What is a Celebrity NDA?
A celebrity confidentiality agreement is a legal document between a celebrity and the people hired by the celebrity, such as public relations representatives, an attorney, management, or any teams hired to do work for the celebrity. These documents broadly encompass many types of agreements, such as those to keep confidential the dealings of the person or company hiring the professional. The confidentiality agreement is considered an "ironclad" in the industry. However, it can become a major legal issue if a breach occurs after these professionals leave employment and are no longer bound by the confidentiality agreement.
The confidentiality agreement states that the hired professional (attorneys, managers, public relations representatives, etc.) will be held accountable for any damages with respect to information disclosed in the agreement. A common breach of this type of agreement occurs when a former employee makes what would have been considered private information available to the public. Whether the information released was done intentionally or inadvertently, a breach of contract occurs .
Confidentiality agreements may also be used by people entering into a romantic relationship to limit the disclosing of personal, private, or sensitive information during the relationship and after the relationship has ended. They may also be used with confidential matters, such as financial matters.
There are several elements to a celebrity confidentiality agreement, which include the parties entering into the agreement, the scope of the provisions, and the duration of the agreement. This will specifically outline that the parties will keep the other person’s information private and confidential. It will also include the scope of the agreement, how broad the agreement is, and the duration. The duration can last for as long as the parties choose.
While a confidentiality contract can cover a wide range of elements, it is most commonly used to protect the privacy and finances of a celebrity. If a celebrity’s personal or professional matters were to become known to the public, it could significantly impact them both professionally and personally. Gaining back trust from the public and one’s previous employee can take years, and potentially harm a celebrity financially and emotionally. Celebrities often need these agreements to provide privacy.
Celebrity Non-Disclosure Agreements: Key Provisions
Celebrity non-disclosure agreements (NDAs) and confidentiality agreements typically contain four key clauses, as follows:
1. Non-Disclosure Obligations
These clauses outline the obligations of the signatory against disclosure of confidential information to any third party. The obligation not to disclose is usually ongoing, meaning that it continues even after the termination of a relationship. Any disclosure of confidential information that is made by the signatory’s agents or representatives will also render the signatory in breach of the terms of the agreement.
2. Duration
Celebrity NDAs and confidentiality agreements usually have a fixed duration in relation to the obligations of the signatory not to disclose confidential information. This is often reduced to a minimum period per any request of the disclosing party. This clause is important to include to ensure that confidential information provided by the disclosing party does not remain confidential for an indefinite time period when it is no longer commercially sensitive. It is not unusual for this fixed period to be a minimum of five years, due to the natural shelf life of confidential information – for example, product development cycles, or the standard framework for underwriting blockbuster films.
3. Scope of Information Covered
Generally, the parties to a celebrity NDA will agree a broad definition of the term "confidential information", including both written and oral information, such as information disclosed in phone conversations. However, with more onerous clauses, the disclosing party may seek to agree a narrower definition of confidential information, so as to protect intellectual property and trade secrets. For example, a list of specific information that would be considered confidential, for example, content details, plot lines and other documents shared with the other party in connection with a film project. This type of clause is more likely where the celebrity is not a party to any vertical supplier contract, and therefore the disclosure of content information may lead to more potential harm to an intellectual property joint venture than the disclosure of other information.
4. Return of Confidential Information
The parties to a celebrity NDA or confidentiality agreement should agree what will happen to the relevant confidential information at the end of a relevant information exchange, i.e. whether the information must be returned to the disclosing party after the relevant project has been completed.
Celebrity NDAs: What the Law Allows
The enforceability of confidentiality agreements has a sound basis in contract law. At its most basic level, using a confidentiality agreement, sometimes called a "non-disclosure agreement," "NDA," or "CDA" can help to reduce or eliminate the risk that confidential information will be used or disclosed without permission to undesirable third parties. When needed, as discussed below, confidentiality agreements can also help to protect against potential liability in infringement cases or other disputes. Confidentiality agreements can do both of these things and remain an important part of the business side of the entertainment industry. The value of using these kinds of contracts to manage information and protect brand assets is easily seen in the usage of them by nearly all major film as well as music studios and by talent, agents, and managers.
