ūüéā KelseyFarish.com’s 1st Birthday!

As of November 2018, KelseyFarish.com has officially turned one year old! When I come across something in the news about digital rights, free speech, intellectual property or other aspects of the media and entertainment industries, I really do love trying to get to the heart of the issue, and writing about it here. It’s a continual joy and fantastic learning experience for me to share with the world the legal stories I find most interesting. And of course, I hope you enjoy reading my posts!

In honour of reaching this milestone, here are my ten most popular posts in this first year of blogging at KelseyFarish.com.

10. Ricciardo’s Ritual Returns at Monaco Grand Prix

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Australian Formula One driver Daniel Ricciardo has an interesting celebratory ritual when he stands on the podium after a race: he drinks champagne from his sweaty racing shoe. I wrote about how F1, keen to capitalise on the popularity of the stunt, trademarked the name of this quirky act, known as a ‚Äúshoey.‚ÄĚ Now, it’s pretty clear to me why this post became popular… my motor sport loving husband posted a link to this post on a F1 subreddit! Thanks, love! ūüėė

09. California Bar Exam; Introduction

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This summer I decided to register for the July 2019 California bar exam – wish me luck! I thought it might be helpful to keep a written record of my experiences, thoughts, predictions, and study strategy (for more, see my ‚ÄúCalifornia Bar Exam‚ÄĚ category tag). This post in particular explains my decision, and sets out the basics of how to become dual-qualified, and what the California bar exam entails.

08. No more Safe Harbours for EU-ser Uploaded Content?

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Throughout the summer, there was heated debate concerning the EU’s sweeping new Copyright Directive. This post explored intermediary liability over user-uploaded content. Essentially, digital platforms and internet service providers argued that they are not responsible for any copyright infringing material uploaded by their users. I was surprised that this post was popular, as it was a fairly “technical” topic!

07. Lights, Camera, Data Protection

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Cannes: movie stars, auteurs, glamour, the French Riviera, and… data privacy? Before the cameras start rolling, a film production company will need to agree service contracts for cast and crew. In honour of the Cannes Film Festival happening during the same time as my post, I wrote about how data protection issues need to be addressed for an actor’s contract under the new GDPR.

06. Lawyerpalooza: When Music Festivals get Intellectual Property Licensing Wrong

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Artists and musicians often use license agreements to ensure their work is used only in accordance with their wishes. This post explains how licensing agreements work when commercialising intellectual property, and explored the case of an artist suing the Lallopalooza festival owners for misusing his designs. Perhaps unsurprisingly, although this post was written in February, it received most of its hits in August – during Lallopalooza!

05. Reputation: Taylor Swift’s Protections Under American and English Defamation Law

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The right to freedom of expression is not an absolute right: there are certain restrictions in place to protect an individual‚Äôs reputation. But those restrictions vary significantly, depending on which side of the Atlantic you‚Äôre on. Using Taylor Swift’s lawsuit against a blogger who claimed Swift’s music video had alt-right political connections, I explained the differences between US and UK defamation and free speech laws.

04. The Copyright Between Oceans?

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Copyright law only applies to the expression of ideas (such as the words or images), and not the ideas themselves. This post used a lawsuit against the author and film producers of The Light Between Oceans to explore this doctrine, which is known as the “idea‚Äďexpression dichotomy” or “sc√®ne √† faire.” It is also the post I submitted for my (successful) application to become the CopyKat Intern at the 1709 Copyright Law blog!

03. Is Posting Rap Lyrics on Instagram a #Hatecrime?

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A teenager who posted rap lyrics on Instagram was convicted of ‚Äúsending a grossly offensive message over a communications network,‚ÄĚ which was uplifted to a hate crime. This story received a lot of media attention here in England, so I decided to do some research on the legal – and societal – implications. The post covers the UK’s Criminal Justice Act 2003 and Communications Act 2003, as well as the European Convention on Human Rights.

02. Morality Clauses and Talent Contracts

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A “morality clause” permits an employer to end its contractual relationship with an individual if their conduct breaches certain ethical expectations. In early 2018 Netflix removed Kevin Spacey from its hit show House of Cards after Spacey was accused of sexual misconduct. I was inspired by the #MeToo movement, and wanted to write about this because Kevin Spacey claimed Netflix could not legally fire him, because his contract did not contain a morality clause.

