SWITCHING STATIONS: THE BATTLE OVER NON-COMPETE AGREEMENTS IN THE BROADCASTING INDUSTRY.

2002 by Marlo Brawer

As published in the Summer 2002 issue of the Oklahoma City University Law Review

I. INTRODUCTION Paula Zahn nearly doubles her salary moving from Fox News Channel to CNN. Ten-

year CNN correspondent, Steve Harrigan, reports from Afghanistan for CNN on Saturday, then switches to Fox News Channel on Sunday.2 Geraldo Rivera walks away from a lucrative CNBC deal to work for Fox News Channel.3 These high powered, high profile broadcast journalists can move from one station to a direct competitor without any restrictions. Yet, thousands of

broadcast journalists who report local news at television stations around the United States, and who make a fraction of Zahns, Harrigans and Riveras salaries, cant move from one station to another in the same city because they were required to sign non-compete agreements. Non-compete agreements are not new. While covenants not to compete have been disfavored by courts since the practice of requiring such agreements first began, many states now uphold agreements restricting an employee from pursuing his profession with a competitor if the agreement is reasonable and if it protects an employers legitimate business interests such as client lists, confidential information, or trade secrets. The problem with non-competes in the broadcast industry is that they are being upheld even though stations are unable to define comparable business interests that need to be protected. Therefore, state legislatures have begun

to respond by passing legislation to invalidate non-compete agreements specifically in the broadcast industry. This note will explore the history of the non-compete agreement, from common law to state statutes that attempt to make them unenforceable. Some states that do not have statutes regarding non-compete agreements in all fields have passed state laws specifically to invalidate these agreements in the broadcasting industry because they are thought to pose an undue burden on employees. This note will focus on the trend to protect broadcast industry employees from non-compete agreements because of the uniqueness of the industry and it will examine why statutes barring non-compete agreements are necessary to promote the welfare of those who work as broadcast journalists. II. EARLY NON-COMPETE AGREEMENTS A. Common Law Non-compete agreements date back to early English law, when in 1415, the court invalidated an agreement that would have kept a dyer from using his craft.4 There was no discussion back then as to geographic scope or duration of the non-compete, nor was there any importance attached to whether the non-compete agreement was part of an employment contract or a separate promise.5 restraints.6 Beginning in the Eighteenth Century, courts started to relax the blanket prohibition of non-compete agreements if the restraint was agreed to upon good and adequate consideration and if the restraint was considered reasonable.7 However, an agreement is not necessarily reasonable just because it is made upon good and adequate consideration and has limited time restrictions. Time restraints, such as stopping a person from competing for a few months or a The common law courts simply would not enforce no-compete

year, is not sufficient by itself because the limitation could unreasonably span too broad of an area.8 It wasnt long before plaintiffs figured out that, if they added a space limitation to the covenant, the agreement could be upheld. Soon, however, this kind of caution became

unnecessary. English courts changed precedent and started to find the restraints reasonable, no matter how long the duration or how wide the geographic scope. The House of Lords in Nordenfelt v. Maxim Nordenfelt, Co. enjoined a defendant from breaching a non-compete agreement after selling his gun manufacturing and ammunition business even though the covenant presumably restrained competition worldwide for twenty-five years.9 United States courts would most likely not have agreed with the House of Lords upholding this complete restriction because the magnitude of the covenant was too far reaching and could be considered a monopoly or restraint of trade.10 A covenant-not-to compete is more easily upheld when it is partial because the restraint still allows a person to continue to practice his trade in some respect.11 But most covenants are not partial; they are complete blocks to pursuing a particular profession for a certain period of time within a specific geographic area. If the consideration requirement, which is needed in every contract, is satisfied, courts following common law will balance the businesss legitimate interests with the reasonableness of the covenant based on geographic scope, duration, and range of activities prohibited.12 B. Reasonable Restrictions Courts believe the restraint imposed in these agreements can be sufficiently broad to protect the employer, though not too broad to cause the employee undue burden. But there is no bright line rule to determine how long a person can be restrained from working at a competitors

place of business or for how wide in geographic scope that restriction can be before it interferes too much with an employees ability to pursue an occupation. The cases are fact specific with the validity depending on the state and the profession. Courts have upheld covenants not to compete that keep an employee from competing for as little as six months to as long as seven years within a geographic area of hundreds of miles.13 Many courts find time and geographic restrictions inseparable in determining what is reasonable and what is unduly burdensome, but generally they side with the employer. A three year covenant not to compete in an entire industry may be valid in Connecticut, especially when the geographic restriction is minimal.14 Michigan courts have upheld restrictive covenants from six months to three years.15 Michigan courts are not convinced that an unlimited geographic scope, prohibiting an employee from working nationwide or world-wide, is unduly burdensome either, if the nature of the business is sufficiently national and international in scope.16 Most covenants prohibit an employee from working in the same industry for a competitor. Some, though, will just restrain the employee from working in the exact same position. Either way, the courts look carefully at how the nature of the activity to be performed affects competing social interests. C. Balancing Social Interests Social interest objections to non-competes are rooted in history; they date back to the very first agreements, which were held invalid because they divest the promisor of his means of earning a livelihood and supporting himself and his family, which in turn will deprive the community of the benefit of his services.17 Furthermore, the community is deprived of the competition that his services may bring to the area.18 As the restraint increases in time and space, these objections are considered more carefully and given much more weight.19

Those objections must overcome the interests in enforcing the agreement. Early cases found covenants not-to-compete to be reasonable if they were ancillary to the main purpose of a lawful contract and necessary to protect the covenantee in the enjoyment of the legitimate fruits of the contract, or to protect him from the dangers of an unjust use of those fruits by another party. 20 Therefore, the employer seeking to enforce such a covenant must identify a protectable interest. Employers do not have a protectable interest in avoiding ordinary competition. There must be some reason why it would be unfair to allow the employee to compete with the former employer.21 Mostly, states stop an employee from competing if the employee has gained some advantage at the employers expense that the employee would not have gained but for the employment.22 Every state identifies a different combination of protectable interests, which include investment made in training or education of the employee, protection of confidential information and trade secrets the employee would otherwise not have access to but for employment, as well as the protection of customer retention and customer relationships, which is most often referred to as the good will of a business.23 In all states that still rely on common law, these are the only interests mentioned as possible protectable interests. Yet, a covenant cant simply name all of these interests and expect to be upheld; the restrictions agreed to in a covenant not to compete can only be as broad as needed to protect these legitimate social interests or it will be considered too broad to be valid. D. Statutes Perhaps because it has been thought too difficult to balance social interests with reasonableness of the restrictions in deciding if a covenant should be upheld, some states have enacted statutes to invalidate non-compete agreements generally. But many of those statutes

continue to rely on the common law test of reasonableness and the Restatement of Law as the basis of their statutory schemes. The Restatement of the Law of Contracts states: (1) A promise to refrain from competition that imposes a restraint that is ancillary to an otherwise valid transaction or relationship is unreasonably in restraint of trade if (a) the restraint is greater than is needed to protect the promisees legitimate interest, or (b) the promisees need is outweighed by the hardship to the promisor and the likely injury to the public. (2) Promises imposing restraints that are ancillary to a valid transaction or relationship include the following: (a) a promise by the seller of a business not to compete with the buyer in such a way as to injure the value of the business sold; (b) a promise by an employee or other agent not to compete with his employer or other principal; (c) a promise by a partner not to compete with the partnership.24 Texas most closely incorporates the Restatement and common law in its Texas Business and Commercial Code provision regarding non-compete agreements. It provides that a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographic area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.25 Legislative history shows this statute brings Texas back to the test of reasonableness balancing the fairness of the dominant social or economic restraints and the benefits of enforcing the covenant not to compete.26

Michigan and Wisconsin have also enacted statutes that simply clarify common law principles. Michigans statute allows an employer to enter into an agreement that prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to duration, geographical area, and type of employment or line of business.27 This statute is meant to protect an employers reasonable competitive legitimate business interests.28 Wisconsin also focuses mainly on common law reasonableness of the covenant, stating that a covenant within a specified territory and during a specified time is lawful and enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer or principal.29 California was the first state to stop following the reasonableness test and to pass a code provision prohibiting a contract that restrains trade within the state.30 [E]very contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.31 California generally believes in freedom of employment based on public policy. But, like subsequent statutes passed in other states, this statute does not invalidate every noncompete agreement, just those that stop the restricted party from plying its trade or business.32 Businesses can still protect their interests without restricting a persons right to be employed. For example, a party can be barred from courting a specifically named customer.33 Since Californias statute, other states have followed with their own statutes affecting the validity of non-compete agreements, yet all have exceptions to their rules. Most states enacted statutes that prohibit any restraint of trade but many of those statutes are restricted to antitrust actions. Only eighteen states took those statutes a step further to statutorily restrict no-compete agreements, each relying on common law again to specify what is a protectable interest.34 Some states prohibit non-compete agreements unless the covenant is

agreed to within the context of the sale of the good will of a business or dissolution of a partnership.35 Colorado, Florida, Hawaii and Nevada specifically mention that businesses can enter into a non-compete agreement to protect trade secrets, confidential or unique information.36 Additionally, some of these states and other states hold non-compete agreements enforceable if they protect the solicitation of customers after leaving a business.37 Furthermore, some states specifically allow for agreements that protect the employers direct investment in skills the employee acquired in the course of his employment.38 Only three states have statutes that specifically address becoming employed with the competition.39 While Louisiana prohibits restraint of business stating, [e]very contract or

agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession, trade or business of any kindshall be null and void, the statute goes on to state exceptions, allowing an employee to agree with his employer to refrain from carrying on or engaging in a business similar to that of the employer40 Nevada states an employee cant be hampered from finding employment elsewhere, but an employee can be prohibited from [p]ursuing a similar vocation in competition with or becoming employed by a competitor of a recent former employer.41 South Dakota allows a similar restriction, though limits the duration of such a non-compete to 2 years from date of termination.42 These statutes are incoherent and self contradicting. Therefore, they dont help employees move freely from one job to another. States that dont have statutes specifically addressing the validity of non-compete agreements prohibiting an employee from working for a competitor do not necessarily approve of such a leap. Case law shows the use of common law protectable interests to enforce a complete restraint against an employee trying to compete directly with a business.43

Furthermore, some states found the need to add one more protectable interest, the protection of the public.44 That interest soon translated into new non-compete statutes, which are profession specific.45 Physicians in Delaware, Massachusetts and Texas are generally protected from the restraints of a non-compete agreement.46 agreements outright.47 Delaware and Massachusetts ban these types of

Texas allows a covenant not to compete for physicians if certain

provisions are met such as not deny[ing] a physician access to a list of his patients who he had seen or treated within one year of termination of the contract or employment, and allowing the physician to have access to his patients medical records with authorization from the patient. 48 Furthermore, Texas requires an option to buy out the covenant for a reasonable price.49 Illinois also has a physician provision that protects physicians in the sale of a practice.50 States are no longer just invalidating non-competes through public policy provisions like those protecting physicians. Vermont has a statute that prohibits a cosmetology school from requiring a person to enter into a covenant not to compete with the training organization as a condition of the training or licensure.51 This must be case specific in Vermont after the Other legislatures are finding the

legislature realized the need for such a distinct provision.

same need for provisions to protect employees in television and radio broadcasting. E. Broadcast Statutes: The New Frontier of Invalidating Non-Compete Agreements Maine and Massachusetts do not have statutes that generally invalidate non-compete agreements in all businesses. But, in recent years, both states have passed statutes that do limit the covenants use in specific fields such as broadcasting.52 It was only four years ago when Massachusetts forged the way for the protection of broadcast employees. Chapter 149 1 of the General Laws was amended to add 186, which states:

Any contract or agreement which creates or establishes the terms of employment for an employee or individual in the broadcasting industry, including television stations, television networks, radio stations, radio networks, or any entities affiliated with the foregoing, and which restricts the right of such employee or individual to obtain employment in a specified geographic area for a specified period of time after termination of employment of the employee by the employer or by termination of the employment relationship by mutual agreement of the employer and the employee or by termination of the employment relationship by expiration of the contract or agreement, shall be void and unenforceable with respect to such provision.53 This statute is the most comprehensive statute of those since enacted to protect employees in the broadcast industry from non-compete agreements no matter how they are terminated. Maine followed Massachusetts in 1999, enacting its own statute, though it distinguishes how an employee is terminated. A broadcasting industry contract provision that requires an employee or prospective employee to refrain from obtaining employment in a specified geographic area for a specified period of time following expiration of the contract or upon termination of employment without fault of the employee is presumed to be unreasonable.54 A broadcast employee is protected unless he or she is terminated with fault or resigns at the end of his or her contract. The exact text indicates employers can still require employees to sign noncompete agreements to protect the station from an employee who spews epithets or curse words on air in an effort to be terminated so the employee can seek employment at a station across town.55 Since Massachusetts and Maine passed statutes specifically relating to broadcast noncompete agreements, other states have tried to do the same. In the past two years, West Virginia, New Jersey, Illinois, North Carolina, Missouri, Arizona, Washington, and Iowa legislatures have

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proposed bills to protect broadcast employees.56 Each states bill varies in its tolerance for such agreements. West Virginia, like many states, already had a state antitrust statute that referred to cases involving the enforceability of non-compete agreements.57 However, the legislature proposed to narrow that law with House Bill 4419, which was proposed in March 2000.58 If this bill became law, it still would have allowed an employer to require employees to sign noncompetition clauses as part of an employment contract.59 However, the bill would prohibit a non-compete clause from being enforced if the employee is terminated or is not offered a new contract at the expiration of the previous contract, or if the agreement is not bargained for separately from the contract.60 This bill did not pass, but if it did, the statute would have left many unanswered questions to be litigated later. Certainly questions of a non-compete agreements validity would arise when an employer offers an employee a new contract before the expiration of the old contract but the new offer is not satisfactory to the employee compared to the money or position being offered from another station in the same town. Bills proposed in Missouri, Iowa and Washington tried to eliminate the problem that could arise under the West Virginia statute, but all failed before they were seriously considered. The most recent version of Missouris non-compete bill would have prohibited a broadcast employer from requiring an employee to refrain from obtaining employment in a specified geographic area for a specific period of time after termination of employment with such broadcast employer.61 However, Senate Bill No. 753 failed to make it out of the Labor and Industrial Relations Committee.62 Iowas Senate Study Bill 3116 was a committee sponsored bill which failed to even make it out of the Commerce Committee for discussion.63 Senate Bill

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6373 in Washington passed on the Senate Floor, but a notice to reconsider the vote eventually killed it. 64 While some state bills are still alive, there isnt much hope that they will survive and help broadcast employees. New Jerseys bill restricting the use of no-compete agreements against broadcast employees hasnt been acted on since March 2000 while North Carolinas Senate Bill 640 has been stuck in the Commerce Committee since April 2001.65 Arizonas Senate Bill 1042 passed out of the Senate, but amendments mean it wont come back the way it left.66 The House changed the intent of the bill from making it unlawful for a broadcast employer to require a current or prospective employee to agree to a non-compete clause to allowing a broadcast employer to include a six-month non-compete clause in an employment contract for on-air employees only. 67 Out of all the recent bills proposed, only the Illinois legislature has succeeded in actually turning a non-compete bill into law. Illinois did not have any general statutes that restrict the use of non-compete agreements until the legislature created the Broadcast Industry Free Market Act.68 The bill provided that employees within the broadcast industry can not be required, as a condition of an employment contract to refrain from obtaining employment in a specific geographic area for a specific period of time after termination of employment with the hiring broadcasting industry employer. 69 The bill passed both houses on April 25, 2001, only to be vetoed by the Governor two months later.70 The Governor believed this bill would force broadcast companies to rewrite contracts that have already been negotiated and executed, and would therefore be illegal under the Contract Clause of the Constitution as well as the Illinois Constitution.71 However, legislators dismissed that contention when it overrode the Governors veto on November 28, 2001. The law went into effect January 1, 2002.72

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These bills and laws specific to the broadcast industry show a trend to protect employees in this field from non-compete agreements as much, if not more, than physicians. While

physicians are protected for public policy reasons, legislatures are finding the need to protect broadcast employees because their jobs are unique compared to any other profession that commonly utilizes non-compete agreements. The number of bills being proposed in just the past few years in an effort to protect broadcast industry employees and the confusion in court decisions of broadcast cases indicate the need to establish when these covenants not to compete should be invalidated and whether they should be upheld in some circumstances. II. THE BROADCAST INDUSTRY A. An Overview The broadcast industry is broken down into markets based on television and radio signals.73 Each local market can have numerous cities, or even states. For example, the

Hartford, Connecticut market covers the entire state of Connecticut, while the New York City Market covers all of the citys boroughs, Long Island, and half of New Jersey.74 Markets are then numbered based on population, from biggest, number one, New York City, to smallest, number two-hundred-eleven, Glendive, California.75 Network news is separate because it

reaches a national and sometimes international audience. Therefore, there is no market size for network news or such broadcast outfits as CNN, MSNBC, or ESPN. Since the late 1980s, broadcasting in the top fifty markets followed an unwritten rule of hiring broadcasters with experience from smaller markets. Most broadcasters live transient lives, working their way up from small markets to bigger markets. But some try to return to the city where they grew up, hoping to settle down for good. In any given market, there could be as few as two television stations or as many as six that have news gathering operations.76 While it

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would be nice to believe working in a news operation is all fun with no disputes, sometimes conflicts arise that drive an on-air personality to want to work at another station in the market. In other cases, a station across town may offer considerably more money or a more prestigious position, but most on-air broadcasters are barred from working for that station because they are required to sign a non-compete agreement. The latest statistics show more than half of all people who work in television news are under contract, and most of them have signed non-compete agreements.77 On-air talent is more often required to sign such agreements than off air employees. For example, sixty percent of news reporters working in the business are under contract, and fifty-two percent of all reporters in the industry have also signed a non-compete agreement.78 Seventy-eight-percent of news anchors are under contract, with sixty-seven percent being required to sign a covenant not to compete.79 Most weathercasters, sports anchors, and sports reporters are also employed under these agreements.80 Even more interesting is the fact that off-air employees who are under contract are now being required to sign non-compete agreements. Most news producers have no management responsibilities; they mainly decide what stories go in their show, and in what order. Yet they are often required to sign non-compete agreements.81 While most other off-air employees are not under contract, the trend is to have them sign a term of employment contract, which also includes a non-compete agreement. Therefore, almost all off-air employees who are under contract are also required to sign a non-compete agreement.82 Non-compete agreements in the broadcast industry have thus exploded to restrict everyone from the anchor to the tape editor. B. Uniqueness of Non-Compete Agreements in Broadcast Industry 1. Salaries

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Perhaps the biggest myth about television news personalities is that they make a lot of money compared to the average American worker. In some cases, that statement could be very much true. An anchor who sits at a desk and reads the news in a top twenty-five market averages one-hundred-seventy-three thousand dollars a year.83 Furthermore, anchors, who broadcast to a national or international audience at the network level, have generally been in the broadcast business for more than twenty-five years, so a good contract negotiator can help them exceed more than two-million dollars a year.84 But the average broadcaster in the business will never make it to that level because of fierce competition and the low turnover in those positions.85 Even if they do, they will have to start learning their trade in a small market where they are most often required to sign a non-compete agreement. In a small market, television news anchors will start off making a low, but respectable, salary of twenty-five-thousand dollars ($25,000) a year.86 The salaries take a dramatic downturn with one step off the anchor desk. Television news reporters in a small market sized between one-hundred-fifty to two-hundred-eleven are responsible for gathering the news in the field, which includes most often shooting their own video, writing their own stories, and editing the video and audio together without the assistance of a photographer. These reporters make an average of eighteen-thousand-dollars ($18,000) a year.
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A broadcast reporter doing that same

job in a medium-sized market, fifty-one to one-hundred, averages only ten-thousand-dollars more a year.88 At this stage, some reporters are still shooting their own video and editing their own stories, but most are accompanied by a photographer. In the top twenty-five markets, including some of the most expensive cities to live in in the country, such as New York City, Los Angeles, Philadelphia and San Francisco, the average salary for a reporter is seventy-eight-thousand dollars ($78,000) a year.89 Since that is an

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average, some reporters are making much less than that to balance out the pay of specialty broadcasters, who make more than one-hundred-thousand-dollars a year for reporting health, investigative, or consumer stories.90 In addition, most people in the broadcasting industry never make it to the top twenty-five markets, and remain settled in much smaller cities for much lower wages. The only way for employees in most industries, including broadcasting, to truly understand their value is to shop their resume around town. However, in most industries besides broadcasting, people can move from one job to another in the same city and receive an increase in pay as they gain experience. A salesman who sells widgets for company X may not be able to work for company Y selling widgets if he signed a non-compete agreement, but he can certainly accept any other sales opportunity in the same city for a higher wage. That salesman can capitalize on his years of experience. A broadcaster can also gain experience or become polished the longer they are on the air, but most broadcasters cannot capitalize on that experience. Broadcasters are most valuable in the city where they are currently working. [T]he fact that I may have great visibility in Boston as a popular sports announcer may have no value to me in St. Louis or Chicago or Los Angeles, because nobody knows who I am there.91 So, as they gain experience and name recognition, they should be more valued by their current employer. But, broadcasters who sign non-compete agreements are generally unable to increase their salaries more than a minimal cost of living raise during contract negotiations, because employers know other stations in the market cant pay broadcasters more without risking the loss of the broadcasters popularity while waiting out the duration of a non-compete agreement. 92 2. Unequal Bargaining Power a. The Offer

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Securing a job in television news almost feels like winning the lottery, without the financial windfall. News directors will readily admit that they receive more than one hundred tapes for each on-air opening.93 So when a news director calls from a bigger market or from a comparable market with a better position or money offer, most on air broadcasters jump to take the job. Broadcasters know if they dont accept the contract terms, which usually includes a noncompete agreement, there are ninety-nine other people ready to take that position, most likely for less money. Talent understands that if they do not sign, they will not be hired. 94 This fear of waiting for the next job offer which could be months away fuels the broadcasters acceptance of non-compete agreements. Therefore, the result is the common use of adhesion contracts by broadcast employers and the acceptance of their terms by employees. Various state Broadcasters Associations claim [n]on-compete agreements incorporate additional compensation for the employee in exchange for a reasonable agreement not to compete for a certain period of time.
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The Maine Association of Broadcasters, which

represents stations, further states that forbidding stations to use such contractual devices means employees worth would be devalued.
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However, depressed salaries already exist in the

broadcast industry, attributed by some to non-compete agreements.97 Furthermore, agents who represent broadcasters all over the country believe employees in Maine and Massachusetts now have more equal bargaining power to increase their salaries since they are free agents once their contracts expire 98 Paul Lewis has twenty-five years of broadcast experience as a reporter, producer and, now, news director in Hartford, Connecticut.99 He agrees that in most newsrooms, employers make employment conditional on the employee signing a non-compete agreement.100 No one is putting a gun to anyones head to work here. 101 He says he is forthcoming about the six-month

