifies a high penalty for non - artist’s quote is often based on the fixed In 2016, the California legislature enact - compliance. The fine assessed in the New and contingent compensation received on ed Senate Bill 1063, which added race and York City law may consist of a civil penalty the artist’s most recent projects. This quote ethnicity as protected categories to Labor up to $125,000 for an unintentional vio- typically evolves and often increases over Code Sections 1197.5 and AB 1676, which lation and up to $250,000 for a violation time based on the artist’s success and prohibit employers from justifying sex-, that is willful and malicious.16 Similarly, stature (such as awards recognition) in race-, or ethnicity-based pay differences Delaware’s ban carries a civil penalty of the entertainment industry. How ever, the on the grounds of prior salary alone. Based $1,000 to $10,000 per violation.17 announcement of the new law initially on available legislative history, Section California’s new statute only makes created waves of surprise and unease 432.3 was intended to flesh out the weaker clear that the criminal penalties under throughout Holly wood, forcing the enter- AB 1676.12 Labor Code Section 433 do not apply to tainment industry to quickly adjust.5 New To further foster equal pay practices violations of the ban.18 This does not mean, York City previously enacted a similar across the state, the California legislature however, that the statute is completely and more complete statute prohibiting sought to pass additional laws, including without force. There remains a risk for inquiries about an employee’s salary his- Section 432.3, to narrow the disparity. A civil penalties under class actions and expo- tory, which may provide affected Calif - review of the legislative history of Section sure due to the California Private Attorneys ornians some insight into the application 432.3 demonstrates the legislature enacted General Act (PAGA),19 along with gender of its California counterpart.6 this provision with the presumption that discrimination statutes. requesting a job candidate’s salary perpet- On its face, Section 432.3 is deceptively A Budding Acceptance uates a presumed prior wage gap between straightforward. Unlike other Labor Code Outside of the entertainment industry, com- men and women. Thus, Section 432.3 com- provisions, Section 432.3 is not riddled panies recently have voluntarily elected plements the California Equal Pay Act, by with a slew of definitions or exceptions. not to ask for a prospective candidate’s attempting to place men and women on The statute generally prohibits employers pay history, even though no legal restriction equal footing during the recruitment and from relying on the salary history infor- applies to them.7 This trend suggests a interview stages of the employment process. mation of an applicant as a factor in offer- budding acceptance of the practice across While typically an employment law ing employment or what to offer as a the country—and possibly a broadly devel- trendsetter, California is not the first juris- salary.20 Additionally, an employer cannot oping view that merely asking for salary diction to enact a statute that bans request- “seek salary history information.”21 The history inherently perpetuates the gender ing prior salary information, as various pertinent provisions state: pay gap. municipal and state governments across the (a) An employer shall not rely on Nonetheless, professionals involved country have already passed similar stat- the salary history information of an in hiring talent in Hollywood—including utes. In August 2016, Massachusetts became applicant for employment as a factor business affairs executives and human the first state to bar employers from request- in determining whether to offer resources recruiters—should be wary of ing salary history from job applicants. Other employment to an applicant or what the more seemingly innocuous provisions state and municipal jurisdictions have since salary to offer an applicant. of the new statute, for example, what is followed suit, including Delaware, Oregon, (b) An employer shall not, orally or “voluntary” and the requirement that the New York City, Philadelphia, San Francisco, in writing, personally or through an employer provide a “pay scale” upon “rea- and Puerto Rico.13 agent, seek salary history informa- sonable request.”8 It is also unclear how The salary history law in New York tion, including compensation and far the new statute’s provision for voluntary City—the largest hub of entertainment benefits, about an applicant for disclosure by the employee of prior salary industry activity in the United States outside employment. history extends. While this new law may Los Angeles—is considered by many the (c) An employer, upon reasonable be seen as another useful tool to advance most significant regulatory effort thus far request, shall provide the pay scale equal pay, which has historically been a and one that has had the greatest impact for a position to an applicant apply- problem in Hollywood, employers should on the hiring process in the entertainment ing for employment.… also be mindful of other possible discrim- industry to date.14 New York City’s ban is (g) Nothing in this section shall pro- inatory pay practices prohibited under lengthier than California’s recently enacted hibit an applicant from voluntarily California and federal law. statute and includes clarifications to the and without prompting disclosing California has a history of enacting existing law for which the government has salary history information to a statutes to promote equal pay across the posted on its website a “Frequently Asked prospective employer. state. In 1949, the legislature enacted the Questions” section.15 Unlike the bans Areas of Confusion California Equal Pay Act to target wage implemented in other jurisdictions across discrimination against women by pro- the country, California’s statute banning The statute’s simplicity, however, has bred hibiting disparities in wages based on salary history inquiries by employers is confusion, particularly among employers gender.9 Many decades later, in 2015, short—less than 300 words—and does not who do not necessarily seek salary history California enacted the California Fair Pay include the detailed clarifications for most in a linear fashion. For example, many

24 Los Angeles Lawyer May 2018 MCLE Test No. 278 MCLE Answer Sheet #278 QUOTE NO MORE The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour. You may take tests from back Name issues online at http://www.lacba.org/mcleselftests. Law Firm/Organization