01. Fame and Fortune: How do celebrities protect their image?

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In this post, I explain how celebrities protect and control the publicity associated with their name, image, and brand. Prior to researching “image rights,” I dismissed the topic as somewhat irrelevant to anyone who isn‚Äôt a celebrity. But writing this post helped me come to the realisation that these protections are relevant not only to the rich and famous, but to all of us. In a world of pervasive social media and surveillance, I think we should all be able to control our images and identity as we choose.

Thank you for reading!

Facebook and Privacy: cases, reports and actions in Europe

Facebook and Privacy: cases, reports and actions in Europe

A list of European enforcement action, official legislative (Parliamentary) reports, and cases concerning Facebook with respect to data protection and privacy. This is a work in progress, last updated November 2018.

Data Protection Commissioner (Ireland) v Facebook Ireland Limited, Maximillian Schrems [Case C-311/18]

  • Jurisdiction: European Union, Ireland
  • Status: Case still in progress
  • Authority:¬† Court of Justice of the European Union
  • Keywords: EU Data Protection Directive (95/46/EC); EU/US Privacy Shield; Fundamental Rights

Continue reading “Facebook and Privacy: cases, reports and actions in Europe”

Transatlantic Data Transfers: US-EU Privacy Shield under review

When personal data travels between Europe and America, it must cross international borders lawfully. If certain conditions are met, companies can rely on the US-EU Privacy Shield, which functions as a sort of “tourist visa” for data.¬†

Earlier this week (19 November) the United States Federal Trade Commission finalised settlements with four companies that the agency accused of falsely claiming to be certified under the US-EU Privacy Shield framework. This news closely follows the highly anticipated second annual joint review of the controversial data transfer mechanism. 

IDmission LLC,¬†mResource LLC,¬†SmartStart Employment Screening Inc., and¬†VenPath Inc. were slapped on the wrist by the FTC over allegations that they misrepresented their certification. But this is just the latest saga in an on-going debate regarding the Privacy Shield’s fitness for purpose. Only this summer,¬†the European Parliament urged the European Commission to suspend the Privacy Shield programme over security and privacy concerns.

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Background and purpose

Designed by the United States Department of Commerce and the European Commission, the Privacy Shield is one of several mechanisms in which personal data can be sent and shared between entities in the EU and the United States. The Privacy Shield framework thereby protects the fundamental digital rights of individuals who are in European Union, whilst encouraging transatlantic commerce.

This is particularly important given that the United States has no single, comprehensive law regulating the collection, use and security of personal data. Rather, the US uses a patchwork system of federal and state laws, together with industry best practice. At present, the United States as a collective jurisdiction fails to meet the data protection requirements established by EU lawmakers.

As such, should a corporate entity or organisations wish to receive European personal data, it must bring itself in line with EU regulatory standards, known as being ‚Äúprotected under‚ÄĚ the Privacy Shield. To qualify, companies must self-certify annually that they meet the requirements set out by EU law. This includes taking measures such as displaying privacy policy on their website, replying promptly to any complaints, providing transparency about how personal data is used, and ensuring stronger protection of personal data.

Today, more than 3,000 American organisations are authorised to receive European data, including Facebook, Google, Microsoft, Twitter, Amazon, Boeing, and Starbucks. A full list of Privacy Shield participants can be found on the privacyshield.gov website.

Complaints and non-compliance?

There is no non-compliance. We are fully compliant. As we’ve told the Europeans, we really don’t want to discuss this any further.

‚ÄĒGordon Sondland, American ambassador to the EU

Although the Privacy Shield imposes stronger obligations than its ancestor, the now-obsolete ‚ÄúSafe Harbor,‚ÄĚ European lawmakers have argued that ‚Äúthe arrangement does not provide the adequate level of protection required by Union data protection law and the EU Charter as interpreted by the European Court of Justice.‚ÄĚ

In its¬†motion to reconsider the adequacy of the Privacy Shield, the EU Parliament stated that ‚Äúunless the US is fully compliant by 1 September 2018‚ÄĚ the EU Commission would be called upon to ‚Äúsuspend the¬†Privacy Shield until the US authorities comply with its terms.‚ÄĚ The American ambassador to the EU, Gordon Sondland,¬†responded to the criticisms, explaining: ‚ÄúThere is no non-compliance. We are fully compliant. As we‚Äôve told the Europeans, we really don‚Äôt want to discuss this any further.‚ÄĚ

Vńõra Jourov√°, a Czech politician and lawyer who serves as the European Commissioner for Justice, Consumers and Gender Equality,¬†expressed a different view:¬†‚ÄúWe have a list of things which needs to be done on the American side‚ÄĚ regarding the upcoming review of the international data transfer deal. ‚ÄúAnd when we see them done, we can say we can continue.‚ÄĚ