Confidentiality agreements have historically been used primarily in inhibiting disclosures or proper uses of trade secrets developed in the course of employment. Generally, companies and other parties can require signing a confidentiality agreement as a condition of or during employment, but, as with any other contract, confidentiality agreements must be enforced in accordance with applicable law. Under the California Labor Code, for example, an employer may not prevent an employee from disclosing any of the following: Any provision of a confidentiality agreement that prevents the disclosure of information will be void and unenforceable if it would prevent an employee from disclosing "information in direct violation of a court order to the contrary." Because sometimes a court orders that a party not disclose confidential information, the Labor Code applies the stated standard as the relevant one to determining confidentiality agreement issues. This is a limitation on the potential enforcement power of any confidentiality agreement, with California courts also having ruled that certain conditions can reduce the ability of employers to enforce confidentiality agreements. First, California courts have ruled that confidentiality agreements cannot be overly broad in applying to information that is not confidential when the agreement is signed. Second, California courts have held that confidentiality agreements can themselves be unenforceable and illegal if the agreement would act to suppress the truth, such as in sexual harassment cases.
As recognized by California state courts in the 1997 case of High Tech Pet Products, Inc. v. Walling, the standard test for determining whether a confidentiality provision in a contract is enforceable is whether the provision is expressly covered by a trade secrecy or unfair practices statute. Because California courts prefer to analyze confidentiality agreements using the interests of either the California Uniform Trade Secrets Act (CUTSA) or the Unfair Practices Act, the state courts have ruled that parties cannot use contractual provisions to keep information secret that is not covered by statutory protections for trade secrets or other unlawful activities.
The introduction of the California Transparency in Supply Chains Act in 2011 (SB 657) and its first reporting date in 2012, however, may also offer new supportive grounds for the enforcement of confidentiality agreements that protect the general anti-trafficking language and concerns in that statute. As amended, Section 1714.43 of the Civil Code allows for a contracting party to have a cause of action against another party for a knowingly false representation made in a required disclosure under the California Transparency in Supply Chains Act. The fraudulent inducement or known false statement with respect to an SAS disclosure that a party may have should be enforceable, as the intent of the 2011 California Transparency in Supply Chains Act is to hold parties accountable. Parties in California can now agree to an interpretation of this statute that allows businesses to clarify the kinds of prohibited conduct. With this in mind, it is recommended, as far as the California Transparency in Supply Chains Act may be interpreted in the future, to require and include in confidentiality provisions or other confidentiality agreements prohibitions on false statements in connection with the information being protected.
Celebrities Enforcing NDAs: A Look at Some Noteworthy Cases
In the high-stakes realm of celebrity news and gossip, breaches of confidentiality agreements (NDAs) have recently exposed several high-profile cases garnering significant media attention. In September 2018, actress Olivia Munn revealed that actor Jeremy Piven had violated his non-disclosure agreement by spreading rumors about a sexual assault allegation she filed against him. Her agreement to keep the matter confidential was effectively undone when he spoke about the case to numerous press outlets and outlets such as The Newsroom, in which he stars. As a result, Piven has reportedly lost out on a starring role in an upcoming NBC sitcom. In mid-January 2019, The New York Times reported that comedian Louis C.K. breached a confidentiality agreement over an alleged "indecent proposal" made to his victims. The Times report revealed details of his alleged misconduct, including his solicitation of oral sex from two actresses by asking, "Will you do [oral sex]?" – in other words, asking the actresses to perform oral sex on him. In 2018, The Times published a statement from C.K. who claimed that any "sexual activity I have participated in" was consensual and that his conduct had been "misrepresented." On the political front, in July 2019, the White House pressed former aides to President Donald Trump to sign NDAs before they left their positions. Former aides contacted by the Trump administration reportedly received letters warning them that their access to confidential and sensitive information meant that they were "subject to various legal obligations, including…confinement and return of material" and strict limitations on their communication with the media and press. In addition, in January 2019, it was reported that Michael Avenatti, the lawyer for Stormy Daniels, pending federal indictment for extortion, allegedly is under investigation for a suspected breach of her NDA. An unnamed source claims to have met with Daniels and Avenatti to discuss the alleged NDA breach with prosecutors. While these cases undoubtedly make for great tabloid fodder and news headlines, these breaches will be used as precedent for future litigation. The precedents set in these cases will likely indicate how spicy the gossip will get and set the legal standard for how NDAs are invoked and enforced in the media space in the future.