1. Salary and compensation history have not historically salary history. Address been relied upon in negotiation of future compensation True. with talent in the entertainment industry. False. City True. 12. Penalties under the California Private Attorneys State/Zip False. General Act (PAGA) are not available to private litigants E-mail 2. A “quote” in entertainment industry negotiations under Section 432.3. Phone is the customary price for services for the talent rendered True. State Bar # and is largely based on the development of the talent’s False. fees over time and can fluctuate depending on the tal- 13. One desired effect of Section 432.3 may be to INSTRUCTIONS FOR OBTAINING MCLE CREDITS ent’s success. require companies evaluating nontalent jobs to assign 1. Study the MCLE article in this issue. True. a value to particular jobs rather than rely on prior 2. Answer the test questions opposite by marking False. salary. the appropriate boxes below. Each question 3. California was the first state to enact a legislative True. has only one answer. Photocopies of this ban on salary inquiries of applicants for employment. False. answer sheet may be submitted; however, this True. 14. An unintended consequence of Section 432.3 may form should not be enlarged or reduced. False. be that refusal of talent to provide a quote may signal 3. Mail the answer sheet and the $20 testing fee 4. California does not have a history of enacting statutes a studio that the actual quote or desired compensation ($25 for non-LACBA members) to: to promote equal pay across the state. is low, thereby providing an advantage to more estab- Los Angeles Lawyer True. lished talent and their agents. MCLE Test False. True. P.O. Box 55020 Los Angeles, CA 90055 5. Criminal penalties are not available under the new False. Make checks payable to Los Angeles Lawyer. salary ban law, Labor Code Section 432.3, in California. 15. Virtually no agents in the entertainment industry 4. Within six weeks, Los Angeles Lawyer will True. are seeking voluntary waivers to avoid ambiguity about return your test with the correct answers, a False. salary information that has already been revealed. rationale for the correct answers, and a 6. It is permissible to consider salary history for deter- True. certificate verifying the MCLE credit you earned through this self-study activity. mining salary if an applicant voluntarily and without False. prompting discloses salary history to a prospective 16. Pay disparities among the top male and female 5. For future reference, please retain the MCLE test materials returned to you. employer. actors in the entertainment industry continue and can True. probably be explained by a number of reasons. ANSWERS False. True. Mark your answers to the test by checking the 7. It is not clear whether a general inquiry by an assistant False. appropriate boxes below. Each question has only one answer. at a studio about what actors typically earn for different 17. Websites like Glassdoor, Indeed, and Salary.com roles without having a particular actor in mind for an provide some compensation data for nontalent jobs upcoming job would violate Labor Code Section 432.3. but they are self-reported and usually not broken down 1. n True n False True. by gender. 2. n True n False False. True. 3. n True n False False. 8. Although determining pay scale may be difficult for 4. n True n False entertainment industry talent roles, larger employers 18. One reading of Section 432.3 would not permit a 5. n True n False may already have salary scales or salary bands for studio to verify what was paid to talent on the talent’s more traditional nontalent roles. last project for the same studio. 6. n True n False True. True. 7. n True n False False. False. 8. n True n False 9. An entertainment industry employer may not seek 19. Employers are not permitted to ask applicants for 9. n True n False salary history information, including compensation a role what compensation they are seeking, even if 10. n True n False and benefits, about an applicant for employment orally the employers do not inquire about prior salary or 11. n True n False or in writing but may do so through an agent. reveal the assigned value of a particular job. True. True. 12. n True n False False. False. 13. n True n False 10. Similar to the jurisdictional reach of New York 20. Employers in industries outside of entertainment 14. n True n False City’s salary history law, Section 432.3 limits its reach have expressed the view that Section 432.3 will have 15. n True n False to an interviewer, employer, applicant, or position little influence on their operations. 16. n True n False located in California. True. 17. True False True. False. n n False. 18. n True n False 11. Section 432.3 requires employers to disclose on 19. n True n False applications that they are prohibited from requesting 20. n True n False

Los Angeles Lawyer May 2018 25 entertainment industry employers rely on providing no guidance concerning those permitted to rely on it to determine salary. multiple sources of information to obtain who are recruited. The distinction, how- However, the standards to establish whether a fair assessment of talent. A producer ever, is illusory and overlooks the balance information is voluntary and “without merely looking to verify the last salary of of bargaining power between agents and prompting” are not clear. Some applicants an actress with a studio may be interpreted studios, along with the dynamics of how may feel pressure to disclose the informa- as “seeking” salary history under the new hiring—at least for talent—actually occurs. tion, which may raise questions as to the provision. In another example, an assistant It is unlikely that the California legislature voluntary nature of a salary history dis- making a few calls to work colleagues and intended such a distinction between indi- closure, even when the disclosure may unwittingly asking about salary information viduals affirmatively applying for a position appear on its face to be voluntary. Although for a prospective hire may be unknowingly and those who are recruited. It appears the statute makes clear that voluntary infor- violating the statute, even if the assistant that both categories may qualify as appli- mation given by the prospective candidate had no intention of gathering information cants, as the term is interpreted broadly can be used when determining an appli- for the purposes of negotiating the prospec- across the entertainment industry. cant’s salary, it is silent as to whether vol- tive hire’s salary. Generally, employers have more bar- untary information may be used to deter- California employers now cannot “seek gaining power during wage negotiations mine whether to even offer employment salary history information, including com- than individuals seeking a role, since em - to an applicant. pensation and benefits, about an applicant ployers dictate what they want to pay and Pay Scale and Job Location for employment” whether “orally or in whom they want to pay. This is true for writing” or “personally or through an most industries—not just entertainment— The statute also requires employers, upon agent.”22 Even relying on this salary history since the employee typically has less infor- “reasonable request” to provide a “pay as only “a factor” in determining whether mation and negotiating experience than scale” to the prospective candidate. This to hire the applicant or what salary to the hiring manager. The imbalance of power is an additional area of confusion for em - offer to pay the applicant is prohibited may not always be so clear-cut, however. ployers since the terms “pay scale” and under the statute.23 As written, the statute For example, agents who negotiate for the “reasonable request” are not defined. The makes it difficult to determine when the benefit of high-level job candidates like statute, as written, arguably may allow an salary request begins, since a studio may actors and directors are usually very sea- employer to provide a potential candidate not necessarily know who will be consid- soned, which presumably makes the bal- a pay scale of $1 to $1 million, and this ered an applicant when considering talent ance of power a little more equal for par- may be considered a pay scale as re quired for a particular project. It is also unclear ticipants in the entertainment industry than under the statute. In regard to hiring of under what circumstances an employee of for employees in other industries. In con- talent in the entertainment industry, a pay a studio or production company may be trast, high-level prospective candidates at scale may be difficult to determine, since acting as an agent of his or her employer, tech companies usually do not have expe- it may be unclear what is included as “pay,” or whether violations by casting directors rienced negotiators representing them when considering that talent contracts consist of or other third parties working on a project negotiating salary with hiring managers. different forms of fixed and contingent will trigger violations by the studio. For Another possible area for confusion in compensation. example, an eager entry-level studio assis- the entertainment industry relates to loan- Generally, historical wage ranges even tant or a person in a similar role in a out corporations that are often established of current employees are not required. An casting department looking for an upcom- by talent mainly for tax purposes to provide employer may even provide a range that ing project’s actors may make a few calls professional services to a third party, e.g., is considered within the industry standard off work hours to talent agents. To spark a studio. Although the talent is an employee and is higher or lower than what is expected interest in the role, the assistant may ask of the loan-out corporation instead of the of the specific applicant. Alternatively, an agents how much actors are generally being studio, it is likely that these loan-out cor- employer may provide a pay scale based paid for a role. On its face, this inquiry poration employees may also be subject on experience or education, which may in may seem like a violation of the statute to the new statute since there is still an that particular industry include a historical since employers are not allowed to “seek employment relationship, albeit indirectly, gender disparity. Larger entertainment salary history information;” however, the with the studios. More importantly, the industry employers may already have salary statute does not address the issue of gen- goals of the statute are not focused on the scales or salary bands for more traditional erally gathering background to seek out status of employees but rather applicants nontalent roles that are similar to other salary data, even when there is no specific for employment. The legislative intent was industries, such as a salary band for persons person or applicant in mind for a role. plainly aimed at helping assure that qual- who work in different levels in promotions, ified candidates for employment of different marketing, production, finance, or even Applicant Issue genders or backgrounds are paid fairly and legal departments. Compliance with these The applicant issue is also difficult to equally for similar work. It is not likely types of roles and requests—if they are determine. A studio may unilaterally de - that there was any intent to exempt a made—will be much easier than for unique termine whom it wants to pursue for a “loaned out” employee of a loan-out cor- talent positions. role rather than the talent requesting the poration from the protections of the law. The guidance provided to employers role. In this scenario, the talent technically The statute provides for a single excep- under the New York City salary history has not applied for, or sought out, the tion, which may be a source of widespread law specifically limits the reach of the ban position. Is it then legal for the studio to confusion for entertainment industry pro- to inquiries occurring during a job interview request a quote from the talent’s represen- fessionals involved in hiring. This exception in New York City or outside New York tative in contemplation of consideration involves applicants who “voluntarily and City when an impact will be felt in New for the role? As written, the statute merely without prompting” disclose salary his- York City. In California, however, it is seems to address those persons who are tory.24 Only when the employee voluntarily unclear from the statute if the interviewer, affirmatively applying for a position while provides this information is the employer employer, applicant, or the position must