Photo: Ambassador Sondland with Commissioner Jourova in the Berlaymont.
Jourov√° and Sondland, via a tweet from Sondland saying¬†he was “looking forward to our close cooperation on privacy and consumer rights issues that are important to citizens on both sides of the Atlantic.”¬†

The list from the Parliament and the First Annual Joint Review [WP29/255] (.pdf) concerns institutional, commercial, and national security aspects of data privacy, including:

  • American surveillance powers¬†and use of personal data for national security purposes and mass surveillance. In particular, the EU is unhappy with America‚Äôs re-authorisation of section 702 of the Foreign Intelligence Surveillance Act (FISA), which authorises government collection of foreign intelligence from non-Americans located outside the United States (Remember Edward Snowden and PRISM? See the Electronic Fronteir Foundation’s explanation here)
  • Lack of auditing¬†or other forms of effective regulatory oversight to ensure whether certified companies actually comply with the Privacy Shield provisions
  • Lack of guidance¬†and information made available for companies
  • Facebook and the Cambridge Analytica scandal,¬†given that 2.7 million EU citizens were among those whose data was improperly used. The EU Parliament stated it is ‚Äúseriously concerned about the change in the terms of service‚ÄĚ for Facebook
  • Persisting weaknesses¬†regarding the respect of fundamental rights of European data subjects, including lack of effective remedies in US law for EU citizens whose personal data is transferred to the United States
  • The Clarifying Overseas Use of Data (‚ÄúCLOUD‚ÄĚ) Act¬†signed into law in March 2018 allows US law enforcement authorities to compel production of communications data, even if they are stored outside the United States
  • Uncertain outcomes regarding pending litigation¬†currently before European courts, including¬†Schrems II¬†and¬†La Quadrature du Net and Others v Commission.

 

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Max Schrems is an Austrian lawyer and privacy activist.¬†In 2011 (at the age of 25) while studying abroad at Santa Clara University in Silicon Valley, Schrems decided to write his term paper on Facebook’s lack of awareness of European privacy law. His activism led to the replacement of the Safe Harbor system by the Privacy Shield.

What happens if the Privacy Shield is suspended?

In a¬†joint press release last month, the representatives from the EU and USA together reaffirmed ‚Äúthe need for strong privacy enforcement to protect our citizens and ensure trust in the digital economy.‚ÄĚ But that may be easier said than done.

In the event that the Privacy Shield is suspended, entities transferring European personal data to the United States will need to consider implementing alternative compliant transfer mechanisms, which could include the use of Binding Corporate Rules, Model Clauses, or establishing European subsidiaries. To ensure that the American data importer implements an efficient and compliant arrangement, such alternatives would need to be assessed on a case-by-case basis involving careful review of data flows, and the controller and processors involved.

Regardless of the method used to transfer data, American companies must ensure that they receive, store, or otherwise use European personal data only where lawfully permitted to do so. The joint statement noted above concluded by saying that the ‚ÄúU.S. and EU officials will continue to work closely together to ensure the framework functions as intended, including on commercial and national-security related matters.‚ÄĚ

The European Commission is currently analysing information gathered from its American counterparts, and will publish its conclusions in a report before the end of the year.

Noteworthy interview on new social media advertising regulations

Noteworthy interview on new social media advertising regulations

Earlier this autumn, several celebrities were investigated¬†by UK regulators for not labelling social media posts as “advertisements”. Given that so-called influencers can potentially sway the shopping habits of millions, the Advertising Standards Association published An Influencer’s Guide to making clear that ads are ads,¬†to help celebs and bloggers avoid misleading consumers. But what does this guide really mean in practical terms?¬†To better understand the world of influencers and online advertising, I’ve interviewed Nicole Ocran-Hegarty: journalist, style blogger, and Influencer Strategy Manager at Disney.

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Kelsey:  Nicole, you and I first met online about 15 years ago on the blogging platform Livejournal. Since then, we both Рcoincidentally Рmoved from the United States to London, where we finally met in real life!

Can you tell me a bit about your professional background in journalism, and what inspired you to begin your personal fashion blog, The Noteworthy?

Nicole:¬† I honestly cannot get over how the Internet brings people together. I remember typing away and commenting on your LiveJournal and messaging you from my childhood bedroom in Annandale, Virginia. You were constantly here there and everywhere and I was so jealous of that. Anyway, I’m already off topic!