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non-compete agreement that is standard for every employee under contract and is supported by consideration not just in salary, but in the form of the entire package offered to talent, which includes benefits, and additional perks.102 While Lewis says he is upfront about the terms of a covenant not to compete during contract negotiations, some employees at other stations claim they dont find out about the covenant until they have accepted the job offer and already moved. James Anderson accepted a job at Metro Networks, Inc after quitting his job with the Copley Newspapers.103 He says, upon arrival for my first day of work at Metro, I was handed a Terms and Conditions of Employment document which I was advised I had to sign in order to work there.104 While Anderson may have been nave not to ask about a covenant not to compete, he is the prime example of inexperienced broadcasters being forced to sign such a covenant without further consideration, after already accepting employment based on the terms of the employment contract.

b. The Renewal Once employees have signed a non-compete agreement, they are at the mercy of their employer during contract negotiations. While most broadcasters are transient, others with

families want to put down roots to avoid the anxiety of relocating their families every few years. But, if they sign non compete agreements, which prohibits them from working at any other station in town for a period of time, they are forced to move to a new city, or new state across the continent, when their contract expires. Broadcast stations know who is home for good, commonly known as a lifer, and who is using that station as a stepping-stone for future opportunities. That knowledge allows broadcast employers to have an edge in negotiations with the lifers because employers know these

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employees will have to move away from the market they now consider home if they dont accept the stations offer of renewal.105 This is the biggest concern of those who risked their jobs to

speak before legislatures trying to pass bills prohibiting non-compete agreements.106 A producer at a television station in Maine, who was required to sign a non-compete agreement when she accepted her job, and who does not appear on air, appealed to the legislature to pass a state statute invalidating non-compete agreements in the broadcast industry so she wouldnt have to move to pursue her career.107 I urge you to pass a law that would give me the rights that any mill worker, waitress, police officer, clerk or nurse has: that of being able to accept a better job with better pay or circumstances, without having to leave the home I love.108 In Maine, television news anchor Carrie Blake testified that she has no bargaining power since she wants to stay in Maine because her non-compete prevents her from working across town, effectively acting as a salary cap in disguisea way to prevent a bidding war with another station.109 Stations are fully aware that, if the employee does not accept the stations offer, however inadequate, the employee is faced with sitting out the non-compete time period, moving, or a long and expensive court battle that they cannot afford.110 Therefore, stations have the upper hand and little incentive to offer broadcast employees a reasonable wage. In effect, the station has become, by virtue of the noncompete covenant, a monopsonist. 3. Nature of the Business: Too Costly to Fight Unlike other fields, where a salesman selling widgets can leave and sell another product while he fights a non-compete agreement, broadcasters have nowhere else to use their career skills in the same city. Therefore, most employees will move to another city to gain a paycheck and not attempt to fight them.111 More highly coveted employees, mainly news anchors, will merely sit out the duration of their non-compete off air or out of the business, but these

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employees have usually secured new positions with a station across town and are most often being paid during this time by their new employer.112 However, very few broadcasters, other than anchors, are that fortunate. Most reporters, producers, and photographers cannot secure a job across town if they cannot work in their hired capacity immediately. Stations are extremely short staffed, especially with the recent layoffs and budget cuts due to the drop in advertising revenues.113 Therefore, they cannot afford to leave a reporting position technically unfilled while waiting for a reporter to be available. Furthermore, most stations will not openly risk litigation by hiring an employee who has a non-compete agreement.114 Some on-air personalities are fortunate to have enough money saved to sit out for the covenants restriction duration without the promise of a job at a competing station, but then that broadcaster risks his or her entire career.

4. Off-Air Anyone who is out of the workforce for a long period of time may have trouble reentering in a particular position. But this is a much more serious problem in the broadcast industry. Courts are slow to realize the competitive nature of television news and the enormous impact of being off air for any duration of time.115 Some covenants not to compete

specifically restrict only on-air performance, or performance of similar services, but allow employees to continue to work off-air in the industry during the duration of the agreement.116 AFTRA knows its broadcast union members could be out of the business forever if they are off air for even a short period of time. Six months off the air in any market is the kiss of death for a career in radio and television.117 The threat of losing a career one has put so much time and

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effort into is even higher for those who are over forty and forced to sit out non-compete agreements because employers are continually trying to attract younger audiences.118 Courts do not always recognize this unique aspect of the business. John Beckman, a meteorologist and very popular television personality, filed a declaratory judgment action to determine whether his restrictive covenant, which would prevent him from being on air for one-hundred-eighty days within a radius of thirty five (35) miles from Cox Broadcasting Companys offices, was valid.119 The court found that, since he was already hired at a competing station and working behind the scenes, Beckman will not suffer substantial damage of loss of recognition and popularity solely as a result of being off the air during the first 180 days of his five year contract with his new employer.120 In this case, Beckman did not have to worry about convincing employers his popularity would still be high in 180 days; he was already under contract with a new employer.121 However, most on-air broadcasters do not secure, under contract, new employment before challenging a non-compete and therefore risk their careers in the broadcasting industry by taking time off air. In Murray v. Lowndes County Broadcasting Co., a disc jockey signed a non-compete agreement that prohibited him from engag[ing] in the business of announcer, disc jockey, advertisement selling, station manager or director for any other radio station in Lowndes County, Georgia.122 The covenant was upheld when Murray left the Lowndes County Broadcasting Company to work for a competing station.123 The court found that, since Murray was licensed as a radio engineer and was qualified to work in other positions besides a disc jockey, he was not precluded from working in his trade or business for a competitor in any capacity. 124 Murray was enjoined from being on air, but kept his name in the public by being very active in the local community through civic organizations.125 After two years, he returned to the airwaves at the

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competing station.126 That station eventually went under and Murray ultimately had to move to Macon, Georgia to work as a disc jockey.127 Gary Oloffson, also a disc jockey, tried to fight a restrictive covenant that barred him from performing at a competing station any services which are the same or of similar kind or are of similar or greater responsibility as those he performed for his current station.128 He wanted to leave an oldies format station and become the main disc jockey for a soft jazz station.129 Even though the formats would attract different listeners, the court in Illinois didnt see the restriction as too broad because Oloffson could work at his new employer in an off-air capacity.130 Therefore, the court issued a preliminary injunction to keep him off-air until the merits of the case could be heard.131 Oloffson believes that year off-air ruined his career.132 A year is a long time. When I finally got on the air, some people said they remembered me but they didnt come flocking to listen to me because I was on the air again.133 Oloffson acknowledges that its hard to determine whether the format or the personality attracts viewers, but it never hurts to have a name you know. They didnt know me anymore.134 Oloffson worked for one year on air at the new station after the non-compete restriction expired, then the station went under.135 He regained employment, but not his past popularity. Today, he is unemployed in the Peoria market. 136 In these cases, the court assumed that the disc jockeys could gain employment in another capacity in the broadcasting industry. A radio disc jockey or television news reporter is paid far more than a producer in either field.137 Salaries between the two are far from commensurate; therefore, the employee who moves off-air must take a huge pay cut. Furthermore, most stations will not hire an on-air personality from one station to produce or work in another capacity at its

22

station, because the broadcaster is most likely not qualified and the employer knows the reporter or disc jockey will be unhappy in that other capacity when the restrictive covenant expires. III. THE BROADCAST INDUSTRYS STRUGGLE IN THE COURTS OVER NON-COMPETE AGREEMENTS The broadcast industry has struggled in the courts to keep non-compete agreements from being invalidated. As stated previously, courts will generally uphold covenants, that are

reasonable in time and space restrictions as long as they serve to protect a legitimate business interest. While it is not too hard for employers to come up with a reasonable duration and geographic scope, they have struggled in trying to find a legitimate business interest that supersedes the employees right to earn a living. A. Common Law Reasonableness: Time and Geographical Limitations Most states do not have statutes invalidating non-compete agreements, though many of those that do, allow non-compete agreements to stand if they are reasonable. 138 That has created a battle between station owners and employees over what is considered reasonable in terms of time restrictions and geographic scope. Covenants not to compete restricting

television and radio personalities from the 1960s through the 1980s ranged from six months to three years in duration and covered hundreds of miles in geographic scope. 139 There is no bright line rule that helps courts to determine what are reasonable restrictions in duration and geographic scope; courts must rely on the specific facts of each case because no two cases are ever the same. However, court decisions have been able to set parameters for determining when a covenant not to compete is too long, too wide in geographic scope, or too broad overall. The court in Richmond Bros., Inc v. Westinghouse Broadcasting Co. held a three year covenant not to compete, which prevented the employee from engaging in the radio, television, or advertising business anywhere in New England, was too long since the employee had

23

already been off the air for more than two years in that market, working in another city. 140 The court stated that the covenant is no longer reasonably necessary for the protection of the plaintiffs business and enforcing it would merely be protecting the plaintiff against ordinary competition.141 In this case, the employee left Boston after working for one station and he wanted to return to a competing station before the covenant expired; however, in most court cases, employees want to stay in the same market when they move stations. In those cases, some covenants not to compete ranging from six months to two years have been upheld.142 The time restraint is just one factor used to determine the validity of a non-compete; some early broadcast covenants not to compete were considered unreasonable because of their vast geographic scope. The restrictions imposed upon the promisor must not be larger than are necessary for the protection of the promissee.143 In Wake v. Crawford, John Crawford was a radio broadcaster in Atlanta, working for Wake Broadcasting, a subsidiary of the Bartell Group.144 The employer tried to enjoin him from working at a radio or television station within a radius of fifty (50) miles of the City of Atlanta, Fulton County, Georgia or within a fifty (50) mile radius of any city in which the Bartell Group now or shall during the term of this agreement own or operate a radio broadcasting or television broadcasting station145 The Bartell Group owned radio and television stations not only in Georgia, but also in Wisconsin, Alabama, California and New York.
146

The court found the geographic restrictions imposed made the

contract unreasonable, not necessary for the protection of the party in whose favor the restraint was imposed, oppressive to the party restrained, and opposed to the interest of the public. 147 A court also decided Metro Traffic radio employees did not have to abide by their noncompete agreements.148 They signed covenants not to compete that restricted them from broadcasting traffic reports on television or radio for one year following the termination of

24

employment in Los Angeles, Orange San Bernardino and Riverside Counties.149 But the court in California had a statute to follow, which prohibited contracts that restrained employees from engaging in a lawful profession, trade, or business of any kind. 150 Therefore, the court found [t]he restriction standing by itself is unenforceable because it severely restricts Metro employees mobility and betterment.151 However, the real deciding factor for the court was the fact that employees learned of no trade secrets while employed with Metro Traffic and therefore the employer did not have a legitimate business interest to protect.152 B. Broadcast Business Interests Once the time and geographic restraints are considered reasonable, the real battle begins in balancing broadcasters interests with the employers business interests. Broadcast employers were thwarted from trying to prove these covenants were valid by relying on the traditional business interests identified in non-broadcast industry cases such as the protection of trade secrets or confidential customer information.153 With no trade secrets or confidential

information to protect, broadcast stations had to devise a new list of legitimate business interests if they wanted covenants not to compete to be valid. 1. Uniqueness of Services Employers have sought to rely on the uniqueness of broadcasters services as a legitimate business interest to keep courts from invalidating covenants not to compete. Stations dont define exactly what is unique about the services being provided by the broadcaster in contracts, only stating that the services are of a special, unique, extraordinary, intellectual character which gives them a peculiar value, the loss to the Company of which Company cannot be adequately or reasonably compensated in damages.154 Employers still dont define such unique services if a broadcaster takes on an employer in court over a non-compete