26 Los Angeles Lawyer May 2018 be located in California. This can become sented by many of the same agents. Spe - information, the studio is merely verifying an issue if a potential applicant who is not cifically, there is a roughly $40 million volunteered information and may there - selected brings a claim seeking damages difference between the highest paid actor fore be within the exception in the statute. from a prospective employer alleging that and actress for the 2017 fiscal year.25 Salary information voluntarily given to a he or she was illegally asked about prior Forbes magazine reported that the high- studio is permissible under the new law. salary and did not receive a job offer be - est-paid actor in Hollywood—Mark Wahl - If a past quote is particularly favorable cause of this violation. It is quite possible berg—received $68 million while Emma for a client, agents may find it in their that to circumvent this statute, some em - Stone—the highest-paid actress—received best interest to provide the quote. How - ployers may simply move the process out $26 million. Stone is only 15th on the list ever, in many instances, the quote may be of state for selection purposes. For example, of the highest paid actors in Hollywood. lower than the amount that talent wants a company in Texas may search for talent Many reasons can be cited to explain a to earn on a new production, and the in Texas, but the ultimate position may be pay disparity of this magnitude, including agent may seek to withhold this inform - located in California. Although unlike - negotiating lev erage, as well as the types ation. An unintended con sequence of ly, these types of scenarios highlight the of roles available to women of different Section 432.3 in the entertainment industry statute’s ambiguity. Ultimately, it is probable ages and experience. may be that refusing to provide a quote that the law will be focused on the place By itself, Section 432.3 does not seem signals to the studio that the quote will of the harm or location of the prospective likely to significantly decrease the female be low. As may be the case already, estab- role itself rather than the physical location pay gap for comparable male and female lished talent may more freely volunteer of the applicant. high-profile roles in Hollywood. However, compensation information through their Section 432.3 places the onus on em - the law may encourage better trans parency agents leaving those with less renown to ployers to inform and train their hiring and has already affected whether agents fall back on withholding quotes, citing the teams on the impact of the ban on request- disclose a client’s quote, sometimes refusing statute as a prohibition. How this will shake ing salary history. For example, simply to provide the information at all. The law out and impact long-standing industry prac- disseminating a memorandum to prohibit is expected to have the desired effect on tices is un known, but it may be that, at asking about salary history, setting up a nontalent and support positions, e.g., sales, least at the talent level, pressure exists to reminder to human resources, and deleting marketing, publicity, distribution, finance, sign waivers to allow agents to disclose and the salary history questions on job appli- postproduction, and editing, thus requiring studios to receive prior salary history in cations may help to decrease exposure. companies to develop methods within order to increase the possibility at arriving There is no posting or notice requirement their compensation structures to assign at a number that makes sense for a particular for this statutory change, which means value to jobs rather than basing compen- project. that there is no obligation for employers sation on what an applicant discloses as Another unknown aspect of the new to disclose on their applications or other his or her prior salary and using that as a law is whether Section 432.3 will have the job boards that they cannot ask for salary floor or benchmark. effect of studios’ modifying how they obtain history. and receive compensation information, even Salary Verification Predictably, the statute potentially ex - from their own records. For example, stu- poses employers to expensive litigation for One of the most immediate effects of Section dios now can view publicly available data broad penalties available for Labor Code 432.3 on Hollywood deal-making concerns about talent compensation, to the extent violations under PAGA. Specifically, al - the agent salary verification process, when they believe it is accurate and relevant. This though damages to a single plaintiff may studios attempt to determine whether a information is widely available on the be low compared with a class action, em - quote by an agent or talent is accurate. Internet and on services like IMDb, Studio ployers still may face large exposure in Under the new law, studios can no longer System, and Variety Insight, which in some regard to a single plaintiff and embarrassing simply ask talent agents for quotes on what cases provide salaries for artists on prior publicity. For example, an actress who clients made for previous projects. Similarly, projects. For a specific artist, this will most finds out after production has begun that under the statute, re questing the information likely be a violation as looking at these sites she is being paid significantly less than a from an outside source may also be an may be challenged as “seeking” salary his- male counterpart may claim that her agent impermissible way to discover past com- tory information. Further, for nontalent revealed her quote without her consent. pensation for an applicant. Generally, under roles, websites like Glassdoor, Indeed and In this scenario, both the agent and studio the statute agents must receive consent from Salary.com provide some compensation may arguably be liable for damages. In a client to disclose such information and data, although, again, reliability of self- addition to PAGA claims, discrimination an expansive reading of the statute appears reported wage information may be suspect. lawsuits asserting violations of the Calif - to permit an agent to do so, with the client’s The statute also may be read to pro hibit ornia Fair Pay Act may be included as ad - consent, as part of a voluntary disclosure. a studio from even verifying what was paid ditional claims. Even though the statute prohibits employers to talent on the last project at that studio, from requesting salary information, agents since to do so may be an example of seeking Gender Pay Gap may still find themselves volunteering prior salary history information “personally or The intent of the legislature when enacting salary information to a studio or production through an agent.” Contracts with talent this statute was largely to create a more company. However, the issue of whether who already worked for a studio may not level playing field during the negotiation such a disclosure with the client’s permission be reviewable for purposes of seeing whether process as well as correct any past in - is “without prompting” as required by the it is relevant to the proposed compensation equities in pay, primarily to benefit women statute and a loophole that results in the on his or her next film or series. but also historically underpaid minorities agent’s speaking “voluntarily” for the client What Employers May Ask or any other applicant. Pay disparities in without having been asked or “prompted Hollywood have been in the news lately, by an employer” remains. Employers—including entertainment com- even when women and men are repre- Arguably, once the agent has given this panies—are not completely adrift in devel-