My career in journalism started when I was 19 or 20 and a student at George Mason University. I had just started editing the Style pages of my university’s student newspaper,¬†the Fourth Estate. It was there that I really honed my craft, my love of writing, editing of interviewing. In my junior year I became editor-in-chief of the paper: I lived and breathed the paper, and didn’t want to do anything else but be in the Student Media office. I also was interning at the The Washington Post’s free daily paper, Express.

By the time I graduated from George Mason, I started another internship at the non-profit Student Press Law Center, fighting for First Amendment rights for students across America. At the same time I applied to City University in London, and went with their journalism masters programme! It was the best decision I ever made.

In London, I got my first job in entertainment journalism at Entertainment News, and I’ve since written for the Metro, The Sun and Refinery29 UK!¬†I decided to start The Noteworthy while I working in a job where I wasn’t really able to express myself through personal writing. When I got made redundant,¬†The Noteworthy¬†became a real outlet for me, as I was able to showcase my love of fashion, where I hadn’t been able to before.

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In addition to writing about style, fashion and beauty, Nicole routinely explores topics about feminism, politics, Black women, and pop and celebrity culture. Recently, she explained why she won’t shop at Topshop anymore in light of the Philip Green sexual harassment scandal.

Under the new Influencer‚Äôs Guide, bloggers only need to disclose something as an advert if: (1) they‚Äôve been ‚Äúpaid‚ÄĚ in some way, which could include receiving a freebie, AND (2) they are under some form of editorial ‚Äúcontrol‚ÄĚ by the brand. What are your thoughts on this? Do you think most people are aware of the ‚Äúcontrol‚ÄĚ aspect? Do you think it matters?

I have so many thoughts on this! Firstly, I think disclosure is incredibly important. We’re in an age now where not only are audiences incredibly savvy but they’re also somewhat skeptical. It’s so important to be completely honest about their gifted items, paid campaigns, free trips and so on. Especially in an age where we are just feeling terrible and comparing ourselves to everything we see online.

I’m not sure how much the general public knows how much control a brand has over content. Often it can be very clear and sometimes it doesn’t look authentic to that influencer, so it can be a bit obvious. Other times, the brand might gift the influencer a product without any expectation for them to post, so it ends up just fitting in naturally.

The control aspect is key. If a brand gifts you an item, but then expects you to post on a certain day or see content before it goes live – then this is sponsored content. Even if you haven’t been paid for it, and that must be made clear to your audience.¬†The guidelines are in place to protect consumers, which I appreciate.

You mention “gifting” by brands. Is the distinction between ‚Äúpaying‚ÄĚ and ‚Äúgifting‚ÄĚ a product an important one to make? If so, why?

To me, yes. The two mean completely different things in my mind – when something is paid, I think of brand control, I think of money exchanging hands, and contracts signed.¬†Gifted items and freebies although have monetary value, should be made clear in a different way. I do prefer to know that an influencer hasn’t purchased that product with their own money, for example, or didn’t pay for that holiday.

Something I hear often from colleagues and friends is that advertising on social media is ‚Äúobvious enough,‚ÄĚ and that consumers don‚Äôt need the #ad hashtag or similar disclaimers. As a general rule, do you think bloggers and influencers are actually clear and transparent enough? Is there sufficient self-regulation? Or were the regulators right to step in with new rules?

There are definitely #ads and #sponcon that are extremely obvious with their advertising messaging and aren’t being declared as such – but I don’t think that should matter.¬†The regulators are absolutely right to step in with new rules and best practice. I also think there’s been a real effort from bloggers and influencers to declare ads, but there are still a select few (including celebrities and reality stars) getting away with not doing it.

What do you think some of the biggest concerns influencers and bloggers have with making it clear that adverts are indeed adverts? Aesthetics? Independence? Credibility?

I think fatigue? I think there are a lot of consumers who feel like they are constantly being advertised to, but we spend so much time on our phones, our laptops and social media now that advertising is just becoming more obvious. It’s always been there in TV, radio and print!

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But at least for me, a lot of the bloggers that I followed before they were known as influencers, I followed them because I liked them as people (or their online personas), so I understand it can be jarring to see an ad thrown in with their regular content. But I enjoy supporting them still because I feel like I’ve been on that journey with them.

If you could speak to the advertising regulators directly and tell them one key thing about this issue, what would it be?

I do think a lot of the declaration can feel excessive, which does cause people to have to say ‚ÄúThis isn’t an ad, I just love X‚ÄĚ. My main issue has been the distinction between a gifted item as payment, especially as there can be a lot of influencers who receive gifted product and declaring it as an ‘ad’ or as ‘sponsored’ to me as a consumer, means something else entirely.

