Supposedly, there are several people who have worked for Donald Trump who settled various issues with him in the past with the signing of non-disclosure agreements. This is also true of people who settled with Harvey Weinstein. Apparently, there are, say, unflattering matters that these people would be able to reveal about their former bosses, but they have signed these documents promising to not do so. What are the penalties for violating these contracts? Is there a financial penalty? Would they have to give up what they “won”? Is jail time a possibility? What keeps this potentially important information away from the public?
You can be sued in civil court. The liability may or may not be spelled out in the agreement. The plaintiff might have to prove damages, not merely that the agreement was violated (IANAL).
It is not a crime. No jail time.
Hypothetically, if a special prosecutor were to issue you a subpoena to testify before a grand jury, I believe that you may have to testify despite the NDA. But you have to notify the other party to the NDA so that they can try to quash the subpoena.
I wonder if this has anything to do with why special prosecutors empanel grand juries so early in the process.
I don’t know what happens if a Congressional committee issues a subpoena to you.
Law doer here: One of the big things we learned in first year contracts is that contracts are “amoral”. That is, there is no legal opprobrium for breaching a contract: you are limited to the damages specified in the contract. The “economic loss rule” says the same thing: basically, where two parties entered an agreement, damages arising from the agreement are generally limited to what was negotiated.
Thus, there is a concept of the “efficient breach”, where you stand to gain more financially from reneging on a deal than you do from continuing with it, and it therefore makes sense to breach the contract. As I understand it, the penalty for violating the NDA relating to Trump and outtakes from the Apprentice is $5 million. In theory, a person who was offered more than $5 million to expose the videos should have no compunction about disclosing.
But (a) does the offended(?) party have to demonstrate $5M in damages to collect? and (b) does this debt disappear in bankruptcy?
I’m surprised to see Ivana doing the book and press conference bit now. IIRC reading that Trump’s divorce settlements tend to include a NDA. (Which is typical for most celebrities. Domestic employees and support staff for most Hollywood types apparently have the same clauses. )
IANAL but it seems to me that no contract can override your legal obligation to give testimony in a criminal court case. If so, it would seem the very thought of threatening damages for testifying would be witness tampering.
Just a WAG here, but I would imagine that someone from, say, The Apprentice, who owns some video outtakes that would be at the very least embarrassing to he who won’t be named (and who apparently can’t be embarrassed, either) could crowd-source the amount of money needed to cover whatever was originally negotiated. Don’t you suppose that there are at least a million people interested enough to pony up their $5? That’s why I’m so perplexed that so little information has come out. There’s money to be made there.
No. Liquidated damages clauses exist for the sole purpose of ensuring the non-breaching party doesn’t have to prove loss. So long as the liquidated damages are not so severe as to become a penalty clause - basically, if the damages are a plausible measure of the nonbreaching party’s loss - a court will enforce the breaching party’s obligations.
Let’s say I hire you to be my private hairdresser. My hair, for various professional reasons, is extremely important to me, and I need to have a skilled stylist available 24-7. You agree to be available for some exorbitant annual fee. Because my hair is so important (showing up on Good Morning America with split ends would be the end of my career!), and because I am absolutely relying on your promise to be available, I insist on liquidated damages.
Absent that clause, I would be limited to my economic loss from your failure to show up to do my hair - the proceeds of a cancelled concert tour, for example. But the deeper damage to my career is incalculable.
I can’t insist on liquidated damages of $1 billion if I’m only paying you $1 million, because then it’s clearly a penalty clause. But I can insist on say, $1 million.
TV producer here. If there are really incriminating/embarrassing clips, they may have been erased from the tape or the digital media deleted. I saw that happen once–it was pretty harmless, one crew member taped another taking a whiz (with the whizzer’s consent) but it offended one of the editors, and so that part of the tape was wiped. I have also heard stories about other shows wiping some offensive content by the cast (not specifically The Apprentice though).
Getting footage that may still exist and is sitting in Mark Burnette’s (metaphorical) vault would be close to impossible. If the raw footage was saved it’s probably in long-term tape storage, so you’d have to restore many, many hours of footage to a usable/outputtable format just to track down a few clips. That is something that’s going to be noticed and is a firing offense (never mind the NDA). Sure, most of Hollywood hates Trump, but you also just demonstrated that you can’t be trusted to keep a secret.
When the footage is actively being worked on, it’s much easier to walk clips out of house without being noticed–just a question of dragging and dropping files onto a DVD or hard drive. At that point it’s pretty easy to pass the files to an intermediary to make them available and (hopefully) preserve your anonymity. But we haven’t seen this material, which is why I think it must never have happened because no one wanted to risk their job and their future jobs over Trump being a jerk.
Or, maybe, Trump was a perfect gentleman at all times :rolleyes:
Along the same lines, how valid is a non-disclosure settlement, if the terms require that someone perjure themselves? I’ve been reading that some of Weinstein’s accusers were required to issue affidavits stating that no misconduct occurred, as part of settlement agreements. IF there were crimes committed, and IF the victim agreed to take cash in exchange for not pressing charges and to signing an affidavit that nothing happened, and IF the victim later changed their mind and went public with their account of the crimes, would the settlement be considered broken? Could Weinstein demand his money back and/or sue the victim?
You’re into Cosby territory here.
Prosecutor declined to press charges in Constand case. He then testified in civil case, which had a NDA. He should have plead the Fifth if there was any expectation that that testimony could be used against him 11+ years later in a criminal trial.
Especially with his net worth & what he could afford in lawyers, there was a huge breakdown somewhere for that one to come back & bite him. (Note: I’m in no way defending the Cos, just saying it’s screwed up that supposed confidential testimony can later be used against him.)
Was it an NDA? I thought he testified based on the oral promise of a DA to not prosecute him - a promise that ended up being worth the paper it was written on.
While the NDAs in the OP may be civil, it is possible to have an NDA based on EAR99/ITAR/Export Control related information. Violation of that NDA can land your ass in federal prison.
https://www.bis.doc.gov/index.php/regulations/export-administration-regulations-ear/14-policy-guidance/deemed-export
Not exactly the same thing? If I commit a criminal offense and then pay the victim or a witness to not disclose it - presumably I can do what I want in that regard. Harvey did. But… if the victim then responds to police questions, or is called as a witness - presumably at that point any threat to make them pay a penalty for telling legally compelled testimony (or to not obstruct an investigation?) is effectively witness tampering. What’s the difference between telling someone “you say what happens and it will cost you $1M” versus “You tell what happened and my associate Greedo will break your legs”.
And, as I understand it, any contract that requires someone to violate the law (i.e. refuse to testify) is invalid.
You are correct. But Weinstein can pay people to refuse to disclose details other than under subpoena/court order.