Wednesday, November 9, 2022

Writer Tip #37: Non-Disclosure/Non-Disparagement Agreements

Remember the #MeToo Movement? Kinda made a big splash in Hollywood a few years back. Elsewhere, too.

As the press, legal commentators and social justice warriors everywhere processed the true revolting scope of the scandal, one thing became abundantly clear to everyone: The monsters in Hollywood, sexual or otherwise, only managed to avoid the repercussions of their actions for as long as they did because of the ruthless use of Non-Disclosure Agreements.

NDAs were declared unethical tools of repression. It was agreed no just person should use them. Everyone in Hollywood cheered. Justice had come at last....

Well, not everyone cheered. Some folks began thinking: Those Non-Disclosure Agreements sound like a pretty good deal. What worked for Harvey Weinstein  -- for a while anyway -- could work for me too.

I don't know what the official criterion is for "entering" the film business. My first feature was produced in 2003. However, I personally put my entry in 1992 when I got my first real agent. That's thirty years. Prior to the #MeToo movement, I had only been asked to sign a non-disclosure agreement once. Here's the story.

Around the time my third film was being shot, my former partner and I were approached by a director about writing a script for him. We were familiar with him and we were delighted to have a chance to work with him. He said he could tell us all about the story, which was based on a life-story he had already acquired, after we signed a non-disclosure agreement.

He emailed us the agreement. We were aghast. The document was quite onerous. If I remember correctly, it even mentioned a penalty amount ($100,000) if we discussed the project in an unauthorized manner. My partner and I weren't inclined to sign the agreement, and I called the director and said so.

I asked why he even thought such an agreement was necessary. It was a life story and he had already secured the rights. It isn't like we could steal it. He was apologetic. He said he had hired a lawyer to set up the paperwork for the project and this was one of the many documents he provided. I told him the agreement was outrageous. The terms were so vague that I could lose my house if I accidently talked in my sleep and my wife heard it. The director said he would redo the agreement and send it back to us. He never did. 

My partner and I didn't get the assignment. And we never lost a minute of sleep over it.

That was the last non-disclosure agreement I saw until recently. Now, every document that crosses my desk has one. And it's not just me. Other screenwriters seek my advice periodically. Non-disclosure agreements have been showing up in their contracts as well. It's a thing now.

I don't like it.

First, if they include a non-disclosure agreement in an option or a purchase agreement, they are not treating you like a professional. They'd get laughed in their faces if they sent an NDA to a member of the WGA. As a union member, you are required to submit all employment contracts to the union. Therefore, a non-disclosure agreement is a non-starter. This is one of the reasons why, after fourteen produced features, I am WGA or Bust on all projects from here on out. I'm tired of having to deal with BS like this. 

Secondly, I doubt the producer or production company adds a NDA because the contract is good. Trust me, if they were sending you a good, generous deal, they'd want you to go around bragging about it.  They'd send out a press release to the trades. No. To me, a non-disclosure agreement is a definite warning sign. Sometimes they even tell you what they're afraid of. Check out this non-disclosure agreement on a contract I recently rejected:

"Each of the Parties hereto do agree to maintain as private and confidential the terms of this Agreement. If any inquiry is made by a third party concerning this Agreement, each Party hereto shall disclose no more than that the matter has been amicably resolved to its satisfaction pursuant to a confidential termination and release agreement. In the event that any Party hereto is served with process to compel the production of any documents concerning either this Agreement, each Party hereto agrees to immediately notify the other Party of the service, so that said Party may object and resist the production of this Agreement as a confidential and privileged document. Each Party further agrees to give notice to the other Party in the event it is served with applicable process."

In other words, if I receive a summons in a criminal or civil case regarding something pertinent to the agreement, I have to share it with the company -- perhaps tipping them off to potential legal action -- and they still get to determine whether I can speak in the matter. As someone who had to testify for seven brutal hours in a lawsuit simply as a witness, I find that clause unethical. It would have been ridiculous -- and patently unjust -- if I had been unable to say anything but "I am legally unable to answer that question." When I see a clause like that, it makes me wonder how many times they've been sued.

Another non disclosure agreement a friend of mine recently shared with me in a script option allowed him to speak freely if they were summoned to speak in a legal proceeding. That, at least, was a nod in the direction of ethics.

Then there's the Non-Disparagement Clauses. What's up with them?

They're even more insane.

They're not included to protect the producers or production companies from libel. Libel is against the law. The legal system has already provided remedies to libel. They're not included to protect the producers or production companies from slander either. Once again, there are existing laws against slander and proscribed penalties.

Non-Disparagement Clauses exist instead to prevent you from telling THE TRUTH about the producers and production companies. That's right. Why else include one? The people who include these clauses must know from past experience that left to their own devices, their business associates would say bad things about them. The natural human response to disparagement would be to treat people well so that such clauses are unnecessary. However, if you want to treat people like garbage without having to worry about your reputation, non disparagement clauses were made for you.

Count me out.

I have been offered a few contracts with non-disclosure and non-disparagement agreements and I have said no. I left money on the table, and I do not regret it. I can't say I will never sign a contract again with a non-disclosure and non-disparagement clauses. I might, but I will be suspicious of the deal. I'm no lawyer, but to me those clauses are a red flag that I'm about to get screwed.

Your experiences might be different than mine. Leave a comment below and tell me if you signed a contract with those clauses and everything worked out well. Be sure to leave all of the details....

Ooops. That's right.

You can't.

Beware.

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