Finally, what have been the most challenging and rewarding things about running your own fashion and lifestyle blog thus far? What is something you hope to accomplish or participate in over the next few months?

The most challenging thing is time! I still work full-time in talent/influencer strategy, so that is my 9-5 job. Having to run my blog during evenings and weekends can be pretty tiring but also I just wish I could do more!

The most rewarding by miles and miles are the friendships I’ve made through blogging, that is what I cherish the most and is what keeps me coming back to create more content! Being able to speak to people all over the world is just a joy.

I hope to be able to get my life in order and continue to post consistently! Anything I can do to write more would be ideal, so hopefully some more freelance opportunities, or even speaking opportunities as well!

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Many thanks to Nicole for sharing her time, expertise and insight with me for this interview! You can follow her at The-Noteworthy.com, on Instagram at @NicoleOcran, and on Twitter @NicoleOcran

The MPRE: my experience sitting the American legal ethics exam as an English lawyer

The MPRE: my experience sitting the American legal ethics exam as an English lawyer

The Multi-state¬†Professional Responsibility Exam, or ‚Äúethics exam‚ÄĚ (MRPE)¬†is one of three exams required in order to practice law in an American state (more on that here). Having just taken the exam, here are my thoughts as an English-trained solicitor currently practicing in London.¬†

ūüĆü¬†UPDATE: I passed the exam! I exceeded the score I needed for California.

For more information on how the United States and English legal systems compare, read my post “Lawyering in America and England”.¬†

Introduction to the MPRE

The MPRE tests a prospective lawyer’s understanding of professional ethics regulation in the United States. The questions are based on the Model Rules of Professional Conduct (MRPC).¬†The MPRE is a 60-item (50 scored questions and 10 non-scored questions), two-hour multiple-choice examination administered three times each year at established test centers across the country. You must pass the MPRE before you can be admitted to practice in the United States, but you can take it¬†anytime after completing their first year of law school (including after sitting the bar exam itself).

I chose to sit the exam in New York City because: 1) it’s easiest to get to from London and 2) my husband works for a NY headquartered company, so he was able to meet up with colleagues while we were there. My score will be sent to my jurisdiction of choice, which happens to be California.

One Pace Plaza
I took the exam at Pace University in Manhattan. My only complaint was that the individual desks were really tiny, but other than that, it was a good test day experience. 

Test day

On the morning of the exam, I woke up at about 5AM: this was due to still being on “London time” and somewhat jet-lagged! I bought some coffee and brought it back to the hotel room, and spent about an hour doing some last minute cursory revision.

At 8AM, I walked the three blocks to the testing centre at Pace University. The reporting time was at 8:15, and there was already a massive queue of students and prospective lawyers outside. We were held in the queue for about 30 minutes, and I enjoyed chatting to a few people about our various career stages. I even spoke to a young guy who was resitting the exam after failing it previously. It’s important to maintain some perspective: failing isn’t the end of the world!

At 8:45AM we began to stream into the building, where people were turned away for having backpacks (the rules clearly state NO BAGS). At one point a test invigilator said, “if you have cellphones, don’t tell me about them! Just make sure they’re turned off and hidden away!” Phones, like bags, are also forbidden – but I suppose there was a slightly more lenient approach to having them on this occasion.

We then went through the process of having our admission tickets checked against our ID, and sent into our testing rooms. At Pace, we sat in small classrooms with about 20 people per room: there wasn’t any assigned seating, it was simply done on a first-come, first-seated basis.

By 9AM, everyone in my room was seated and the door was closed. The invigilator read instructions about the exam, and we had a few minutes to fill out the various bubbles with our names and other bits of information. At 9:10AM we were permitted to break open the seal of our papers and begin.

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The day before the exam, I spent a few hours studying in the famous Rose Reading Room at the New York Public Library

Preparation

I probably invested about 50 hours in studying for the MPRE over the course of two months. That time also includes “passive studying,” such as listening to MPRE lectures while on the tube, for example.

  • I first familiarised myself with the subject matter breakdown of the exam itself, available here on the NCBE website.
  • I listened to and read the BarMax lectures, which are free for the MPRE.
  • I did a¬†lot of practice questions, using BarMax as well as AmeriBar.
  • I read through the MRPCs on the ABA website.
  • I identified which questions were tripping me up and what Rule they related to. I then read the explanatory comments for those particular rules, also available on the ABA website.
  • I read through all of the test day instructions at least one week prior to the exam itself, so I knew exactly where to go and what to bring (for example, a passport photo in addition to ID!)