25

agreement.155 Yet employers believe that the special or uniqueness of services provided by an on-air personality should be enough to uphold these agreements.156 While one court in Ohio agreed with broadcast employers, that uniqueness of services alone was a legitimate business interest that could uphold a covenant not to compete, more recent cases recognize that uniqueness of services is not enough to keep a covenant from being invalidated.157 Most courts around the country look to American Broadcasting Co., Inc. v. Wolf in determining that uniqueness of services cannot stand alone as a legitimate business interest.158 American Broadcasting Companies, Incorporated (ABC) sought equitable relief to force Warner Wolf, the famous sportscaster, off the air at a competing station, asserting that Wolf breached the good faith negotiation provision of his expired contract.159 Wolf had a right of first refusal provision in his contract, which stated he would negotiate with ABC in good faith without talking to any competing station for forty-five (45) days.160 Furthermore, Wolf signed a noncompete agreement, which was substantially similar to the right of first refusal.161 That provision made Wolf agree that he will not accept, in any market for a period of three (3) months following the expiration of the extended term of this agreement, any offer of employment as a sportscaster, sports news reporter, commentator, program host, or analyst in broadcasting (including television, cable television, pay television and radio) without first giving us [ABC], in writing, an opportunity to employ you on substantially similar terms and you agree to enter into an agreement with us on such terms.162 The New York Court of Appeals determined Wolf breached his obligations to negotiate in good faith with ABC though it would not force Wolf to continue to perform his under his expired contract with ABC because the court feared such judicial compulsion of services would violate the express command of the Thirteenth Amendment, which prohibits involuntary

26

servitude.163 Therefore the court was left with only being able to rule on the non-compete agreement.164 The court noted that once the term of an employment agreement has expired, the general public favoring robust and uninhibited competition should not give way merely because a particular employer wishes to insulate himself from competition.165 The court recognized that a non-compete agreement is not usually enforceable unless necessary to protect the employers interests, which most often include trade secrets, customer lists or good will of the employers business, or perhaps when the employer is exposed to special harm because of the unique nature of the employees services.166 Wolf was not privy to trade secrets or customer lists and he was not solely responsible for good will relationships with customers.167 So, all that was left was the uniqueness of his services, but New York courts have never enforced a non-compete agreement, following the termination of an employment contract, solely on the basis of the uniqueness of services, and it wasnt about to start now.168 The court found no legitimate business interest and would not issue an injunction to keep Wolf from working for CBS because it would unduly interfere with his livelihood and inhibit free competition where there is no corresponding injury to the employer other than the loss of a competitive edge.169 The Wolf courts decision was followed more than fifteen years later, in 1998, when Sue Nigra filed suit against her former employer, Young Broadcasting of Albany, to invalidate a noncompete agreement.170 Nigra had been an anchor for two years at WTEN, owned by Young Broadcasting.171 Upon expiration of her contract, she was offered a renewal, but she was also offered a job at a competing station for twice her salary.172 She was restricted from accepting such a position because of a covenant not to compete, which stated: Regardless of whether WTEN terminates an employee or an employee does not renew its contract with WTEN at the salary that

27

WTEN offers, for a year thereafter the employee may not even work for, much less appear on any commercial television stationthat broadcasts or transmits to any place within the Albany-Schenectady-Troy area, unless its broadcast presence here is incidental to a national presentation.173 WTEN relied on Nigras uniqueness of services to justify enforcement of the anti-competition clause.174 The court acknowledged Wolf in stating unique services have never actually served as the sole basis for judicial enforcement of an anti-competition clause.175 Without more, the court determined that WTEN had not demonstrated any inherent unfairness in permitting her to compete with it by appearing on another station after being unable to negotiate a satisfactory new contract with it.176 The cases of Nigra and Wolf put employers on notice to demonstrate real legitimate business interests and real injury or expect these non-compete agreements to be invalidated.

2. Promotion, Training and Good Will By the time Nigra and Wolf were decided, employers had already identified other business interests to add to the uniqueness of services.177 Those interests include time and money spent on promotion and training.178 Stations also focus on name recognition, which establishes the good will of the station and is translated into dollar signs.179 Some courts have upheld covenants not to compete based on these business interests.180 However, those courts failed to delve into the nature of the broadcast industry to determine if these business interests are truly legitimate or will leave an open door for every employer in every industry to claim such interests to defeat non-compete agreements.

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Every broadcast personalitys job is to attract viewers to watch or an audience to listen. If they fail, then their jobs could be in jeopardy. But, stations dont recognize broadcasters job descriptions or hard work when trying to keep them from working for a direct competitor; stations only see the money they perceive as invested in that anchor or radio host. Stations make money based on ratings.181 The higher the ratings, the more money stations can charge for commercial advertising.182 Radio stations also rely on ratings. [L]isteners mean ratings, and ratings mean dollars.183 Therefore, most stations realize it is in their best interest and to their benefit to heavily promote anchors or disc jockeys to attract more viewers or listeners, which in turn will lead to higher ratings and revenue returns.184 However, many stations will then claim that promotion as a legitimate business interest worthy of protection in an effort to enjoin an anchor or disc jockey from leaving and working for a competitor for more money or a more prestigious position.185 Broadcasters cannot influence a station as to how much or how little money is spent on promotions or which shows or people are promoted. Yet, stations tend to believe that they made personalities popular strictly through promotion.186 Some courts have recognized, however, that a broadcasters personality and interaction in the community outside of work can also have a profound impact on viewer and listener trends.187 The court in Richmond Bros. Inc. v.

Westinghouse Broadcasting Co. determined that the money spent on promotion of Gerald Jacoby did not necessarily lead to Jacobys popularity as a disc jockey; therefore, offers from competitors for employment did not come as a direct result of the stations promotion.188 [I]t would indeed be difficult to determine that such expenditures and promotion have resulted in the performers personality. The performers popularity may well be attributed to his own

personality and ability.189 The court reasoned a competitor would not necessarily benefit

29

directly from the substantial investment of the former station, since any promotion only enhanced the personalitys image that already existed or was personally developed.190 Therefore, the court found that the stations legitimate business interest of money spent on promotion was for the stations own benefit and was not money spent on the employee per se; therefore, the employee should not be penalized because he was promoted by a former employer.191 However, most courts are accepting stations contentions that promotion is the sole reason for a broadcasters popularity and not the result of a personalitys hard work.192 The Supreme Court of Georgia even agreed with the trial courts finding in Beckman v. Cox Broadcasting Corp., that money spent on promotions is for the stations benefit.193 Yet the court still found the television station has a significant interest in the image of its television station which it has created, in large measure, by promoting those individuals who appear on behalf of the station, whether as newscasters, sports announcers, meteorologists, or television personalities.194 That determination meant the station had a legitimate business interest that needed to be protected by preventing weathercaster John Beckman from working for a competitor for the duration of his non-compete agreement.195 Other courts dont look at who is benefiting from the promotion but the end result of the promotion, which is popular personalities representing the good will of the station. In T.K. Communications, Inc. v. Herman, Stuart Herman and James McBean challenged a non-compete clause in their contracts that prohibited them from working as disc jockeys for a competing station for four months.196 They were the Morning Team and were extremely popular bringing in substantial advertising revenue.197 A Florida statute requires that a legitimate business interest be demonstrated to enforce a non-compete agreement.198 But without determining

whether the non-compete agreement would ultimately be found valid, the court reversed the

30

order that denied T.K. Communications request for a temporary injunction to stop the disc jockeys from working for a competitor.199 The court noted the use of the disc jockeys valuable names and reputations and the capitalization on the disc jockeys popularity was intangible and should not be benefited from until the validity of the non-compete can be determined.200 The court thought the good will of the station would be hurt if the disc jockey immediately appeared on another station.201 What this court and others do not realize is that the good will of a station is embodied in, and therefore inseparable from the broadcaster.202 In other industries, such as sales, the good will of a business means the employees use of customer contact lists or trade secrets. The company has expended the capitol to allow the salesperson to develop the clientele for the product and so has earned the good will generated by that salesman.203 A good salesman can work for another company, still performing his trade, without ruining the good will of his former employer because he will develop new customers and not expose confidential information. That is impossible in the broadcasting industry. With a broadcaster, the employee is inseparable from the productin fact his face IS the productso there is no way that he can work [at all in his trade in the same city] without violating the agreement.204 Courts do not have enough experience with non-compete agreements to understand that stations only claim this legitimate business interest when stations benefit from the promotional investment. In the transcript of proceedings of Palmer Communications Inc. v. Robin Marsh, the General Manager of KFOR-TV, Channel 4, (owned by Palmer Communications) tried to prevent Robin Marsh from working for a competitors station in the Oklahoma City Market claiming irreparable harm if on-air personalities, such as Robin in this case, are allowed to go to work for a competing local station after an expiration of their contract with Channel 4.205 KFOR-TV

31

claimed if Marsh could switch stations and jump across the street to KWTV, Channel 9, then that competitor would be unfairly taking advantage of KFOR-TVs substantial investment in Marshs public image and recognition206 Testimony revealed the ratings jumped one-hundred-twenty-percent in three years since Robin Marsh started anchoring the morning show and the station attributed that spike to its promotion, training, and development of Marshs image, which in turn enhanced the stations image.207 While that may be true, KFOR-TVs General Manager admitted, there is no true way to tell if Marshs own personality and ability, or the stations promotion, or the fact that the show started a half-hour earlier than the competitors newscasts contributed to the increase in ratings.208 No matter what the reason, KFOR-TV was not going to let Robin Marsh appear on air across town at KWTV immediately after leaving KFOR-TV to protect its interest of keeping her from converting viewers from KFOR-TV to KWTV.209 However, the court found in Marshs favor, believing KFOR-TVs own actions show those interests may not be as legitimate as they appear.210 If promotion investment and training are truly legitimate business interests, then it would only logically follow that all stations would protect this interest in every instance that it is threatened. However, they do not. The General Manager of KFOR-TV admitted it did not enforce the same non-compete agreement against weekend news anchor, George Tomek, at KFOR-TV who moved to a competitor in the same town.211 The General Manager explained that it had offered a new contract to George Tomek, but one that would move him off-air.212 Therefore, the station allowed him to pursue employment with any competitor.213 George Tomek started on-air at a station across town immediately after leaving KFOR-TV.214 He

32

obviously did not pull in the viewers to emulate the same ratings success enjoyed by Robin Marsh. Furthermore, while stations may claim promotion is important and can cause irreparable harm, they have no problem irreparably harming other stations by hiring their talent. Meteorologist Mike Morgan was promoted heavily at KOCO, Channel 5, before being hired away by KFOR-TV.215 KFOR-TV also hired Anthony Foster to start on the air immediately KFOR-TV

after leaving Channel 5.216 He too had been regularly promoted at Channel 5.217

also tried to hire Meteorologist Gary England, who was heavily promoted on KWTV in the Oklahoma City Market.218 According to KFOR-TV, none of these people, though highly

promoted, had non-compete agreements.219 While England did not leave KWTV, one can easily speculate that KFOR-TV would not have offered to pay Morgan and Foster and England higher salaries and overall better deals to moves across town unless the station hoped to convert viewers to KFOR-TV and benefit from their switch. Furthermore, KOCO, Channel 5 must not have been able to match those salaries, perhaps not seeing their departures as irreparably harming its station enough to try to keep them. While the good will of a station may depend on anchors and disc jockeys who are very familiar to viewers, reporters have also been stopped from working for competitors because of promotion and training. A temporary injunction was issued to keep reporter Adrianna Iwasinski from working on air at KWTV, Channel 9, after leaving KOCO, Channel 5, in the Oklahoma City market because she had a no-compete agreement.220 KOCO, Channel 5, claimed it

invested considerable monetary amounts as well as promotional efforts over the last two years building a name and educating the viewers to Miss Iwasinskis likeness, [and] face and the station claimed KWTV is going to reap the benefits of our investment in Miss Iwasinskis