Writing an Effective Celebrity Non-Disclosure Agreement
A well-drafted celebrity confidentiality agreement ensures parties are protected against the unapproved use of non-public information after the business relationship ends. An airtight celebrity NDA not only protects celebrities, but it also protects intermediaries (e.g., attorneys, managers, publishers) who could also be privy to this sensitive information. While each celebrity confidentiality agreement is unique, there are a number of factors discussed below that are common to strong NDAs.
Clear Definitions
For any confidentiality agreement, it is essential that all defined terms be clearly set forth. A clear definition of a signatory’s "confidential information" should include things like:
Scope of the Confidentiality Obligation
The NDA should also carefully define the scope of confidentiality obligations, particularly in setting forth what activities will be considered a breach of the agreement. A breach may occur if a person covered by the NDA uses or disseminates any confidential information without the consent of the disclosing party or permits any person under his or her control to do so. The NDA should also state that knowledge of the confidential information creates an obligation of confidentiality , and that the obligation of confidentiality continues after the NDA is executed, regardless of the termination of the employment/agency relationship.
Disclosure to Third Parties
Celebrity NDAs typically provide that confidential information may only be disclosed to third parties who have a legal or contractual obligation to maintain the same level of confidentiality as provided by the NDA (e.g., by keeping the information secret and confidential) and only for the purposes set forth in the agreement.
Non-Disparagement
A good celebrity confidentiality agreement will make it equally as important for the celebrity and other parties to a confidential transaction to protect the confidential nature of the information, as well as to avoid making derogatory statements and/or opinions concerning it.
Recourse for Breach
Most celebrity NDAs provide that, in addition to all other rights and remedies, the non-breaching party shall be entitled to equitable relief (e.g., injunctive or specific performance). In the entertainment context, the parties often agree that the subject matter of the NDA is of a special and unique character, and that the non-breaching party shall be entitled to seek specific performance or injunctive relief.
The Consequences of Celebrity NDA Violations
Breach of a confidentiality agreement, commonly known as confidentiality or nondisclosure agreement (NDA), is a serious legal issue that can lead to significant consequences for the parties involved. In practice, a breach of a celebrity confidentiality agreement can lead to legal action and public scrutiny for the individual who violated the contract.
Legal Penalties
In the event of a breach, legal remedies may be pursued through negotiations and settlement agreements to compensate the affected parties for all damages. If no resolution is reached, the parties may bring forth the matter to court. The legal remedies for violation of a confidentiality agreement are civil, not criminal, in nature. Legal actions may include a lawsuit for breach of contract and a potential injunction against the disclosing party to cease and refrain from further disclosure. The legal ramifications of a breach of a confidentiality agreement differ by jurisdiction.
Penalties in California
In California, the law in California Business and Professions Code Section 16600 prohibits a nondisclosure agreement when it injures the public interest. Section 16600 states that contracts which restrain someone from exercising their profession or trade are void. This means that when an NDA of a celebrity violates public policy, the agreement may be held as unenforceable. In addition, California makes California Non-Disclosure Agreements void and unenforceable when it restricts a former employee from seeking employment or working with a competitor.
In the entertainment industry, California cases have invalidated a confidentiality agreement when the nondisclosure was deemed unreasonable and overly broad. In addition to the contract being voided, the celebrity may also face public scrutiny as they discover who leaked the information. For example, in 1998, Michael Jackson sued his attorney for $20 million for violating a confidentiality agreement. Jackson claimed that his attorney had leaked details of his financial business dealings to the press. Jackson lost and his attorney did not have to pay. In addition, any signatory of an NDA can pursue a lawsuit against a third-party which may have taken possession of the confidential information.
