“Bachelor” Show Contracts: Is a $5 million Penalty for Violating a Confidentiality Clause Enforceable?

I took some time over the weekend to explore some of “Reality Steve’s” earlier videos on YouTube and I stumbled upon the 5-part Celebrity Side Dish Interview with Reality Steve from August 2010. I initially thought it was one of his prior video blogs given the way it visually appears onscreen until I actually played the videos.

Given my interest in the “Bachelor” producers’ extortionate lawsuit against Reality Steve, I found several portions of the video interview both informative and interesting. What I found of particular interest was Carbone’s references to a “$5 million lawsuit” threat and a “confidentiality agreement”. I seem to recall him making references to these in his prior blog posts.

There is also mention of those items in the recent “Bachelor” producers lawsuit Complaint against Reality Steve, numbered paragraph 15 (under General Allegations), where it quotes one of Carbone’s alleged emails stating:

 “Let me just say, I’m very well aware of your contract. I also know that over 500 contestants have been on this show and not one of them has ever been sued for the $5 million. It’s just a scare tactic.”

The Plaintiffs, in numbered paragraph 11, state to the Court that all show participants, employees, and staff members must sign a contract that that contains confidentiality clauses and provisions.

“All past, current, and future participants in the Bachelor Series sign contracts with Plaintiffs that require them to maintain the confidentiality of all events that transpire on the Bachelor Series episodes prior their broadcast. Each member of the Bachelor Series’ cast and crew, as well as certain other employees, also sign contracts with confidentiality clauses that prevent them from divulging non-public information about any aspect of the episodes prior to their broadcast.”

Given these collective references by both Carbone and the “Bachelor” producers, I asked myself the question: Is the alleged $5 million penalty for violating a confidentiality clause within the “Bachelor” shows contracts truly enforceable?

In a phone conversation days earlier concerning the Reality Steve lawsuit, my friend and business associate, New York attorney Oscar Michelen made a passing comment that the “$5 million penalty is unenforceable.” Because we were focused on another aspect of the lawsuit Complaint, I didn’t follow up on that comment. However, his passing comment stuck in my mind.

Yesterday, I called Oscar and hit him point blank, “What did you mean by your comment that the $5 million penalty is unenforceable? Why is it unenforceable?

Because of our limited time and the fact that we had no copy of any “Bachelor” show contracts to read and review, we could only come up with some basic assumptions, analysis, and conclusions.

(Disclaimer: By no means what I write should be construed as legal advice for ANYONE. It is simply meant to be a basis of discussion over a hypothetical legal matter.)

First, the “Bachelor” contracts for its participants and contestants (except the show lead) do not appear to be employment contracts such as those that might be signed by actual non-talent employees.  According to Carbone’s prior blog comments, all show participants and contestants (except the show lead) do not get paid. They are freely “volunteering” their time to the “Bachelor” shows although the lodging, meals, beverages, props, supplies, travel, and other items used by show contestants are paid for by the production company.

I bring this up to point out the fact that potential liabilities and damages for not following through on stated responsibilities (such as keeping show “secrets” and NOT discussing non-public information) by non-paid show contestants would be less than those of paid employees or paid talent (such as the show lead) might have.

For example:  recent “Bachelor” Ben Flajnik (paid talent and show lead) would likely have a greater liability for violating confidentiality clauses than contestants Courtney and Lindzi who were non-paid contestants. Similarly, prior “Bachelor/Bachelorette” show leads Ashley, Brad, Ali, Jake, Jillian, Jason, Deanna, etc. all carry a greater weight of responsibility regarding violating confidentiality clauses than the multitudes of non-paid contestants eliminated over past seasons.

Second, there is a high likelihood that the “Bachelor” show contracts would be found to be an Adhesion Contract (Contract of Adhesion).

The Cornell University Law School defines an Adhesion Contract (Contract of Adhesion) as:

A standard form contract drafted by one party (usually a business with stronger bargaining power) and signed by the weaker party (usually a consumer in need of goods or services), who must adhere to the contract and therefore does not have the power to negotiate or modify the terms of the contract. Adhesion contracts are commonly used for matters involving insurance, leases, deeds, mortgages, automobile purchases, and other forms of consumer credit. Also known as adhesive contract; adhesory contract; adhesionary contract; take-it-or-leave-it contract; leonine contract.

Courts carefully scrutinize adhesion contracts and sometimes void certain provisions because of the possibility of unequal bargaining power, unfairness, and unconscionability. Factoring into such decisions include the nature of the assent, the possibility of unfair surprise, lack of notice, unequal bargaining power, and substantive unfairness. Courts often use the “doctrine of reasonable expectations” as a justification for invalidating parts or all of an adhesion contract: the weaker party will not be held to adhere to contract terms that are beyond what the weaker party would have reasonably expected from the contract, even if what he or she reasonably expected was outside the strict letter of agreement.

Nolo’s Plain-English Law Dictionary defines an Adhesion Contract (Contract of Adhesion) as:

A contract that so strongly favors one party or so unfairly restricts another, that it creates a presumption that one party had no choice when entering into it. If a court determines that the contract is overly unfair, it may refuse to enforce the agreement against the disadvantaged party. An example of a contract of adhesion might be a form contract provided by an unethical leasing company. Adhesion contracts are often evidenced by the comparative strength of the parties– for example, a giant corporation as compared to an average citizen.

How about the example of a big, multi-million dollar Hollywood production company compared to a non-paid show contestant who left their home and job to be part of a reality show?