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career.221 The promotion mainly consisted of her appearing on air as a reporter, doing her job.222 There was barely any extraneous promotion of her individually without being attached to a story she was working on or promotion of her as part of a news team.223 KOCO never tried to get viewers to switch stations and watch KOCO-TV specifically because Iwasinski was on its air. Still, the station believed that viewers who were familiar with Iwasinski would change channels.224 But when pressed, KOCO-TV admitted that only four viewers out of seventy-five to eighty-thousand viewers called the station to inquire as to why Iwasinski was on KWTV.225 KOCO also claimed Iwasinski was trained in her position, which included coaching and mentoring as would occur in any business setting.226 But the General Manager admitted that Iwasinski spent minimal time with consultants who work with talent on their appearance, performance, and presence.227 Furthermore, Iwasinski had already worked in Amarillo and Waco as a reporter/fill-in anchor for a total of three years.228 She, like most on-air broadcasters in the industry, would not have been hired in a top fifty market without being able to appear onair within the first day or two of starting a new job. Iwasinski confirmed she never received any other formal training from KOCO before going on the air or during the subsequent two years.229 Though the court heard the testimony, it still granted the temporary injunction based solely on the reasonable probability of the plaintiffs final success on the merits.230 The court couldnt find the covenant violated public policy, though neither the plaintiff nor defendant made a public policy argument, and the court determined the plaintiff could suffer irreparable harm if [an injunction is] not granted based on Iwasinskis specific contract terms.231 But even the court acknowledged its disagreement with its own decision, Im not particularly happy about what Ive done, but I think thats what I am required to do.232 The court never spelled out if the investment and training arguments alone were strong enough legitimate business interests to

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uphold the non-compete agreement.

However, the Iwasinski case opens the door for any

business to claim that investment and training are legitimate business interests that should be protected. Every employer invests some time or money in a new employee. Therefore, accepting investment and training alone as legitimate business interests would make it too easy for any business in any industry to claim a covenant not to compete should be upheld because the company provided guidance and direction to an employee. Some courts have already recognized how hard it is to determine where an employees prior knowledge and skills stop and investment and training begin unless the training is on a specific piece of equipment or how to do a specific kind of reporting.233 Any employer will confirm that an employees services are always more valuable after working for a particular business for a period of time because they are now familiar with the companys procedures. Broadcasters are no different. Therefore, the argument that a stations investment in training and promotion in a broadcaster proves too much. C. Employees Undue Burden Many broadcast stations will argue their investment in promotion and training should be enough to enforce a covenant not to compete even when they no longer see a benefit from a broadcast employees services. Cosmos Broadcastings standard non-compete agreement for employees at WFIE-TV in Evansville, Indiana states, Employee agrees that upon termination of employment for any reason, Employee will not directly or indirectly for a period of twelve (12) months from the date of said termination, appear on, become financially interested in or accept employment from any television station in the Evansville, Indiana D-M-A.234 Sinclair Communications, which owns 54 stations, the third largest number of television station in the country owned by one company, follows with a restrictive covenant that restricts employees

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from gaining other employment as a broadcaster in a particular TV market for one hundred eighty days to one year no matter whether an employee quits or is fired.235 These covenants may protect an employer from an employee forcing his own firing and then switching stations; however, in most cases, the employee is fired, demoted, or not renewed not as a result of any intentional adverse actions on the part of the employee. Yet the employee still is restricted from pursuing other employment in the same market. Broadcast journalists have little control over their careers. They are constantly at the mercy of ratings and non-compete agreements that limit their career opportunities. Covenants not to compete especially burden employees with the inability to earn a living wage, support a family, and pursue a chosen trade when they are fired, demoted, or not renewed. William Bennett is a perfect example. He was an eleven-year veteran of the broadcast industry as a radio announcer when he was informed he was being removed from his day-time schedule to the all night schedule.236 He was demoted, yet remained with the station until he was informed that his contract would not be renewed for another year but as an alternative he could remain on at union wages, thereby in effect reducing his salary under the terms of said contract by onehalf.237 Bennett solicited employment with another station in the area, but he had a non-compete agreement that restricted him from working at a competing station for eighteen months after the cessation of his employment from Storz Broadcasting Co.238 Storz Broadcasting Co. sent a letter to Bennetts perspective employer stating that it would institute appropriate legal proceedings to stop Bennett from working there, consequently forcing the perspective employer to withdraw its offer of employment to Bennett.239 The court found that Storz Broadcasting had no right to send that letter because it had no legally protected interest after it demoted Bennett since it

36

would appear that defendant did not wish to continue plaintiff in the capacity for which he was hired.240 Furthermore Bennett would have only two options: to work for another eighteen

months at reduced pay or move himself and his family to a new city.241 Still, Bennett had to fight through a four year court battle and lose a potential job to prove his non-compete agreement was invalid in these circumstances.242 His battle is not unique.243 The same battle ensues when television broadcasters are terminated yet restricted from pursing their chosen profession with a competitor. In Orion Broadcasting, Inc. v. Forsythe, WAVE television, owned by Orion Broadcasting, noticed it began to lose a substantial number of its viewers to WHAS-TV, another Louisville television station.244 Subsequently, Ms.

Forsythe and her co-anchor, Mr. Cullen, were notified that their employment contracts would be terminated in sixty days.245 Forsythe had a non-compete agreement that prevented her from working in any broadcast television station or radio station in Louisville, Kentucky for twelve months immediately following any termination or expiration of her contract.246 However, when informed of her termination, she immediately sought employment from WHAS-TV as a television news reporter, a considerable demotion from an anchor position.247 The court

recognized that [t]he true test in this situation is the factual manner in which the employment is severed.248 After an almost year long battle, the court determined, had Ms. Forsythe voluntarily severed her relationship with plaintiff, the Court has no doubt that the non-competition covenant would have been enforceable against her. To hold that Ms. Forsyth, at the whim of plaintiff, could be deprived of her livelihood in a highly competitive market, seems to the Court to be an example of industrial peonage which has no place in todays society.249

37

To employees who have been fired, demoted, or not renewed, many times the battle is too costly, and therefore an undue burden, just to prove they have a right to immediately continue employment in their chosen profession.250 IV. CONCLUSION The court in American Broadcasting Co., Inc. v. Wolf, said it best when it acknowledged that [t]his case provides an interesting insight into the fierce competition in the television industry for popular performers and favorable ratings.251 The competition is not only fierce in the field, fighting for interviews and exclusive stories, but the battleground is just as cutthroat between management and employees within the newsroom. Covenants not to compete are forced on employees as part of the conditions of employment. They are used to unduly burden the employee by keeping salaries down. Employees know they have only two choicesto pay for a lengthy court battle or to choose between their families happiness in one city and their career, which can only be continued in another city. Court cases recognize that broadcast employers have an unfair advantage in negotiating contracts with employees who are desperate to make a decent living wage. One who has nothing but his labor to sell, and is in urgent need of selling that, cannot well afford to raise any objection to any of the terms in the contract of employment offered him, so long as the wages are acceptable.252 When those wages are not acceptable, too often, broadcast employees are forced to accept them or sit out a non-compete agreement before marketing their services to another station.253 Broadcast employees already forgo large salaries and employment stability to pursue a dreama career in educating the public about what is happening in the local community. If non-compete agreements are continually upheld, broadcast employees will forgo even more, the same rights and freedom of pursing their trade as every other American worker.

38

1.

See

Don

Fitzpatrick,

Short

Takes,

Shoptalk

available

at

http://www.tvspy.com/shoptalk_archive.cfm?t_shoptalk_id=1661&page=1 (Sept. 6, 2001). 2. See Richard Huff, Fox Scoops Up CNNs Man in Afghanistan, NY Daily News reprinted in Shoptalk available at http://www.tvspy.com/shoptalk_archive.cfm?t_shoptalk_id=2021&page=1 (Oct. 2, 2001). 3. See Michael Starr, Geraldo in FOX Hole, New York Post, reprinted in Shoptalk available at http://www.tvspy.com/shoptalk_archive.cfm?t_shoptalk_id=2501&page=1 (Nov. 5, 2001). 4. See Charles E. Carpenter, Validity of Contracts Not to Compete, 76 U. PA. L. REV. 244 (1928). 5. See id. 6. See id. Early cases cite the main reason for holding these covenants invalid as the deprivation of a means of livelihood to take care of ones family and be a useful member of society. See id. at 246 (citing Mitchel v.Reynold, 5 M & W 549 (1839)). While this reasoning was used to invalidate all general restraints, courts started upholding partial restraints as valid in the eighteenth and nineteenth centuries. See id. at 246. 7. Id. at 244. 8. See Carpenter, supra note 4, at 247. 9. See id. at 248 (citing A.C. 535 (1984)). 10. See Carpenter, supra note 4, at 249. 11. See id. at 248. 12. Jon H. Sylvester, Validity of Post-Employment Non-Compete Covenants in Broadcast News Employment Contracts, 11 HASTINGS COMM. & ENT. L.J., 423, 427 (1989).

39

13. See generally MALSBERGER, BRIAN M., COVENANT NOT TO COMPETE: A STATE-BY-STATE SURVEY, 2000 CUMULATIVE SUPPLEMENT, 560, 611 (2d ed. 2000). 14. See id. at 629 (citing Daniel v. Keene Agency v. Butterworth, 1995 WL 93387 (Conn. Super. Ct. 1995)). 15. See id. at 1216. 16. Id. at 1216 (citing Superior Consulting Inc. v. Walling, 851 F. Supp. 839, 851 (E.D. Mich. 1994)). 17. Carpenter, supra note 4, at 253. 18. See id. 19. See id. 20. Id. at 254 (citing United States v. Addyston Pipe and Steel Co., 85 F. 271, 288 (C.C.A. 6th 1898). 21. Malsberger, supra note 13, at 987. 22. See id. at 987. 23. See generally id.; MALSBERGER, BRIAN M., COVENANT NOT STATE SURVEY (2d ed. 1996). 24. Restatement (Second) of the Law of Contracts 187 (1981). 25. TEX. BUS. & COM. CODE ANN. 15.05 (Vernon 1999); Malsberger, supra note 13, at 1671. 26. See Malsberger, supra note 13, at 1673. 27. MALSBERGER, BRIAN M., COVENANT NOT TO COMPETE: A STATE-BY-STATE SURVEY, 592 (2d ed. 1996). 28. Id. 29. WIS. STAT. ANN. 103.465 (West 2001); Malsberger, supra note 27, at 1167.
TO

COMPETE: A STATE-BY-

40

30. Malsberger, supra note 27, at 137. See also Carpenter supra note 4, at 250-51; Sylvester, surpa note 12, at 443. 31. CAL. BUS. & PROF. CODE 16600 (West 2001). This statute was adopted from Civil Code sections 1673 through 1675. Malsberger, supra note 27, at 137. 32. Malsberger, supra note 4, at 578. 33. See id. at 579 (citing General Commercial Packaging, Inc. v. TPS Package Engg, Inc., 114 F.3d 888 (9th Cir. 1996)). 34. See Malsberger, supra note 4, at 579. 35. States with such statutes include Alabama, Colorado, Florida, Louisiana, Michigan,

Montana, Nevada, North Dakota, Oklahoma, and South Dakota. See generally Malsberger, supra note 4. Since 1984, Oklahoma has had a statute invalidating non-compete agreements except those between the seller and buyer of the good will of a business and agreements between partners who agree to such a covenant in anticipation of the dissolution of a partnership. See Malsberger, supra note 27, at 900-01. But in 1989, the statute was re-interpreted by the courts to only prohibit unreasonable covenants not to compete. See id. (emphasis added). So, in 2001, Oklahoma revised its statute making it lawful for a former employee to engage in the same business as that conducted by the former employer or in a similar business as that conducted by the former employer as long as the former employee does not directly solicit the sale of goods, services or a combination of goods and services from the established customers of the former employer. OKLA. STAT. ANN. tit. 15 217 (2001). However, the legislature failed to define who is considered an established customer. Id. 36. See Malsberger, supra note 27, at 171, 242, 333, 710. In Coloradothe agreement must still be considered reasonable even if it fits within one of these exceptions. See id. at 171.