Los Angeles Lawyer May 2018 27 oping an informed opinion about what a little influence on their operations.26 effect. The impact on the myriad of other position should pay and what an applicant As with any new law, the devil is in the nonunion jobs in Holly wood will not be should receive. It is certainly permissible details and that is true with Section 432.3. insignificant and will promote transparency, to ask an applicant what compensation Its application to long-standing practices hope fully helping to create a level playing range they are looking for without further in Hollywood will not be known until there field for women and other groups who his- asking if that is what was earned at the is sufficient time and experience and per- torically lag behind in starting wages, which last job. Employers who make the effort haps even litigation and appellate interpre- may carry with them throughout their to assign a value to a role in terms of a tation of the intent behind the law and its careers. n range may also freely provide that infor- application to unique industries, for exam- mation to the applicant. Additionally, hiring ple, entertainment. Initi ally, some predict 1 LAB. CODE §432.3. personnel should be clear on what they an impact on the way salary or wage infor- 2 Mike Fleming, Jr., It Will Soon Be Illegal For Studios can afford to pay a candidate as well as mation is exchanged by talent representa- to Verify Salary Quotes: Hollywood Dealmakers Brace for California Labor Code 432.3 EADLINE the market rate for the position. Many em - tives who are sophisticated in negotiations, , D HOLLYWOOD, Dec. 13, 2017, http://deadline.com. ployers in other industries have expressed and the entertainment industry has already 3 Id. the view that this new statute may have observed some of these changes taking 4 Id. 5 Id.; Ashley Cullins, How a New Ban on Asking About Salary History Could Help (and Hurt Women), THE HOLLYWOOD REPORTER, Jan. 18, 2018, available at https://www.hollywoodreporter.com/news/how-a -new-ban-asking-salary-history-could-help-hurt-women -1075134. 6 Salary History Questions During Hiring Process are Illegal in NYC, NYC Human Rights, https://www1 .nyc.gov/site/cchr/media/salary-history.page (last viewed Mar. 16, 2018). 7 Madison Alder, Amazon, BofA, Join Employers That Won’t Ask for Pay History, BLOOMBERG, Jan. 30, 2018, https://www.bna.com/amazon-bofa-joinn 73014474845. 8 LAB. CODE §432.3 9 LAB. CODE §1197.5. 10 Amending LAB. CODE §1197.5, S.B. 358, Cal. Legis - lative Info., available at https://leginfo.legislature .ca.gov/faces/billTextClient.xhtml?bill_id=201520160S B358 (last viewed Mar. 16, 2018). 11 LAB. CODE §1197.5, as amended by SB 358. 12 LAB. CODE §1197.5. 13 Áine Cain and Anaele Pelisson, 9 places where peo- ple may never have to answer the dreaded salary ques- tion again, BUSINESS INSIDER, Oct. 26, 2017, http: //www.businessinsider.com. 14 Tit. 8, Admin. Code of the City of N.Y., ch. 1 §8- 107 (25), Comm’n on Human Rights, available at https://www1.nyc.gov/assets/cchr/downloads/pdf /NYHRL_Nov.%2027,%202017.pdf (last viewed Mar. 16, 2018) [hereinafter Tit. 8]. 15 Salary History Law: Frequently Asked Questions, NYC Human Rights, https://www1.nyc.gov/site/cchr /media/salary-history-frequently-asked-questions.page (last viewed Mar. 16, 2018) [hereinafter Salary History Law]. 16 Tit. 8, supra note 14. 17 In addition, Oregon’s ban permits employees to sue for unpaid wages starting in January 2024, and San Francisco’s ordinance comes with a $100 to $500 fine per violation after an initial warning and notice to correct for the first violation. 18 LAB. CODE §432.3. 19 LAB. CODE §§2698 et seq. 20 LAB. CODE §432.3. 21 Id. 22 Id. 23 Id. 24 Id. 25 Salary History Law, supra note 15. 25 Natalie Robehmed, Full List: The World’s High - est-Paid Actors And Actresses 2017, FORBES, Aug. 22, 2017, https://www.forbes.com. 26 Jenna McGregor, Employers don’t think bans on asking about salary history will achieve goal, survey says, L.A. TIMES, Nov. 17, 2017, available at http://www.latimes.com/business/la-fi-salary-history -workplace-law-20171116-story.html.

28 Los Angeles Lawyer May 2018

2018 EntertainmentLawIssue

by DREW WILSON SLANTS RULE Now that the prohibition against the use of vulgar, scandalous, or immoral language in branding has been struck down, similarly prohibited language may not be far behind

goes: “What’s in a name?” Office (USPTO) makes the mark searchable on the USPTO website. THE SAYING For a company looking to Any moderately sophisticated company searches the Trademark protect—or create—a brand, quite a lot. For companies operating Office before adoption of a trademark to ensure that they do not in edgier markets, a traditional trademark like Ford, Apple, or even invest tens, hundreds, or even millions of dollars in developing a Google will not let the brand stand out in a crowded field. Thus, mark to which a third party is already claiming trademark rights. A they choose to brand themselves with sharper, more shocking marks— search of the Principal Register not only reveals if a third party something that jumps out at the viewer, possibly in a way that may claims rights to a mark but also when the party first started using be considered scandalous, immoral, or disparaging. the mark, and if the third party cares enough about the continued Use of these types of marks is not without problems, however. use of the mark to file the necessary maintenance paperwork and Formerly, marks that fell within certain broadly defined categories fees to keep the mark’s status as “live.” that may have comprised “immoral, deceptive, or scandalous matter; Second, and almost as important, registration on the Principal or matter which may disparage or falsely suggest a connection with Register “is prima facie evidence of the validity of the registered mark persons, living or dead” were long prohibited from obtaining federal and of the registration of the mark, of the owner’s ownership of the registration under 15 USC Section 1052(a). While owners of a mark mark, and of the owner’s exclusive right to use the registered mark that might have been scandalous, immoral, or disparaging could sue in commerce on or in connection with the goods or services specified to defend these marks under a common law theory of trademark in the certificate.”3 Without the prima facie presumption of ownership, infringement, or even under Section 43(a) of the Lanham Act,1 lack any purported trademark owner must prove ownership of a valid of federal registration meant that users of these marks were missing trademark during the course of a lawsuit. For certain categories of many of the unique benefits conferred by federal registration. marks, such as those that are “descriptive” or based on product Chief among these benefits is constructive nationwide notice of design (trade dress) or color, this is accomplished by demonstrating the registrant’s claim of ownership of the mark.2 Registration on that the mark has acquired “secondary meaning” in the minds of the the Principal Register of the United States Patent and Trademark consuming public.4 In other words, the mark, color, or design has