There is certainly no doubt in my mind that “Bachelor” producers present a “take it or leave it” proposition to potential and interested show contestants. For show contestants, there is not much negotiation power considering  “Bachelor” producers literally have hundreds of people to choose from who would gladly sign anything just to be on a reality show. Unpaid show contestants (those subject to elimination) either sign “The Contract” with the alleged $5 million penalty clause to maintain confidentiality or they don’t get on the show. It’s that simple.

An adhesion contract does not automatically mean the entire contract and all its clauses become unenforceable. It simply means that disproportionate or overly unfair clauses such as a $5 million penalty would likely be unenforceable.

Because the $5 million penalty would likely be ruled as unfair and disproportionate, the Courts would likely ask the plaintiff to prove their case and show actual damages caused. They would likely take into account and consider the relative importance, nature, and actual impact of the information being revealed to the general viewing audience, not simply a niche online audience interested in spoilers.

Most of the “secret” things Carbone reports on regarding the internal workings of the “Bachelor” shows are probably not so secret in the world of Hollywood and reality shows. From what I know, show business is an incestuous business where everyone knows everyone and there are few secrets to those “in the business”.

In a Court, there would likely be a “so what?” attitude regarding most of the trivial operational and logistical aspects of the show such as how they choose contestants, how eliminations work, how travel destinations are decided, how much money is paid to people, storyboarding, ITM interviews, etc.  The trivia is interesting and fun for fans to learn about but probably meaningless in the scope of determining actual, measurable damages.

Even if direct revealing of confidential information related to the precise and specific disclosure of every actual event and outcome of an entire season were to occur, the plaintiffs would still have a very difficult job to prove actual, measurable damages caused by them such as a significant drop in ratings/viewership or advertisers canceling their ads.

Quite simply, there have been no cases of “spoiling” of any kind that have actually made a material and measurable impact on ratings and viewership. The only so-called “damage” that I can see is the huge embarrassment factor for the management team running a sloppy show operation.  If they want absolute secrecy, hire more security, stay on closed sets on closed lots, and stop farming out work to third-party contractors.  Do all the work with in-house employees and most of their problems will be solved.

I agree with Carbone on one of his assertions that if a lawsuit were filed on any show contestant, it would immediately become a public matter generating news coverage.  I think maybe even a bit more so than the Reality Steve lawsuit. Remember, a lawsuit is public information and anyone has access to court filings. That is how I got my nose into all of this.

The exception to this is if the plaintiffs were to make a motion to seal the documents, testimony, and the like. Regardless, it would be difficult to seal the ENTIRE case unlike divorce cases which are understood to be highly personal matters involving personal finances and minor children. Divorce cases frequently get sealed but we aren’t discussing a domestic legal case either.

Very few judges would likely view a multi-million dollar Hollywood lawsuit against a lowly, show contestant as a matter of secrecy. In fact, I find it difficult that any judge would seal any documents of such a trivial case. After all, we are not talking about corporate espionage or matters of national security. We are discussing what sort of information lowly, unpaid show contestant could possible squeal about to bring an entire show to its financial knees and cause financial harm.

Essentially, ABC Network would have to drop the “Bachelor” reality shows, advertisers would have to pull out, or ratings and viewership would have to drop significantly. Frankly, ABC Network is in the money-making business and would not likely do anything unless ratings and viewership dropped significantly. To attribute a significant drop in viewership or ratings to any loose-lipped, non-paid show contestant or a one-man entertainment blogger from Texas will be a difficult job indeed.

Ultimately, given my limited research and analysis, I must say I agree with Carbone that the alleged $5 million penalty is a scare tactic that is largely unenforceable. If a multi-million dollar lawsuit were filed by the “Bachelor” producers, it would be an intimidation tactic to “teach someone a lesson” and to meat-grind the defendant down by making them incur expensive legal fees to defend the case. The vindictive and punishment lawsuit would probably cause some eye-rolls and the plaintiffs a huge amount of unfavorable PR and publicity trying to financially ruin and meat-grind down a lowly, unpaid show contestant.

 Last thing, I would love to see a copy of the “Bachelor” show contract and do a legal analysis of it. I don’t want to know who you are. All I care is about the contract. The best way to ensure absolute anonymity is to make sure you redact your name and all identifying information and FAX it to 888-696-3441.

You should also read Attorney Oscar Michelen’s article: Penalty Provisions in Reality TV Contracts – Fair or Unenforceable?

(BONUS COMMENTARY: This is most certainly NOT legal advice! Read and understand at your own peril!)

In case anyone cares what I would do given what I know and how I interpret the law (which is enough to be very dangerous to myself! LOL!), I would almost prefer to have a $5 million judgment against me than a $50,000 one simply because I view a $50,000 judgment as payable within a lifetime but not a $5 million one. If I am going to declare bankruptcy, it would be embarrassing for me to do so over a “small” amount. But I would NOT be embarrassed to declare and file bankruptcy over a $5 million judgment from Hollywood. In fact, I would probably talk it up and brag about it!

If I thought I might have to spend a ton of money (over several thousand to tens of thousands of dollars) to defend a case, I would probably file a court answer of some kind to go on the record of my position, make some motions to fight it a bit, but ultimately let them win a default judgment if it became too expensive. Once the default judgment was in place, I would pay $1,500 to a bankruptcy attorney to file Chapter 7 and clear that judgment and all my personal debts away in one fell swoop then move on with my life unencumbered.

 

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