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37. See Malsberger, supra note 27, at 242, 487, 710, 900. 38. See W. VA. CODE. ANN. 47-18-3(a) (Michie 1995). See also Malsberger, supra note 27, at 1150. Colorado allows a contractual provision providing for recovery of the expense of

educating and training an employee who has served an employer for a period of less than two years. Id. at 170. 39. Some states are still grappling with the issue. Connecticuts bill, S.B. 1307 failed in 1999. It would have barred employers from making an employee sign a noncompetition covenant as a condition of initial and continued employment. Malsberger, supra note 13, at 625. See also S.B. 1307, 1999 Gen. Assemb., Reg. Sess. (Ct. 1999), available at http://www.cga.state.ct.us (last visited Dec. 30, 2001). 40. LA. REV. STAT. ANN. 23:921 (West 2001). 41. Malsberger, supra note 27, at 710. 42. Id. at 997. 43. See, e.g., Malsberger, supra note 13, at 559, 648, 747. 44. Arizona and New York do not have statutes prohibiting non-compete agreements, though both have strong case law precedent prohibiting non-compete agreements for physicians that would prevent patients from having access to their doctors. See Malsberger, supra note 13, at 557, 1481. 45. This note does not cover lawyers since most states have adopted the ABA Model Rules or a version of the Rules, which generally prohibits restrictions on the right of lawyers to practice after termination of the relationship. See Malsberger, supra note 27, at 1234. 46. See Malsberger, supra note 13, at 1671; Malsberger, supra note 27, at 206, 563. 47. See Malsberger, supra note 27, at 206, 563.

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48. Malsberger, supra note 13, at 1672. 50. Malsberger, supra note 13, at 873. 51. VT. STAT. ANN. tit. 26 281(c) (1998). 52. ME. REV. STAT. ANN. tit. 26 599 (West 1999); MASS. GEN. LAWS ch. 149, 186 (1998). 53. MASS. GEN. LAWS ch. 149, 186 (West 1998). 54. ME. REV. STAT. ANN. tit. 26 599 (West 1999). 55. This example may seem futile because a new employer may not want to risk employing a person of that character, but that depends on how desperate the new station is to hire the employee. 56. S.B. 1042, 45th Leg., Reg. Sess. (Ariz. 2002) available at http://www.azleg.state.az.us (last visited April 20, 2002); S.S.B. 3116, 79th Gen. Assemb., Reg. Sess. (Iowa 2002) available at http://www.legis.state.ia.us (last visited April 20, 2002); S.B. 753, 91st Gen. Assemb., Reg. Sess. (Mo. 2002) available at http://www.moga.state.mo.us (last visited April 10, 2002); S.B. 640, 143rd Gen. Assemb., Reg. Sess. (N.C. 2001) available at http://www.ncga.state.nc.us (last visited Dec. 30, 2001); Assemb., No. 1305, 209th Leg., Reg. Sess. (N.J. 2000) available at http://www.njleg.state.nj.us (last visited Dec. 30, 2001); H.B. 4419, 74th Leg., Reg. Sess. (W. Va. 2000) available at http://www.legis.state.wv.us (last visited Dec 30, 2001); S.B. 6373, 57th Leg., Reg. Sess. (Wash. 2002) available at http://www.leg.wa.gov (last visited April 20, 2002). Only Illinois bill became law. S.B. 0720, 92nd Gen. Assemb., Reg. Sess. (Ill. 2001) available at http://www.legis.state.il.us (last visited Dec. 30, 2001). 57. See W. VA. CODE. ANN. 47-18-3(a) (Michie 1995). 58. H.B. 4419, 74th Leg., Reg. Sess. (W. Va. 2000) available at http://www.legis.state.wv.us (last visited Dec. 30, 2001).

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60. Id. 61. S.B. 753, 91st Gen. Assemb., Reg. Sess. (Mo. 2002) available at

http://www.moga.state.mo.us (last visited April 10, 2002). 62. Id. The original bill considered was S.B. 555, 91st Gen. Assemb., Reg. Sess. (Mo. 2001) available at http://www.moga.state.mo.us (last visited April 10, 2002). 63. S.S.B. 3116, 79th Gen. Assemb., Reg. Sess. (Iowa 2002) available at

http://www.legis.state.ia.us (last visited April 20, 2002). 64. S.B. 6373, 57th Leg., Reg. Sess. (Wash. 2002) available at http://www.leg.wa.gov (last visited April 20, 2002). 65. New Jerseys bill states: Any provision of an employment contract or agreement between a broadcasting industry employer and an employee of that employer which restricts the right of the employee to obtain employment after the termination of the employment relationship by the employer, by mutual agreement of the employer and the employee or by the expiration of the contract or agreement, shall be void and unenforceable. A broadcasting industry employer who violates the provisions of this section shall be liable for reasonable attorneys fees and costs associated with litigation of an affected employee or former employee. For the purposes of this section, broadcasting industry employer means an employer in the broadcasting industry, including any television or radio station or network or entity affiliated with a television or radio station or network. Assemb. No. 1305, 209th Leg., Reg. Sess. (N.J. 2000) available at http://www.njleg.state.nj.us (last visited Dec. 30, 2001); S.B. 640, 143rd Gen. Assemb., Reg. Sess. (N.C. 2001) available at http://www.ncga.state.nc.us (last visited April 20, 2001). 66. S.B. 1042, 45th Leg., Reg. Sess. (Ariz. 2002) available at http://www.azleg.state.az.us (last visited April 20, 2002). 67. Id.

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68. S.B. 720, 92nd Gen. Assemb., Reg. Sess. (Ill. 2001) available at http://www.legis.state.il.us (last visited Dec. 30, 2001). 69. Id. 70. Illinois Governor George H. Ryan posted a message on the General Assembly web page addressed to the Illinois Senate explaining why he vetoed the bill. That message is available at http://www.legis.state.il.us/legisnet/legisnet92/sbgroups/sb/920SB0720gms.html (July 18, 2001). 71. Id. 72. See AFTRA press release available at http://www.aftra.org/resources/pr/1101/illinois.html (last visited Dec. 30, 2001). 73. See http://www.nielsenmedia.com; http://www.arbitron.com. 74. See http://www.nielsenmedia.com. 75. Id. 76. Some markets like Helena, Montana only have a WB and an NBC affiliate, with only the NBC affiliate providing local news. Other markets like Philadelphia have an ABC, NBC, CBS, WB, UPN, FOX, PAX-TV and numerous independent stations which provide news. NAPTE STATION LISTING GUIDE, 180, 193, 254 (Beth Braen, ed. Colony Publishing 2001)(1985). 77. The RTNDA study shows more than half (50.2 percent) of all people who work in television news are under contract, and nearly as many (43.1 percent) have non-compete agreements Percentage of TV News people Under Contract or Non-Competes, 2001 Radio and Television Salary Survey, available at http://www.rtnda.org/research/salaries.html (last visited Dec. 30, 2001). 78. Id. 79. Id.

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80. Id. 81. Id. The survey shows fifty-percent of producers working in television news are under contract, and fifty-percent of producers working in television news have signed a non-compete agreement. 82. In the survey, seventeen-percent of all photographers working in television news are under contract and twelve-percent of all photographers working in television news are required to sign non-compete agreements. Percentage of TV News people Under Contract or Non-Competes, 2001 Radio and Television Salary Survey, available at

http://www.rtnda.org/research/salaries.html (last visited Dec. 30, 2001). 83. Interview with Steve Hertz, President, If Management, New York, New York (Sept. 10, 2001). 84. Anchors who have established credibility through longevity in the top-fifty markets could far exceed that average. Latest statistics are from the year 2000. Television News Salaries, 2001 Radio and Television Salary Survey, available at http://www.rtnda.org/research/salaries.html (last visited Dec. 30, 2001). 85. See Alison Romano, Short Takes, Broadcasting & Cable reprinted in Shoptalk available at http://www.tvspy.com/shoptalk_archive.cfm?t_shoptalk_id=1701&page=1, (Sept. 10, 2001). 86. See Television News Salaries, 2001 Radio and Television Salary Survey, available at http://www.rtnda.org/research/salaries.html (last visited Dec. 30, 2001). The broadcast union, American Federation of Television and Radio Artists, commented to the Illinois legislature that our union found broadcasters making about 8-dollars an hour and working at other jobs like waitressing to make ends meet. Broadcast Industry Free Market Act: Hearing on S.B. 0720 Before S. Rules Comm., 92nd Gen. Assemb., Reg. Sess. (Ill. 2001) (statement of the President of

46

the Chicago local of AFTRA, Dick Kay) (referring to broadcasters restricted by non-compete agreements who are working in Chicago, the third market in the country). 87. See Television News Salaries, 2001 Radio and Television Salary Survey, available at http://www.rtnda.org/research/salaries.html (last visited Dec. 30, 2001). 88. Id. 89. Id. Most reporters are accompanied by photographers but cable outlets, like New York 1, still require reporters to shoot their own video. Furthermore, cable outlets pay far less than the mainstream television stations because their revenues are far less. 90. Id. Other on-air broadcasters such as sports anchors earn less than news anchors; sports reporters make slightly less than news reporters, and weathercasters average more money per year than news reporters, but less than news anchors. Off air broadcast employees such as producers who put the show together average forty-eight-thousand dollars a year in a top twenty-five-market. Id. Salaries take a dramatic turn downward to the smaller markets. Id. 91. See An Act Relative to Freedom of Employment in the Broadcast Industry: Hearing on S.B. 76. Before the Commerce and Labor Comm., 181st Gen. Ct., Reg. Sess. (Mass. 1998)

(statement of Executive Director of the American Federation of Television and Radio Artists, Dona Sommers). 92. Interview with Steve Hertz, President, If Management, New York, New York (Sept.10, 2001). 93. Interview with Paul Lewis, WTIC-TV News Director, Hartford, Conn. (Dec. 28, 2001) 94. See Non-compete clauses in employment contracts within the broadcast industry, Hearing on S.B. 0555 Before S. Commerce & Envt Comm., 91st Gen. Assemb., Reg. Sess. (Mo. 2001)

47

(statement of President of the St. Louis Local of the American Federation of Television and Radio Artists, Patrick Murphy). 95. Non-compete clauses in employment contracts within the broadcast industry, Hearing on S.B. 0555 Before Senate Commerce & Envt Comm., 91st Gen. Assemb., Reg. Sess. (Mo. 2001) (statement of Missouri Broadcasters Association, Don Hicks). Where an employee understands that a non-compete agreement is required for employment, signs the agreement, and is paid a good salary in return, there is sufficient consideration for enforcement Id. 96. An Act Relative to Freedom of Employment in the Broadcasting Industry: Hearing on 26 MRSA 599 Before the Labor Comm., 119th Leg., Reg. Sess. (Me. 1999) (statement of Immediate Past President of the Maine Association of Broadcasting and current General Manager of WABI-TV, Mike Young). 97. See Television News Salaries, 2001 Radio and Television Salary Survey, available at http://www.rtnda.org/research/salaries.html (last visited Dec. 30, 2001). Megan Lynch, a former radio traffic reporter for Metro Networks in St. Louis, testified before the Missouri Senate Commerce and Environment Committee that she was not able to negotiate the terms of her covenant not to compete. See Non-compete clauses in employment contracts within the

broadcast industry, Hearing on S.B. 0555 Before S. Commerce & Envt Comm., 91st Gen. Assem., Reg. Sess. (Mo. 2001) (statement of former broadcaster, Megan Lynch). At the time, I signed the contract because I needed a job. Id. She says she signed her first non-compete with Metro for a wage of $10 an hour. Thats roughly 20,000 a year before taxes. Id. She admits being given higher compensation in subsequent years, however those raises never allowed her earn more than 30,000 dollars a year. Id.

