ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Thursday, April 24, 2008

"Family Guy" Writers Sue Fox

Familyguyfamilypromo According to the Hollywood Reporter, Seth MacFarlane and 15 other writers of the animated sitcom "Family Guy" are suing 20th Century Fox TV,alleging breach of contract and other claims.  The writers allege that Fox has violated its contract with the writers by not paying them for 12 minutes of additional footage based on a script they wrote for a 2005 'Family Guy" DVD. They also allege that Fox failed to give them proper credit for the project. 

The Hollywood Reporter says that Fox would not comment on the law suit.  Not on record, perhaps.  Off the record, Fox's spokesperson said, "Twelve minutes of guys shaving off their strike beards is not remunerable.  Wait, wait.  'Remunerable' won't work as a laugh line.  How about this: Those guys probably couldn't even see through their strike beards to read the terms of the contract they signed.  They've got nothing!  Yeah, go with that, but off the record, okay?"

[Jeremy Telman]

April 24, 2008 in In the News | Permalink | Comments (0) | TrackBack (0)

Senate to Employees: You're on Your Own

In Ledbetter v. Goodyear Tire & Rubber Co., the Supreme Court ruled, in a 5-4 decision, that Title VII required that a plaintiff allege that defendant acted with discriminatory intent in making adverse pay decisions during the 180 days prior to the filling of a complaint with the Equal Employment Opportunity Commission (EEOC).

Lilly Ledbetter was employed as a manager by Goodyear from 1979-1998.  Initially she was paid the same as her male counterparts, but over time her pay slipped until she was paid significantly less than the lowest-paid male manager.  A jury rejected Goodyear's claim that it had non-discriminatory reasons for the pay disparity and awarded Ledbetter back pay.  The Eleventh Circuit reversed, finding that the allegedly discriminatory conduct had occurred prior to the 180-day window dating from the time of Ledbetter's complaint to the EEOC.  Justice Alito, writing for the majority, agreed, based on the statutory language and precedent.

Ledbetter and the dissent made policy arguments in favor of a more lenient rule.  Because employees are not entitled to know what their peers are being paid and because pay discrimination only occurs in slow imcrements that have a cumulative effect, Ledbetter argued that the 180 window should be expanded.  Justice Alito would not address those arguments, saying the court's role was simply to apply the statute as written.

The decision was thus, in effect, a remand back to Congress to clarify its legislative intent.  It attempted to do so through the Lilly Ledbetter Fair Pay Act of 2007, which effectively overrules Ledbetter and which passed the House by a vote of 225-199.  But the Act will not come to a vote in the Senate because it failed to win the 60 votes necessary to overcome Senate procedural rules.  Candidates Clinton and Obama returned to Washington to speak in favor of the Act and to cast their votes.  Candidate McCain remained on the campaign trail, but according to the New York Times, he said "he would have opposed the bill since it could contribute to frivolous lawsuits harmful to businesses."  Senator Hatch further explained the motives of the all but six Republican Senators who opposed the Act:  “The only ones who will see an increase in pay are some of the trial lawyers who bring the cases.”

So, employees who want to protect themselves against pay discrimination will have to negotiate harder during those oh-so-even-handed discussions they have with their employers when they take their positions.  Ms. Ledbetter, for example, after nearly 20 years in a supervisory position with Goodyear, was making nearly $45,000 a year.  With such princely resources at her disposal, imagine her bargaining power!

[Jeremy Telman]

April 24, 2008 in Commentary, In the News | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 22, 2008

Handwritten Letter of Intent Worth $10.5 Million

According to Newsday.com, a jury has awarded $10.5 million to internet executive Alfred West in his suit to enforce a handwritten agrement with IDT Corp.  According to the report, West met with IDT founder and chairman Howard S. Jonas on February 3, 2001.  The product of this meeting was two pages handwritten by Jonas which contained the terms of a deal in which West would develop a business within IDT.  The terms of the deal were as follows:

The deal called for an annual salary of $200,000 for five years, and an annual payment on Feb. 13 for the next five years of 70,000 shares and $1.5 million, which they estimated was worth "roughly" $14.3 million. The deal called for an annual salary of $200,000 for five years, and an annual payment on Feb. 13 for the next five years of 70,000 shares and $1.5 million, which they estimated was worth "roughly" $14.3 million.

Crucially, the handwritten agreement also contained the following langauge: "The parties will complete formal contracts as soon as possible but this is binding."

West was fired after six months at IDT.  His suit resulted in a 2005 jury verdict in his favor for $1.5 million.  The Third Circuit vacated that verdict and remanded, while reinstating West's breach of contract claim, which had been dismissed by the district court.  The second trial worked out even better for Mr. West, but IDT has promised a second appeal.

[Jeremy Telman]

April 22, 2008 in In the News, Recent Cases | Permalink | Comments (2) | TrackBack (0)

Monday, April 21, 2008

Breaking 19th-Century News

Tampa National Public Radio reports that a 77-year-old Tampa woman is suing the city for its failure to repay a $300 loan made by her great-grandfather to the City of Tampa during the Civil War.  Assuming 147 years of interest at 8% per annum, the plaintiff figures she is owed $23 million. 

The past is passed, says Tampa (pictured), citing the statute of limitations, the demise of the currency in which plaintiff's great-grandfather was to be paid, and Section 4 of the 14th Amendment to the U.S. Constitution. Tampa also notes that the City of Tampa that incurred the debt dissolved in bankruptcy.  The current City of Tampa was founded years later.   

[Jeremy Telman]

April 21, 2008 in In the News | Permalink | Comments (0) | TrackBack (0)

There's No Crying in Baseball Contracting

Troytulowitzki Portfolio.com reports here on the death of mega-contracts in baseball.  Yes, we're thinking of you, Troy Tulowitzki (pictured), and also of Evan Longoria.  These are two young baseball players who signed rich but not jaw-dropping contracts with their teams either as rookies or after one year. 

This blog has suggested elsewhere that agreeing to pay any 42-year-old player nearly $30 million a year might be irrational.  Portfolio.com suggests the same, as the average player peaks at age 26.  Rational ball clubs thus offer reasonable multi-year contracts to very young players with huge potential, hoping to avoid having to pay them eye-popping contracts for post-prime years.

But nobody will walk away from the negotiating table crying.  Mr. Longoria negotiated a deal that will pay him $17.5 million over the next six years.  At the time he signed, he had played six games in the major leagues.  Tulowitzki will get over $5 million a year over a six-year period, but he had already proved himself last year as a rookie.  These contracts may seem rich, but with what you pay Tulowitzki to play every day for a full season you can barely get Roger Clemens to sit on the bench four games out of five for a month.

[Jeremy Telman]

April 21, 2008 in Celebrity Contracts, In the News | Permalink | Comments (1) | TrackBack (0)

Sunday, April 20, 2008

Bear Market for Job Seekers

The New York Times reports that JP Morgan has notified new Bear Stearns hires that they will not be needed.  But the unemployed recruits can still keep what the Times calls a consolation prize -- they can keep their signing bonuses if they sign contracts in which they agree not to sue JP Morgan over their lost jobs.  The bonuses range from $10,000 for college seniors to $50,000 for newly-minted MBAs.  According to the Times, the students were paid these signing bonuses last fall, and JP Morgan is threatening to demand their return if the students refuse to sign the new contracts. 

[Jeremy Telman]

April 20, 2008 in In the News, Labor Contracts | Permalink | Comments (0) | TrackBack (0)