Drew Wilson is an attorney with Lewis Roca Rothgerber Christie LLP in Glendale, California. His practice focuses on intellectual property litigation, as well as trademark portfolio maintenance and prosecution. HADI FARAHANI

30 Los Angeles Lawyer May 2018 come to signify the source, or origin of the in the marketplace in connection with the Amendment. As the Court made clear: “None goods. Often, this is accomplished via expen- goods or services.”15 The examiner then of our government speech cases even remotely sive surveys. For trade dress—a species of moves to the second step asking “whether supports the idea that registered trademarks mark that is based on the ornamental design that meaning may be disparaging to a sub- are government speech.”23 That is in part of a product—the trademark owner of an stantial composite of the referenced group.”16 because “[t]he Federal Government does not unregistered trademark must also demonstrate “If the examiner finds that a ‘substantial dream up these marks, and it does not edit that the design is not functional.5 composite, although not necessarily a major- marks submitted for registration.”24 “Trade - Third, after five consecutive years of con- ity, of the referenced group would find the marks have not traditionally been used to tinuous use, a trademark that has been reg- proposed mark…to be disparaging in the convey a Government message. With the istered on the Principal Register can file a context of contemporary attitudes,’ a prima exception of the enforcement of 15 U.S.C. § request to have that registration deemed facie case of disparagement is made out.”17 1052(a), the viewpoint expressed by a mark “incontestable.”6 Although “incontestability” Notable, too, is “[t]he fact that an applicant has not played a role in the decision whether is somewhat of a misnomer, the status pre- may be a member of that group or has good to place it on the principal register. And there “Speech that demeans...race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but…we protect the freedom to express ‘the thought that we hate.’” vents a registration from being attacked on intentions underlying its use of a term does is no evidence that the public associates the certain grounds. not obviate the fact that a substantial com- contents of trademarks with the Federal There is a plethora of other rights that posite of the referenced group would find Government.”25 are conferred as a result of federal registration, the term objectionable.”18 The government tried a few additional including the right to recover treble damages After reviewing dictionary definitions, arguments, none of which prevailed. It first for willful infringement,7 a complete defense which universally identified the term SLANTS tried to argue that the case should be ana- from state or common law claims of trade- as being disparaging to people of Asian ances- lyzed from the perspective that trademark mark dilution,8 the right to prevent cyber try, the mark was quickly rejected. The mark’s registration is a government program that squatters from misappropriating a domain offensiveness was further bolstered by the subsidized speech expressing a particular name,9 and the qualification for a simplified fact that the band’s name had been found viewpoint. The Supreme Court disagreed, process for obtaining international registra- offensive a number of times. The examiner reasoning that the cases that the government tions through the Madrid Protocol.10 Regis - cited to a number of bloggers who indicate cited all involved cash subsidies or their equiv- tration on the Principal Register also allows they find the term and applied-for mark alent.26 In contrast, applicants pay the gov- the trademark to be registered with U.S. offensive, and even found a performance by ernment in order to acquire a trademark reg- Customs and Border Protection. This gives the Slants that was canceled due to objection istration. Further, trademarks are not the the mark’s owner the ability to block the to their name.19 only government registration scheme. Copy - importation of goods that infringe the mark Tam appealed the decision to the Trade - rights too are the subject of registration, into the United States.11 mark Trial and Appeal Board, which upheld yet copyrights are at the heart of the First the examiner’s rejection. Tam then appealed Amendment.27 The SLANTS Trademark the board’s decision to the Federal Circuit, Finally, the government attempted to argue By now, most people in the intellectual prop- which heard the case en banc.20 The majority a new concept, that of a “government pro- erty community are familiar with the land- found that the disparagement “clause engages gram,” which simply merges the government- mark U.S. Supreme Court case of Matal v. in viewpoint-based discrimination, that the speech cases and the subsidy cases in order Tam.12 In Tam, the lead singer of an Asian clause regulates the expressive component to construct a broader doctrine.28 This too rock band attempted to register the trademark of trademarks and consequently cannot be was dismissed. SLANTS for “entertainment in the nature treated as commercial speech, and that the The Supreme Court declined to resolve of live performances by a musical band.”13 clause is subject to and cannot satisfy strict the question if trademarks were commercial “Slant” is considered to be a derogatory or scrutiny.”21 The Federal Circuit rejected the speech subject to intermediate scrutiny under disparaging term for people of Asian descent. government’s argument that registration con- Central Hudson Gas & Electric Corp. v. The singer wanted to “‘reclaim’ and ‘take stituted government speech and that it was Public Service Commission of New York.29 ownership’ of stereotypes about people of a form of government subsidy. Even if the The Court declined to debate the issue as Asian ethnicity.”14 disparagement clause were analyzed as though “the disparagement clause cannot with- During the review of Tam’s application, it were “commercial speech,” the clause stand even Central Hudson review.”30 Un - the USPTO examiner applied the traditional would still fail the intermediate scrutiny test. der Central Hudson, a restriction on com- two-part test to determine if the SLANTS Ultimately, the prohibition against registering mercial speech must serve a “substantial mark was disparaging. The examiner first disparaging trademarks was found uncon- interest,” and it must be “narrowly drawn.”31 considers “the likely meaning of the matter stitutional by the Federal Circuit under the The government argued that it is assert - in question, taking into account not only dic- First Amendment’s free speech clause.22 ing an interest in preventing underrepresent - tionary definitions, but also the relationship The Supreme Court agreed. It began by ed groups from being bombarded with de - of the matter to the other elements in the quickly dismissing the notion that a trade- meaning messages in commercial advertising. mark, the nature of the goods or services, mark registration was government speech Distilled to its most basic level, the “Govern - and the manner in which the mark is used not bound by the constraints of the First ment [claims it] has an interest in preven ting