Final thoughts and tips

  • Do¬†focus your energies on practice questions when studying! This exam is not about understanding the theory or philosophy of professional ethics. You will not be writing essays about the merits of client confidentiality!
  • Do¬†review the commentary for rules that you want more clarity on. The commentary is far less vague than the rules, and often includes practical examples.
  • Do not underestimate this exam. Especially as a foreign lawyer, I found some of the rules a bit counter intuitive. Don’t be tempted to cram the night before: I strongly recommend dedicating 20 hours to studying for this exam if you’re an American law student, and more if you’re a foreign lawyer.
  • Do¬†feel free to contact LSAC ahead of time at¬†MPREinfo@LSAC.org¬†if you have questions, including questions about test center assignments. I originally registered to take the exam in Seattle but then changed my mind. LSAC staff were very helpful and the change only took one email to initiate.
  • Do not bother trying to memorise the rules!
  • Do not worry about drinking too much coffee on the morning of the exam. You will have plenty of opportunities to use the toilet – at least I did at my centre!
  • Do¬†manage your time. You will have two minutes per question. Some questions only took me 20 seconds to answer. My advice? Go through the exam answering everything you can on a first pass. If you come across anything that requires a bit of contemplation, write the question number down on the test booklet, and return to it later. When you go through the exam for a second time, cross off the difficult questions from your earlier list.
  • Do not be afraid to guess, if for whatever reason you can’t come up with the answer. There are no penalties for wrong answers, so just give it your best shot!

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From stealing to kneeling, what do NFL player contracts say about “bad” behavior?

From stealing to kneeling, what do NFL player contracts say about “bad” behavior?

Three times each year, two professional American football teams journey across the pond to play against each other in the NFL London Games. This weekend however, four players from the Jacksonville Jaguars made headlines for something they did off the field. They were arrested under suspicion of fraud by false representation for attempting to leave a nightclub without paying the £50,000 ($64,000) bar tab.

According to¬†ProFootball Talk,¬†expensive bottles of champagne and vodka were sent to the players‚Äô table. They thought someone else was paying, and were surprised to learn that they were expected to pay. The bill was settled hours after the arrest, and the players were released with no further action taken by police.¬†“There was definitely a misunderstanding,” said Barry Church, one of the players arrested. “We handled it as a private matter within the team, and we’ll just go from there.”

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Despite their fame and talent, at the end of the day, professional athletes are capable of making mistakes just like the rest of us. But unlike the rest of us, sports stars are often contractually obligated to maintain a positive reputation.

The NFL has had a formal policy addressing off-field conduct since 1997. The current 2014¬†Personal Conduct Policy¬†prohibits physical violence, illegal possession of a gun or drugs, and cruelty to animals – remember Michael Vick and his dogfighting?¬†But the policy also prohibits anything¬†“that undermines or puts at risk the integrity of and public confidence in the NFL.” Even if a player’s conduct does not result in a criminal conviction, the NFL can impose fines, suspension, or even banishment from the league.

In addition to the NFL Policy, individual player contracts also contain “morality clauses.” Also known as a ‚Äúmoral turpitude clause‚ÄĚ or ‚Äúbad boy clause”, this permits an employer to end the contractual relationship if the employee’s conduct breaches the moral expectations laid out in the employment or endorsement agreement.¬†For my overview of the¬†history and use of morality clauses more generally, see¬†Morality Clauses in Talent Contracts.

The 2012¬†contract¬†between Arian Foster (“Player”) and the Houston Texans (“Club”) is available online thanks to a (fascinating) IPO filing with the Securities and Exchange Commission. Clauses regarding Foster’s behaviour and conduct included:

  • Player agrees to give his best efforts and loyalty to the Club, and to conduct himself on and off the field with appropriate recognition of the fact that the success of professional football depends largely on public respect for and approval of those associated with the game.¬†
  • If at any time, in the sole judgement of Club, Player has engaged in personal conduct reasonably judged by Club to adversely affect or reflect on Club, then Club may terminate this contract.
  • Player recognizes the detriment to the League and professional football that would result from impairment of public confidence in the integrity and good character of NFL players.

“Meaning Transference” and marketing magic

You might be wondering why a football team should care about the off-field behaviour of its players. As long as the guy can run the ball or block a tackle, who cares if he’s arrested for trying to skip out on a bar tab. Right? Wrong.