Impact on Reputation
In addition to the legal penalties, there is also a public and reputational risk to the individual who discloses confidential information to the public or to a private third-party. The celebrity may find themselves making headline news for breaching the confidentiality and trust that he or she has built over the years. Depending on the public’s reaction, the individual’s reputation may suffer long-term damage due to the leak. Individuals should take caution when signing a confidentiality agreement as it carries with it serious implications both legally and publicly.
In practical terms, Hollywood A-lister Jennifer Aniston suffered the consequences of a leak of her confidential information with a breakup in the public eye. Following the confidential split between Aniston and ex-husband Brad Pitt in 2005, details began to emerge in tabloids and news articles about the events leading to the split. Observing the public’s reaction to the details seemed to draw more attention to the private lives of Hollywood celebrities. Consequently, it is suggested that celebrities are mindful of which individuals have access to their confidential material.
The Role of NDAs in Celebrity Commerce
Confidentiality agreements are not only a useful way to protect your privacy if you have a high profile, but they also provide protection when you do business with your name and/or image whether that is through selling products that bear your name, being an endorsement of a product or part of a licensing deal.
Let’s suppose you are a celebrity who has been approached by the owners of a new chain of health spas about the idea of becoming not just an endorser but one of its ‘faces’ – you’ve got a line of beauty products, supplements and vitamins that the company will carry, you’ll attend openings, you’ll advertise in your own brand, you’ll be a member of the board of directors (which comes with potential duties and potential liability) and so on. There is also an executive salary on offer (perhaps a flat fee, perhaps as a share of profits). You’re not sure about the salary or the share of profits. So you have the spa owners approach your lawyer to formalize your association with them and to enter into a deal whereby you’ll be paid this week, next week, all the way up to the date of your death or 70 years after your death, whichever occurs first. Or until the spas decide they no longer need you. Because of the duties you may have under the deal, you’ll want confidentiality. As president of your own company, you don’t want any sensitive information concerning the spa to be revealed even by accident. At the same time, the owners of the spa don’t necessarily want you blabbing about how much money the spa makes or how it works, or who the new celebrity owners are going to be, because of the potential to harm their business. You’ll enter into a confidentiality agreement or, more formally, a non-disclosure agreement, or NDA, to ensure you hold that information as secrets between yourself and the spa owners, enforceable in your contract.
Cloaking Confidentiality: Celebrity NDAs Balancing Publicity and Privacy
The relationship between public and private in Celebrity NDAs can become blurred. There is certainly interest in most aspects of a celebrity’s private life, from former relationships to medical conditions to now the news of alleged sexual encounters. But the information about such private matters that draws so much attention is not generally for public consumption. There is a certain tension in that environment that is inherently difficult to manage. People are drawn to celebrities. Many people talk about celebrities as if they know them personally, or are genuinely invested in their welfare or the welfares of their families. But they don’t really know them at all.
A celebrity’s personal life is generally perceived and desired by the public to be both public and protected. Public because a celebrity has enough fame to be newsworthy, and yet private because a celebrity is entitled to privacy that every other person enjoys . The challenge presented by this tension makes it difficult for a celebrity to draw lines between matters they want to protect and those they want to share. And even when a celebrity is able to draw those lines, it doesn’t stop others from doing so on their behalf. A person who claims to know a celebrity well a times feels entitled to share their alleged insights with the rest of the world, even though the celebrity may be quite clear in their own mind about what they are or are not willing to share.
Public figures and celebrities will use NDAs to try to walk the line between, but while the confidentiality issues may be more pronounced, the underlying issues and challenges involved are not peculiar to celebrities. Every household deal with what to disclose and when. Nor are confidentiality issues in the public arena limited to celebrities. Those are broader challenges that exist in the interplay between public and private, for everyone.