32 Los Angeles Lawyer May 2018 speech expressing ideas that offend.”32 How - text of the marketplace as applied to only base identifying the marks approved ever, as the Supreme Court has “explained, the goods described in the application.’”41 for use in commerce.… The govern- that idea strikes at the heart of the First Amend- A “substantial composite of the general pub- ment fails to articulate a reason why ment. Speech that demeans on the basis of lic” needs to find the mark vulgar, scandalous, the government’s listing of registered race, ethnicity, gender, religion, age, disabil- or immoral, or a combination of all three, trademarks in a database creates a ity, or any other similar ground is hateful; in order for the mark to be rejected.42 A limited public forum. And if it did but the proudest boast of our free speech mark is determined to be vulgar, scandalous, then every government registration jurisprudence is that we protect the freedom or immoral, or a combination of all three, if program including titles to land, reg- to express ‘the thought that we hate.’”33 the mark was “shocking to the sense of truth, istration of cars, registration of wills The second interest that the government decency, or propriety; disgraceful; offensive; or estates, copyrights, even marriage argued was that of protecting the orderly disreputable;…giving offense to the con- licenses could similarly implicate a flow of commerce. The government claimed science or moral feelings;…or calling out for limited public forum.”52 that invidious discrimination is recognized condemnation.”43 The Federal Circuit then analyzed the to have an adverse effect on commerce. The The government conceded that the bar scandalous or immoral prohibition under Court countered this argument by pointing on scandalous marks was a content-based a strict scrutiny framework, reasoning that out that the clause is not narrowly drawn. restriction on speech.44 It then appeared to a trademark was more than merely com- It reaches any trademark that disparages any ignore the Supreme Court’s holding in Tam mercial speech subject to intermediate scru - person, group, or institution (including racists by arguing once again that trademark regis- tiny because trademarks also often have an and cancer).34 “It is not an anti-discrimination trations were a form of a government subsidy expressive component.53 Indeed, the test clause; it is a happy-talk clause. In this way, program.45 This was quickly dismissed by for the immoral or scandalous prohibi tion it goes much further than is necessary to the Federal Circuit.46 that evaluates the marks to determine if they serve the interest asserted.”35 The government next tried to argue that convey offensive ideas is targeted at the Ultimately, the disparagement clause was the trademark registration process was akin mark’s expressive component.54 The Federal found to violate the free speech clause of the to a limited public forum subjecting content- Cir cuit then found wisdom in the Supreme First Amendment. based restrictions on speech to a lower degree Court’s statement in Tam that “[t]he central of scrutiny.47 The Federal Circuit disagreed: purpose of a trademark registration is to Trademark Post-SLANTS “The Supreme Court has found the existence facilitate source identification.… Whether a The prohibition against disparaging marks of a limited public forum only when the gov- mark is disparaging bears no plausible rela- was found to be constitutionally vague, but ernment restricts speech on its own property. tion to that goal.”55 The same holds true for what about the other limitations on regis- At one end of that spectrum are venues that scandalous and immoral marks.56 tration of marks? What about marks that are owned and controlled by government Because the Supreme Court did not state are scandalous or immoral? Can I have a entities.”48 These include schools, telephone whether or not the restrictions on trademarks registration for a T-shirt that tells the viewer poles, and military bases.49 At the other end should be analyzed under strict or interme- to F*%# OFF? What about an image of an of the spectrum, there are “metaphysical” diate scrutiny—as the disparagement clause erect penis as a trademark for a strip club? limited public forums, but even in those failed both—the Federal Circuit proceeded These questions and more were left unan- instances “the effect of its restrictions on to analyze whether the prohibition on scan- swered, but given that the disparagement speech were felt on the government’s prop- dalous or immoral marks would survive inter- clause fell even under the lower intermediate erty.”50 The example that was given was a mediate scrutiny. As with the disparagement scrutiny standard of Central Hudson, com- restriction on a university’s distribution of prohibition in Tam, the prohibition against mentators believed that the prohibition funds through a student activities fund in - scandalous or immoral marks did not satisfy against scandalous and immoral trademarks tended to support a broad range of extracur- the “substantial interest” prong of Central would fall as well.36 ricular student activities that are related to Hudson:57 The prediction turned out to be correct. the educational purpose of the university. First, the government does not have On December 15, 2017, the Federal Circuit Any restrictions on the distributions of these a substantial interest in promoting cer- issued its ruling in In re Brunetti, holding that funds would undeniably be felt on the uni- tain trademarks over others.… Second, the “immoral and scandalous” provision of versity campus, which was itself a limited Supreme Court precedent makes clear the Lanham Act did not advance a substantial public forum.51 that the government’s general interest government interest, striking that provision The Federal Circuit went on to state: in protecting the public from marks as an unconstitutional infringement of the Because trademarks are by definition it deems ‘off-putting,’ whether to pro- free speech clause of the First Amend ment.37 used in commerce, the trademark reg- tect the general public or the govern- In Brunetti, the applicant was attempting istration program bears no resem- ment itself, is not a substantial interest to register the mark FUCT for clothing.38 blance to these limited public forums. justifying broad suppression of speech. The application was initially rejected for The speech that flows from trademark ‘[T]he fact that society may find speech being vulgar, which is sufficient to show that registration is not tethered to a public offensive is not a sufficient reason for it consists of immoral or scandalous matter.39 school, federal workplace, or any other suppressing it.’”58 “A showing that a mark is vulgar is sufficient government property.… That regis- “Finally, the government does not have to establish that it ‘consists of or comprises tered marks also appear on the gov- a substantial interest in protecting the public immoral…or scandalous matter’ within the ernment’s principal register does not from scandalousness and profanities.”59 meaning of section 1052(a).”40 transform trademark registration into The case at bar was different from the What makes a mark vulgar and, therefore, a limited public forum. The govern- content-based restriction on broadcast pro- scandalous and immoral is a moving target. ment does not open the principal reg- fanity of FCC v. Pacifica Foundation.60 Unlike The “PTO makes a determination as to ister to any exchange of ideas—it is public broadcasts over the radio, which are whether a mark is scandalous ‘in the context ancillary to trademark registration. injected into the homes of listeners nation- of contemporary attitudes’ and ‘in the con - The principal register is simply a data- wide, “[a] trademark is not foisted upon lis-