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98. Interview with Ken Fishkin, TV News Agent, Boston, Mass. (Dec. 28, 2001). Ken Fishkin has been representing talent in the broadcast industry for more than twenty years and represents a number of broadcasters in Boston, Massachusetts. Id. He is just starting to renegotiate contracts without the covenant not to compete clauses and does not have any definitive statistics on whether salaries have increased since MASS. GEN. LAWS ch. 149, 186 (1998) was enacted. Id. However, Fishkin, like many broadcasters, compared MASS. GEN. LAWS ch. 149, 186 (1998) to the old reserve clause in baseball. That clause kept players glued to one team. When the reserve clause was struck down in the late 70s and free agency became the standard, players switched teams and salaries rose dramatically. Joanne Ostrow, Weathermans case tests TV standard: Coniglio at center of no-compete clause, The Denver Post, Mar. 14, 1999 at L-01. 99. Interview with Paul Lewis, WTIC News Director, Hartford, Ct. (Dec.27, 2001). 100. Id. 101. Id. 102. Id. Reporters, anchors and producers at Paul Lewis station in Hartford, Connecticut are under contract. Id. Common perks for on air talent in the top fifty markets can include clothing, hair, and makeup allowances and free parking. 103. See Broadcast Industry Free Market Act: Hearing on S.B. 0720 Before S. Rules Comm., 92nd Gen. Assemb., Reg. Sess. (Ill. 2001) (statement of Illinois Radio Network News Director, James R. Anderson). 104. Id. 105. Most contracts run between three to five years for anchors, and one to three years for reporters. See An Act Concerning Employment Contracts in the Broadcast Industry: Hearing on Assemb. No. 1305 Before the Labor Comm., 209th Leg., Reg. Sess. (N.J. 2000) (statements of

49

announcers employed by television station WJNU-TV and announcers employed by radio station WHTZ-FM); An Act Relative to Freedom of Employment in the Broadcasting Industry: Hearing on 26 MRSA 599 Before the Labor Comm., 119th Leg., Reg. Sess. (Me. 1999) (statements of television newscast director, David Gordon; WVII-TV main anchor Carrie Blake; WVII-TV producer Jaeme Ahern; WVII-TV employee Bob Dyn); Broadcast Industry Free Market Act: Hearing on S.B. 0720 Before S. Rules Comm., 92nd Gen. Assemb., Reg. Sess. (Ill. 2001) (statement of Illinois Radio Network News Director, James R. Anderson). 106. See id. 107. See An Act Relative to Freedom of Employment in the Broadcasting Industry: Hearing on 26 MRSA 599 Before the Labor Comm., 119th Leg., Reg. Sess. (Me. 1999) (statement of WVIITV producer, Jaeme Anern). The American Federation of Television and Radio Artists

(AFTRA), which represents broadcasters in most union-organized shops, testified before every legislature with a pending bill. In Illinois, the President of the Chicago local of AFTRA stated, [i]f we want better wages and benefits and our present employer will not budge, in most cases we have to leave town, uproot our families from our churches, schools and community services and move on. Broadcast Industry Free Market Act: Hearing on S.B. 0720 Before S. Rules Comm., 92nd Gen. Assemb., Reg. Sess. (Ill. 2001) (statement of President of the Chicago local of AFTRA, Dick Kay). Maine ultimately passed a law banning non-compete agreements. ME. REV. STAT. ANN. tit. 26 599 (West 1999). 108. An Act Relative to Freedom of Employment in the Broadcasting Industry: Hearing on 26 MRSA 599 Before the Labor Comm., 119th Legislature, Reg. Sess. (Me. 1999) (statement of WVII-TV producer, Jaeme Ahern).

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109. An Act Relative to Freedom of Employment in the Broadcasting Industry: Hearing on 26 MRSA 599 Before the Labor Comm., 119th Legislature, Reg. Sess. (Me. 1999) (statement of WVII-TV main anchor, Carrie Blake). 110. See, e.g., Tim Cuprisin, City loses in love or money battle, Milwaukee Journal Sentinal, Oct. 11, 2000 at 14B. Stacie Dubin, one of the rising stars of Milwaukee TV news, has left her Channel 6 anchor-reporter gig after declining the stations contract offer. Id. Dubin had been on the air for four years in Milwaukee, her hometown. Id. Dubin wont talk dollars. But she clearly didnt consider the contract offer from Channel 6 enough to keep her there. Id. Dubin had a standard one-year non-compete clause. Id. In another instance, contract negotiations broke down between Diane Roberts and WFLA-TV after her contract expired. Diane Lacey Allen, WFLA-TV Loses 2 On-Air Staffers, The Ledger, Feb. 27, 2000 at B3. Still, the station made it clear, her six-month non-compete agreement remained in effect. Id. See also Hearne Christopher, Jr., Contract disagreement leads to Schaefers leaving Fox 4, The Kansas City Star, at F8; Julia Keller, WCMH-TV Anchor Pace Quits, The Columbus Dispatch, at 7F; Monica Yant, Meteorologist York sues former employer WFLA, St. Petersburg Times, at 2B (all state noncompete agreements were still in effect after contract negotiations broke down between on-air broadcasters and station management). 111. If they want to fight them, they know it could take months or years for judicial review while they are unemployed or forced to move anyway to earn a living while fighting it. Broadcast Industry Free Market Act: Hearing on S.B. 0720 Before S. Rules Comm., 92nd Gen. Assemb., Reg. Sess. (Ill. 2001) (statement of the President of the Chicago local of AFTRA, Dick Kay).

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112. See, e.g., Ed Bark, WFAA takes Rowlett off air; Lucrative new post will have to wait, says departing news anchors contract, The Dallas Morning News, Apr. 27, 1999 at 23A; John Engstrom, Ventrella Bound for KIRO; Former KING Sports Anchor Will Start On Radio, Seattle Post-Intelligencer, July 7, 1993 at D6; Walker Johnson, Dream Team anchors are TV heavyweights, Knoxville News-Sentinel, Dec. 11, 1998 at T20; Mark Lorando, The Invisible Anchorman, Living, Oct. 10, 1994 at C1. 113. See generally BIA Financial Network, Inc, State of the Television Industry 2001: Report: What is Owned by Whom and Where available at

Ownership

http://www.bia.com/industryreps.htm (last visited December 30, 2001); BIA Financial Network, Inc., State of the Radio Industry: Ownership and Consolidation 2001 available at http://www.bia.com/industryreps.htm (last visited December 30, 2001). 114. See Richmond Bros Inc. v. Westinghouse, 256 N.E.2d 304 (Mass. 1970) (plaintiff sued employee and radio company who hired him away). Some stations will admit that a noncompete agreement in a contract with a former station will scare them off. Channel 7 News Director Bob Longo confirmed Tuesday that the station had spoken with Nigrelli and consider him an excellent reporter and promising anchor. Hes been working without a contract for some time but there is some language in his contract that precluded him from coming here and we stepped back for the time being. But you never say never. Dusty Saunders, Change in the Weather Could Land in Court, Denver Rocky Mountain News, Mar. 1, 1999 at 2D. 115. See, e.g., Midwest Television v. Oloffson, 699 N.E.2d 230 (Ill. 1998); Murray v. Lowndes Co. Broadcasting Co., 284 S.E.2d 10 (Ga. 1981). 116. See Midwest Television, 699 N.E.2d at 235; Murray, 284 S.E.2d at 10.

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117. Non-compete clauses in employment contracts within the broadcast industry, Hearing on S.B. 0555 Before S. Commerce & Envt Comm., 91st Gen. Assemb., Reg. Sess. (Mo. 2001) (statement of President of the St. Louis Local of the American Federation of Television and Radio Artists, Patrick Murphy) (testifying why the bill should pass, barring non-competes in the broadcast industry). 118. See id. 119. See Beckman v. Cox Broadcasting Corp., 296 S.E.2d 566, 567 (Ga. 1982). 120. Id. at 568. 121. See id. 122. Murray v. Lowndes Co. Broadcasting Co., 284 S.E.2d 10 (Ga. 1981). 123. See id. 124. Id. 125. Interview with Murrays former attorney, Gary Wisenbaker, Savannah,

Georgia (December 27, 2001) Wisenbaker kept track of Murrays career until Murray moved to Atlanta, Georgia. Id. 126. Id. 127. Id. 128. Midwest Television v. Oloffson, 699 N.E.2d 230, 235 (Ill. 1998). 129. Interview with Gary Oloffson, Radio Disc Jockey, Peoria, Ill. (Dec. 24, 2001). 130. See Midwest Television, 699 N.E.2d at 235. 131. See id. at 236. 132. Interview with Gary Oloffson, Radio Disc Jockey, Peoria, Ill. (Dec. 24, 2001). 133. Id.

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134. Id. 135. Id. 136. Id. 137. See Television News Salaries, 2001 Radio and Television Salary Survey, available at http://www.rtnda.org/research/salaries.html (last visited Dec. 30, 2001). 138. See e.g., MICH. COMP. LAWS. ANN. 445.788 (1989); WIS. STAT. ANN. 103.465 (West 2001). 139. See, e.g., Richmond Bros., Inc v. Westinghouse Broadcasting Co., 256 N.E.2d 304 (Mass. 1970); Wake Broadcasters v. Crawford, 114 S.E.2d 26 (Ga. 1960). 140. Richmond Bros., Inc., 256 N.E.2d 304 at 306-08. 141. Id. at 307. 142. See e.g., Beckman v. Cox Broadcasting Corp., 296 S.E.2d 566 (Ga. 1982) (upheld six month non-compete); Cullman Broadcasting Co., Inc. v. Bosley, 373 So. 2d 830 (Ala. 1979) (upheld one-year non-compete); Murray v. Lowndes Co. Broadcasting Co., 284 S.E.2d 10 (Ga. 1981) (upheld 2 year non compete). 143. Wake Broadcasters v. Crawford, 114 S.E.2d 26, 28 (Ga. 1960). 144. See id. at 27. 145. Id. 146. See id. 147. See id. at 28. This case is vastly different from Cullman, which restricted an employee from working in radio or TV station within one county. See Cullman Broadcasting Co., Inc. v. Bosley, 373 So. 2d 830 (Ala. 1979). The covenant in Cullman was upheld. Id.