Consider for a moment the amount of money teams and companies invest in employment contracts and endorsement agreements. By way of example, Russell Wilson earned $2 million during his first three seasons with the Seattle Seahawks. In 2015, the Hawks rewarded their quarterback with a renewed contract worth nearly $90 million. Wilson also gets $10 million a year from his deals with Bose, Nike, and Alaska Airlines. On the other side of the country, the New York Giants’ wide receiver Odell Beckham Jr is earning about¬†$10 million over four years. But the real kicker is that Nike recently signed him for the biggest shoe endorsement ever, worth $25 million over five years.

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“Seattle’s hometown airline” Alaska Airlines “couldn’t be more proud of Seattle’s football hero, Russell Wilson.” Thanks to Wilson’s impressive skill and wholesome image, they even made him their CFO! Chief Football Officer, that is.

Meaning Transference is a social theory which posits consumers “transfer” the perceived ideals, credibility and reputation of celebrities to the associated product or service being sold (Grant McCracken). Because negative perceptions can also transfer, a company will want to distance themselves if a celebrity behaves badly.¬†Essentially, morality clauses protect the team or company‚Äôs public image from the athlete‚Äôs potential scandals. In practice, this could mean suspending or terminating the contract, which could cost the athlete thousands – or potentially millions – of dollars.

The crux of any morality clause is how the “bad behaviour” is defined. Does a player kneeling during the American national anthem¬†adversely affect the image of the NFL?

Given today’s heated political climate, it’s no surprise that professional athletes are increasingly voicing – or otherwise demonstrating – their opinions on social issues. In 2016, Colin Kaepernick of the San Fransisco 49’s started the trend of protesting police brutality and racial inequality, by kneeling during the national anthem at the start of games. Other players soon joined in, much to the ire of many football fans and prominent figures, including President Trump.¬†That same year, Kaepernick was deemed the most hated player in the NFL.

Speaking to The Washington Post,¬†constitutional law Professor Fred Smith Jr. described the anthem debate as a “clash of values which has become a very fraught issue in the American political imagination.‚Ä̬†The NFL reacted to the situation by announcing a new policy in May of this year:¬†players must either stand for the national anthem on the field or wait in the locker room. The policy was then shut down by the NFL’s labour union (NFLPA) only two months later.

As the NFL and the NFLPA continue to negotiate, ‚Äúno new rules relating to the anthem will be issued or enforced‚ÄĚ. However, introduction of the new rules in the first place demonstrates that the NFL is at least attempting to mitigate the perception that it is an unpatriotic organisation. It could be argued that from the NFL’s perspective, it is the result of the public‚Äôs perception that matters, and not the conduct itself.¬†

In spite of the furor and uproar, Nike made a risky decision in September to¬†feature Colin Kaepernick¬†in an advertising campaign. Despite some backlash and boycotts, the move paid off handsomely overall: Nike received¬†valuable free publicity, and online sales and stock price skyrocketed. In this way, Kaepernick’s kneeling is both detrimental to one organisation (the NFL), as well as highly profitable for another (Nike).

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Nike released a controversial commercial featuring Colin Kaepernick, which hints at the embroilment over NFL players kneeling during the American national anthem.

Ultimately, it is critical to understand that morality clauses attempt to regulate something that is continually in flux.¬†Opponents of morality clauses worry that the definition of what constitutes “immoral” or damaging activity could be too broad and subject to abuse by the employer. Smart sports stars and their lawyers will therefore do well to ensure that morality clauses are carefully negotiated and written precisely in order to protect their position – and their paycheques.

NDAs and the Sound of Silence

NDAs and the Sound of Silence

‚ÄúWhen truth is replaced by silence, the silence is a lie.‚Ä̬†
‚Äē Yevgeny Yevtushenko

The #MeToo movement has brought Non-Disclosure Agreements (NDAs) as a way to silence allegations of sexual harassment into the public debate.  In light of controversies surrounding Donald Trump, Harvey Weinstein and now РSir Philip Green, the billionaire retailer whose brands include Topshop Рmuch has been discussed about the legality and morality of using NDAs to prevent publicity or otherwise cover up  bad behaviour.

But like any legal document, NDAs are not inherently “good” or “bad”. They are simply¬†a tool, regularly used by lawyers in many contexts. To understand why they have become controversial, and to contribute to the debate concerning their use and abuse, we must first consider their structure and purpose.

NDAs,¬†which are also called Confidentiality Agreements, are simply a type of contract used¬†to prevent someone from sharing confidential information in ways which are unacceptable or damaging to another person.¬†What information is considered “confidential” depends very much on the situation, as well as the relationship between the person providing the information (“discloser“) and the person receiving it (“recipient“).