Los Angeles Lawyer May 2018 33 teners by virtue of its being registered. Nor are likely to survive constitutional scrutiny. But who cares? It is ultimately the consumers’ does registration make a scandalous mark First, “[t]he purpose of the Lanham Trade- choice if they want to support a company more accessible to children.”61 mark Act…is to prevent consumer confusion that resorts to profanity, racism, or vulgarity There is also inconsistency in the appli- or deception about the origin or make of a to promote their products. Let the free market cation of the prohibition that makes the bar product.”67 A mark that is “deceptive” or decide what an appropriate trademark is, on scandalous or immoral marks fail the that “falsely suggests a connection with per- not an examiner who is inconsistently apply- final prong of the Central Hudson test. That sons” clearly “creates consumer confusion ing an arbitrary test. n is, whether the restriction on speech “is not or deception about the origin or make of a more extensive than is necessary to serve [a product.” 1 Matal v. Tam, 137 S. Ct. 1744, 1752-53 (2017). substantial government] interest.”62 “The Second, there is not a concern that the 2 B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Trademark Trial and Appeal Board has itself prohibition against “deceptive” marks or Ct. 1293, 1300 (2015) (citing 15 U.S.C. §1072(b)). 3 B & B Hardware, 135 S. Ct. at 1300 (citing 15 noted the vague and subjective nature of the marks that “falsely suggest a connection with U.S.C. § 1057(b)). 63 scandalous inquiry.” For example, The persons” might run afoul of the First Amend - 4 Wal-Mart Stores, Inc. v. Samara Bros, Inc., 529 U.S. mark for MILF—an acronym for “Mom I’d ment. This is because the Supreme Court has 1339, 1344 (2000). Like to F*$#”—was rejected 20 of 40 times consistently held that “false and misleading 5 15 U.S.C. §1125(a)(3). and allowed the other 20.64 There is simply commercial speech is not entitled to any First 6 15 U.S.C. §1065. 7 no definition of the term scandalous that Amendment protection.”68 “[T]he State may 15 U.S.C. §1117. 8 15 U.S.C. §1125(c)(6). would allow the prohibition to survive under ban commercial expression that is fraudulent 9 15 U.S.C. §1125(d). even intermediate scrutiny.65 Therefore, as or deceptive without further justification.”69 10 Protocol relating to the Madrid Agreement Con - the Brunetti court found, it is unconstitu- There is after all, a substantial government cerning the International Registration of Marks, as tional.66 interest in preventing confusion in the con- amended on September 28, 1979, 828 U.N.T.S. 389; suming public and encouraging companies see International Applications/Madrid Protocol FAQs, USPTO, https://www.uspto.gov (last viewed Mar. 21, Deceptive Marks 70 to invest in their brands. 2018). With three of the major prohibitions of The prohibitions against disparaging, 11 15 U.S.C. §1124; 19 U.S.C. §1526. Section 2(a) struck down as unconstitutional, scandalous, and immoral marks are gone. 12 Matal v. Tam, 137 S. Ct. 1744 (2017). the next logical question is what will happen The Trademark Office should expect a flood 13 U.S. Trademark Application No. 85/472,044 (filed with the two “deceptive” prohibitions, namely of profanity-laced, racist slogans about sex Nov. 14, 2011). 14 Tam, 137 S. Ct. at 1754. the prohibition against marks that are “decep- at any moment. Less than a month after the 15 Id. at 1753 (citing USPTO, Trademark Manual of tive” or that “falsely suggest a connection decision in Brunetti, there were 63 applica- Examining Procedure §1203.03(b)(i), 1200–150, (Apr. with persons, living or dead”? The answer tions for marks containing the word “FUCK” 2017), available at http://tmep.uspto.gov). should be straightforward. These prohibitions in its full, uncensored, and proper spelling. 16 Tam, 137 S. Ct. at 1753-54.

34 Los Angeles Lawyer May 2018 17 Id. at 1754. 18 Id. 19 Id. 20 Id. 21 Id. (citing In re Tam, 808 F. 3d 1321, 1334-55 (C.A. Fed. 2015)). 22 Tam, 137 S. Ct. at 1754. 23 Id. at 1759. 24 Id. at 1758. 25 Id. at 1760. 26 Id. at 1761. 27 Id. 28 Id. 29 Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 477 U.S. 557 (1980). 30 Tam, 137 S. Ct. at 1764. 31 Id. 32 Id. 33 Id. (citation omitted). 34 Id. at 1764-65. 35 Id. 36 See, e.g., Drew Wilson & Gary Nelson, The Best F*ing Sports Blog Period, The Sports & Outdoor Recreation Blog By Lewis Roca Rothgerber Christie EMPLOYMENT LAW REFERRALS (Sept. 13, 2017), https://blog.lrrc.com/outdoor Paying Highest Referral Fees (Per State Bar Rules) /2017/09/13/best-fing-sports-blog-period. 37 In re Brunetti, 877 F. 3d 1330 (Fed. Cir. 2017). 38 Id. at 1335. 39 Id. at 1339 (citing In re Fox, 702 F. 3d 633, 635 Honored to receive regular employment referrals from (Fed. Cir. 2012). over 100 of Californiaʼs fi nest attorneys 40 In re Boulevard Entm’t, Inc., 334 F. 3d 1336, 1340 (Fed. Cir. 2003). 41 Brunetti, 877 F. 3d at 1336 (citation omitted). Stephen Danz 877.789.9707 42 Id. & Associates 43 Id. (citation omitted). Main offi ce located in Los Angeles and nearby offi ces in Pasadena, Orange County, Inland Empire & San Diego 44 Id. at 1342. 45 Id. at 1342-45. Stephen Danz, Senior Partner 11661 San Vicente Boulevard, Suite 500, Los Angeles, CA 90049 46 Id. at 1345. 47 Id. 48 Id. at 1346 (citation omitted). 49 Id. at 1346-47. 50 Id. at 1347. 51 Id. (citing Rosenberger v. Rector & Visitors of Univ. S of Va., 515 U.S. 819, 824-30 (1995)). GL Howard and Company CPA , LLP 52 Id. at 1347-48. 53 Brunetti, 877 F. 3d at 1349 (citing Matal v. Tam, 137 S. Ct. 1744, 1760 (2017)). EFFECTIVE 54 Brunetti, 877 F. 3d at 1349. 55 Id. (citing Tam, 137 S. Ct. at 1768 (Kennedy, J.)). SUPPORT FOR 56 Brunetti, 877 F. 3d at 1349. 57 Id. at 1350. WHITE COLLAR 58 Id. at 1351 (quoting Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 55, 108 (1988)). ISSUES 59 Brunetti, 877 F. 3d at 1349. 60 FCC v. Pacifica Found., 438 U.S. 726 (1978). 61 In re Brunetti, 877 F. 3d at 1353. 562.431.9844 • www.glhowardandcompanycpas.com 62 Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 477 U.S. 557, 566 (1980). 63 Id. In re Brunetti, 877 F. 3d at 1354. (citation omit- ted). 64 Id. 65 Id. at 1356. 66 Id. at 1357. 67 Parfums Givenchy, Inc. v. Drug Emporium, Inc., 38 F. 3d 477, 484 (9th Cir. 1994); Sterling Drug, Inc. v. Bayer, AG, 14 F. 3d 733, 746 (2nd Cir. 1994) (“Lanham Act’s goals of protecting American con- sumers against confusion”). 68 Central Hudson, 447 U.S. at 593. 69 Edenfield v. Fane, 507 U.S. 761, 768 (1993); E. & J. Gallo Winery v. Gallo Cattle Co., 967 F. 2d 1280, 1297 (9th Cir. 1992) (there is no First Amendment defense to actions otherwise infringing because “mis- leading commercial speech can be restricted”). 70 Pearson v. Shalala, 164 F. 3d 650, 656 (D.C. Cir. 1999).