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148. See Metro Traffic Control, Inc. v. Shadow Traffic Network, 22 Cal. App.4th 853 (Cal Ct. App. 1994). 149. Id. at 857. 150. CAL. BUS. & PROF. CODE 16600 (West 2001). 151. Metro Traffic Control, Inc., 22 Cal. App.4th at 860. 152. See id. at 863. 153. See, e.g., American Broadcasting Co., Inc. v. Wolf, 420 N.E.2d 363 (N.Y. 1981); Bennett v. Storz Broadcasting Co., 134 N.W.2d 892 (Minn 1965); Metro Traffic Control, Inc., 22 Cal. App.4th at 858. 154. Letter from KFOR-TV, Oklahoma City to Robin Marsh, News Anchor 1 (March 13, 1992) (on file with Oklahoma County Courthouse, CJ 95-1697). 155. See generally Palmer Communications Inc. v. Marsh, Transcript of Proceedings had on the 7th and 10th days of Apr. 1995. 156. See, e.g., American Broadcasting Co., Inc. v. Wolf, 420 N.E.2d 363 (N.Y. 1981). 157. Clooney held that the employer was entitled to protection because the services of the plaintiff were special, unique, unusual and of an extraordinary artistic character. Compare Clooney v. WCPO Television Division of Scripps-Howard Broadcasting Co., 300 N.E.2d 256 (Ohio 1973) with American Broadcasting Co., Inc. v. Wolf, 420 N.E.2d 363 (N.Y. 1981) and Nigra v. Young Broadcasting of Albany, 676 N.Y.S.2d 848 (N.Y. Sup. Ct. 1998). 158. See Wolf, 420 N.E.2d at 363. 159. Id. at 397. 160. Id. at 398. 161. Id. at 397

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162. Id. at 398. 163. See Wolf, 420 N.E.2d 363 at 401-02. 164. See id. at 403. 165. Id. at 404. 166. Id. at 403. 167. See id. at 404. 168. See id. 169. Id. at 405. 170. See Nigra v. Young Broadcasting of Albany, 676 N.Y.S.2d 848, 849 (N.Y. Sup. Ct. 1998). 171. See id. at 848. 172. See id. 173. Id. 174. Id. 175. Id. 176. See id. 177. See American Broadcasting Co., Inc. v. Wolf, 420 N.E.2d 363, 403 (N.Y. 1981); Nigra, 676 N.Y.S.2d at 849. 178. See, e.g., Beckman v. Cox Broadcasting Corp., 296 S.E.2d 566, 567 (Ga. 1982); T.K. Communications, Inc. v. Herman, 505 So. 2d 484 (Fl. 1987). 179. See, e.g., Beckman, 296 S.E.2d at 567; Herman., 505 So. 2d at 484. 180. See, e.g., Beckman, 296 S.E.2d at 567; Herman, 505 So. 2d at 484. 181. Vice President and General Manager of KFOR-TV, William Katsafanas, testified about the importance of ratings to a television station So whatever ratings we have is our only source of

56

income. And when it drops, our income drops. And in this case we believe substantially our income will drop. Palmer Communications Inc. v. Marsh, Transcript of Proceedings had on the 7th and 10th days of Apr. 1995, p.36 l. 20-23. 182. See id. 183. West Group Broadcasting, LTD. v. Bell, 942 S.W.2d 934, 936 (Mo. 1997). 184. See Beckman, 296 S.E.2d at 560. 185. See, e.g., Beckman, 296 S.E.2d at 567; T.K. Communications, Inc. v. Herman, 505 So.2d 484 (Fla. 1987). 186. See, e.g., Beckman, 296 S.E.2d at 567; Bell, 942 S.W.2d at 936; Herman, 505 So.2d at 484; Richmond Bros Inc. v. Westinghouse, 256 N.E.2d 304 (Mass. 1970). 187. Like any American family, anchors and disc jockeys live in the community, go to church or synagogues, participate in their kids athletic teams or school activities, shop in the neighborhood grocery store, etc. Every person they meet in person could change channels to watch or listen to them because that person has now met a local celebrity. Others may never switch stations because they have watched the same local news or listened to the same radio station for decades. 188. Richmond Bros Inc. v. Westinghouse, 256 N.E.2d 304, 307 (Mass. 1970). 189. Id. 190. See id. 191. See id. 192. Beckman v. Cox Broadcasting Corp., 296 S.E.2d 566 (Ga. 1982). 193. See id. at 569. 194. Id.

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195. Id. 196. T.K. Communications, Inc. v. Herman, 505 So. 2d 484 (Fl. 1987). 197. Id. at 485. 198. FLA. STAT. ANN. 542.23 (1995). 199. Herman., 505 So.2d at 486. 200. Id. 201. Id. The court in West Group Broadcasting, LTD. v. Bell refused to apply the decision in T.K Communications, Inc. v. Herman because Bell did not try to capitalize on her name or personality as Hurricane Hannah when she moved from one radio station to a competitor in Joplin, Missouri. 942 S.W.2d 934, 938-39 (Mo. 1997). She used a different name and worked a different shift at the new station. Id. Still, West Group Broadcasting, LTD attempted to enjoin her from using her voice on the air but the court found [t]he only things Bell took with her and used when she went from KXDG to KSYN were her aptitude, skill, mental ability, and the voice with which she was born. Id. at 938. This scenario could not be repeated in television news because its not just a voice being used at a competitor, but a recognizable face. 202. AN ACT RELATIVE TO FREEDOM TO EMPLOYMENT IN THE BROADCASTING INDUSTRY, 181ST GEN. COURT, MASSACHUSETTS HOUSE
OF

REPRESENTATIVES BILL SUMMARY 6 (summarizes

reasons for passing the bill which became MASS. GEN. LAWS ch. 149, 186 (1998)). 203. See id. 204. Id. 205. Palmer Communications Inc. v. Marsh, Transcript of Proceedings had on the 7th and 10th days of Apr. 1995, p.89 l. 6-11.

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206. Id. at p.94 l. 17-23. 207. See id. at p. 84 l. 20-23. 208. See id. at p. 84-85 l. 24-13. 209. See id. at p. 36 l. 2-12. 210. See id. at p. 160 l. 23-25; p. 161 l. 1-19. 211. See id. at p. 91 l. 4-12. 212. See id. 213. See id. 214. See id. 215. See id. at p. 96 l. 1-6. 216. See id. at p. 96 l. 13-18 217. See id. at p. 96 l.19-24. 218. Id. at p. 98 l. 6-13. 219. Id. at p. 97 l. 5-6; p. 98 l. 18-23. 220. Ohio/Oklahoma Hearst-Argyle Television, Inc d/b/a KOCO-TV v. Iwasinski, Transcript of Motion Hearing had on the 21st Day of Sept. 1999, p. 140 l. 17-20. 221. Id. at p. 22 l. 15-16. Testimony from KOCO-TVs General Manager stated how a reporter is promoted. [B]efore Miss Iwasinski came to work in our employment she was an unknown commodity in our marketplace. She came to us from Waco, Texas. We went about, for the last two years, establishing her name and her likeness in the marketplace as a credible reporter, someone that was promoted on our air outside of her on-air performance as a reporter. And viewers became accustomed to seeing her on our air for the last two years, which is part of establishing the credibility of our reporting staff, the continuity of our reporting staff and building our product through our reporters in the market.

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Id. at p. 19 l. 10-20. 222. See id. at p. 11 l. 20-25; p. 12 l. 1-5. 223. See id. at p. 102 l. 7-22. 224. Ohio/Oklahoma Hearst-Argyle Television, Inc d/b/a KOCO-TV v. Iwasinski, Transcript of Motion Hearing had on the 21st Day of Sept. 1999, p. 22 l. 21 225. Id. at p. 50 l. 1-2; p. 51 l. 4-11. 226. Id. at p. 45 l. 8-10. 227. Id. at p. 45 l. 21-24. While KOCO-TV admitted to minimal consultant training for

Iwasinski, other news directors do offer regular consultant training as well as weekly story critiques to every on-air employee. Interview with Paul Lewis, WTIC-TV News Director, Hartford, Conn. (Dec. 28, 2001). 228. Id. at p. 80 l. 21-25; p. 81 l. 1-4; p. 117 l. 19-24. 229. See id. at p. 118 l. 1-22. Most stations do provide annual reviews, however, those are mainly done for legal reasons. Those reviews do not critique specific stories, but focus generally on whether the work is being accomplished and whether the reporter is a accomplishing the overall job. 230. Ohio/Oklahoma Hearst-Argyle Television, Inc d/b/a KOCO-TV v. Iwasinski, Transcript of Motion Hearing had on the 21st Day of Sept. 1999 at p. 140 l. 13-14. It will never be known if the defendant could have won on appeal or if that temporary injunction would have been overturned. Iwasinski could not afford to appeal the decision for fear of having to pay KOCOTVs attorneys fees if she lost. Her attorney and KOCO-TV reached a compromise to allow Iwasinski to work on air in March 2000, six months after the injunction was issued, and six

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months before her non-compete agreement expired. Interview with Iwasinskis Attorney, Phillip Watts, Oklahoma City, Okla. (Jan. 2, 2002). 231. Ohio/Oklahoma Hearst-Argyle Television, Inc d/b/a KOCO-TV v. Iwasinski, Transcript of Motion Hearing had on the 21st Day of Sept. 1999 at p. 140 l. 15-16. 232. Id. at p. 141 l. 5-6. 233. Richmond Bros Inc. v. Westinghouse, 256 N.E.2d 304, 307 (Mass. 1970). 234. Author obtained an official copy of the Cosmos Broadcasting Employment Agreement from a former employee of WFIE-TV in Evansville Indiana. (emphasis added). 235. Author obtained an official copy of a portion of the Sinclair Employment Contract which has a section titled, Covenant Not To Compete And Not To Solicit, 11.1(a). See also BIA Financial Network, Inc, State of the Television Industry 2001: Ownership Report: What is Owned by Whom and Where available at http://www.bia.com/industryreps.htm (last visited December 30, 2001). 236. Bennett v. Storz Broadcasting Co., 134 N.W.2d 892, 895 (Minn. 1965). 237. Id. 238. Id. at 894. 239. Id. at 894-95. 240. Id. at 900. 241. See Bennett, 134 N.W. 2d at 900. 242. See id. 243. In KWEL, Inc. v. Prassel, 527 S.W.2d 821 (Tex. Ct. App. 1975), the station terminated Mr. Prassell yet still tried to enforce a covenant not to compete when Mr. Prassell was hired at a competing station the following week. The court determined that KWEL was attempting to

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immobilize the defendant from a course of conduct which it may well be his legal right to pursue. Id. at 823. The court therefore refused to overturn the district courts denial of a temporary injunction. Id. See also TV Sportscaster Apple Looking For New Job, St. Louis Post-Dispatch, Jan. 11, 1990 at 2D. Sportscaster Gary Apple had been working without a contract for more than six months after being demoted to the weekend sports anchor from a primary sports anchor position. Id. Apple said, Its been very difficult working on a day-to-day basis, not knowing what the next day is going to bring. Im looking for a new job. Id. But even after a demotion, he was forced to leave town because of his non-compete agreement. Id. 244. Orion Broadcasting, Inc. v. Forsythe, 477 F.Supp. 198, 199 (W.D. Ken. 1979). 245. Id. 246. Id. at 198. 247. See id. at 199. 248. Id. at 201. 249. Id. 250. See Television News Salaries, 2001 Radio and Television Salary Survey, available at http://www.rtnda.org/research/salaries.html (last visited Dec. 30, 2001). 251. American Broadcasting Co., Inc. v. Wolf, 420 N.E.2d 363, 397 (N.Y. 1981). 252. Bennett v. Storz Broadcasting Co., 134 N.W.2d 892, 899 (Minn 1965). 253. See, e.g., Diane Lacey Allen, WFLA-TV Loses 2 On-Air Staffers, The Ledger, Feb. 27, 2000 at B3; Hearne Christopher, Jr., Contract disagreement leads to Schaefers leaving Fox 4, The Kansas City Star, at F8; Tim Cuprisin, City loses in love or money battle, Milwaukee Journal Sentinel, Oct. 11, 2000 at 14B; Julia Keller, WCMH-TV Anchor Pace Quits, The Columbus

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Dispatch, at 7F; Monica Yant, Meteorologist York sues former employer WFLA, St. Petersburg Times, at 2B.

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