Use of the word “confidential” to mean “intended to be treated as private” dates from the 1770s, and has its roots in the¬†Latin word¬†confidentia. This means “firmly trusting,” and is itself derived from confidere,¬†which means¬†“to have full trust or reliance.”¬†

Confidential information is often shared for a business purpose or in corporate negotiations, especially when mergers or collaborations occur. For example, a restaurant chain looking for a deal with a food manufacturer may want to share recipes, or a fashion designer may seek a partnership with a well-known athlete who has sketches and drawings of a sports-inspired clothing range. Likewise, when a company hires a new employee, they may be given access to company client lists, manufacturing processes or other valuable data.

The basic anatomy of the NDA is relatively straight forward, and should always contain the following elements:

  • A clear definition of the confidential information.
    These are often heavily negotiated clauses, and it is usual to have very wordy and detailed definitions which set out explicitly what is and is not captured by the agreement. Sometimes, even the NDA itself is considered “confidential information,” which means that its terms or existence must be kept secret.The discloser will often want a broad definition of confidential information which covers not only the documents or products in question, but perhaps any derivative ideas, feedback, analysis or concepts created or inspired by the confidential information. On the other hand, the receiving party will want to keep this definition as narrow as possible.

 

  • The key obligation to keep the information secret.
    Standard wording will typically begin as follows: “In return for the discloser making confidential information available to the recipient, the recipient promises to the discloser that it shall keep the confidential information secret and confidential.”However, the obligation clause almost always contains many more rules and responsibilities. For example, the recipient may be prohibited from even indirectly sharing or hinting at the confidential information. They may also be prohibited from making copies, removing the information from a particular location, or storing it on their personal smartphone.

 

  • The ways in which the information can be used.
    The recipient will be prohibited from using or exploiting the confidential information except for the “purpose.” The purpose is the defined reason the information will be shared in the first place, for example, “to establish a collaboration in respect of the Tommy Hilfiger x Lewis Hamilton fashion line.”Disclosures of the information by the recipient to their employees and professional advisers (including lawyers and accountants) are usually permitted. In such cases, the discloser may ask that all individuals who receive the confidential information from the recipient sign a separate confidentiality agreement. While some may consider this a bit over the top, it makes sense from the discloser’s perspective that the receiver should take responsibility if its employees or advisers breach confidentiality.

 

  • What happens if the project or deal does not go ahead, and the duration of the secrecy.
    The discloser will often ask that the receiver returns or destroys the confidential information if the project or transaction fails to materialise. The parties should also establish a realistic time period for the duration of the secrecy, as it may be unreasonable to expect that the information has to remain confidential for eternity.
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Lilly Panholzer for City finds it is easy to silence women with NDAs

Seems simple enough, so what’s all the fuss about?

As mentioned above, NDAs are incredibly common and used in a wide variety of situations, ranging from complex corporate takeovers to short-term collaborations. But despite their ubiquitous nature and seemingly straightforward terms, it would be a mistake to assume that these are simple contracts. 

It is rare for the parties entering the agreement to have perfectly equal bargaining power. Due to an imbalance of money, expertise, resources or even reputation, one of the parties involved will almost always be able to exert more influence over the other. This inherent imbalance can lead to the creation of NDAs which grant Рor limit Рrights in an unfair or improper way.

Entrepreneurs may think that an NDA adequately protects their valuable information when it is divulged to a potential investor. But unless the definitions and obligations are sufficiently locked down, little may prevent the investor from stealing the entrepreneur’s ideas.

Similarly, some¬†unscrupulous companies may attempt to force their employees to enter into NDAs in an attempt to prevent whistleblowing or discrimination lawsuits. Matters can become very complex when an individual who has a grievance against a powerful boss is threatened with dismissal or further harassment, unless they sign an NDA.¬†Moreover, a new common extension of NDAs is the inclusion of a “non-disparagement” clause. This goes beyond the protection of confidential information, and requires employees to never speak negatively about their employer or former employer.

In both the United States and the United Kingdom, lawmakers and courts have begun to establish clearer boundaries about the enforceable scope of NDAs. In the court of public opinion, powerful individuals who weaponise NDAs in an attempt to stifle access to justice, impair free speech and limit creativity are already losing. Regardless of the reason for entering a NDA, you owe it to yourself to ensure the document is checked first by a lawyer, and that your rights Рand remedies Рare adequately protected.