Los Angeles Lawyer May 2018 35 closing argument BY JAMES E. MCMILLAN

The FCC’s Worrisome Repeal of Net Neutrality Rules

I AM WORRIED. In fact, I am very worried. I’m worried because lectual property will be given a fair chance to see the light of day net neutrality, the policy that has allowed content providers— in an open environment. But it goes even deeper than that. and thus consumers—to enjoy equal access to the Internet, is Net neutrality allows organizations and movements with good threatened by the FCC’s recent ruling that broadband providers intentions but perhaps limited resources to tell their story without like AT&T, Comcast, and Verizon, be reclassified as lightly reg- censorship, to make a case for a meaningful cause, to demand ulated information providers instead of closely regulated telecom- fair treatment, and to awaken the masses when necessary. Should munications companies.1This would allow the telecoms to favor ISPs really have the right to determine who is heard? or disfavor and control content delivered to consumers and at Fortunately, the lawsuits are coming. U.S. Senate Minority what download speeds. The telecoms will have the power to Leader Chuck Schumer of New York is attempting to pass legis- throttle, or slow down, content they disfavor or that is not paying lation that will undo the FCC’s ruling. Major creative organizations for premium access. The implications of this frighten me on such as the Writer’s Guild of America, the Directors Guild of several levels. It threatens the way I practice law, run my businesses, America, the Independent Film and Television Alliance, and the and spend my leisure time. Most importantly, it threatens the Internet Association (which claims powerful members such as futures of many of my clients. Google, Facebook and Amazon) have voiced their concerns. During my career, I have been the lawyer for such acts as New York Attorney General Eric Schneiderman said he filed New Edition and Justine Skye, and the production partner of a lawsuit in December because the FCC “broke essentially all the Machine Gun Kelly. But for every such musician, I have represented rules of the administrative process. Agencies aren’t just allowed scores of other talented individuals whose opportunities for success to make any arbitrary decision. In fact, courts have held that if a were made possible through an open Internet. These are the folks decision is arbitrary and capricious…it has to be rejected.”3 who rely on the Internet’s ability to allow start-up production Indeed, questions have been raised as to whether the FCC companies to tout their wares, who bank on the World Wide based its decision to overturn Title II of the Telecommunications Web to provide promotion and merchandising opportunities, and Act on a faulty premise—that ISPs were information providers who count on an equal access system to sell concert tickets. (versus telecommunications companies) and thus not subject to Yet, FCC Chairman Ajit Pai claims that by eliminating net regulations imposed by the FCC. neutrality, “[b]roadband providers will have stronger incentives An open Internet is the natural evolution of the values we to build networks, especially in unserved areas, and to upgrade hold dear. Keeping it that way is about who we are as a people. networks to gigabit speeds and 5G.”2 As Chad Dahlstrom, CEO of Discogs, the online music marketplace, This may or may not be true, but it must be weighed against stated: the fact that musicians without major recording contracts will The idea that all information online aka data should be no longer be able to share their talents with an enthusiastic treated equally is one of the core principles in an open audience. While proponents of the new approach claim that internet. Threats to that principle are threats to open dia- “competition” and antitrust laws will preempt the inclinations logue, freedom of speech and the ability to choose what of Internet service providers (ISPs) to block or throttle content and how you get information online. We should not allow provided by smaller enterprises (in this case, musicians and pro- content to be throttled, blocked or removed based on a duction companies), the costs to get on the “fast lane” of Internet telecom or influential individuals’ decisions. That is an connectivity will prove an intolerable burden. For proof, one open door to censorship and big corporations once again need only look to the payola schemes of radio networks that only choosing what we can see, hear and learn about.4 play music the well-heeled can afford to finance. Ditto for paid This is why, as a lawyer, an entrepreneur, and a citizen, I am prioritization and the high entry costs of starting a new cable more than just a little worried about where we are heading. n station. In short, under the FCC’s new ruling, the Verizons and AT&Ts of the world will be able to determine what we watch 1 Restoring Internet Freedom, 83 Fed. Reg 7852 (Apr. 23, 2018). and what we do by charging fees based on the user, the application, 2 Jacob Kastrenakes, Read FCC Chairman Ajit Pai’s Statement on Killing Net the content, the platform. Neutral ity, THE VERGE, Dec. 14, 2017, https://www.theverge.com/2017/12/14 Because of technology, producing music today costs less than /16777626/agit-pai-net-neutrality-speech. 3 Interview with Eric Schneiderman, All In with Chris Hayes, MSNBC, Dec. 14, ever. That will change with this ruling. Although I am an enter- 2017. tainment law attorney concerned about opportunities for musicians, 4 Colin Stutz, Music & Tech Industries Say FCC’s Net Neutrality Vote Will I am also a consumer of Internet content who may not be able to ‘Negatively Affect Innovation,’ BILLBOARD, Dec. 14, 2017. keep the access I currently enjoy or will have to pay a premium to do so. As an entrepreneur, I worry about the opportunities I James E. McMillan is an entertainment lawyer, entrepreneur, and business will have to locate and discover new talent and whether my intel- executive based in New York.

36 Los Angeles Lawyer May 2018