Employment Law 101, Hollywood Edition, Part II: No Clowning Around

by Greenberg Glusker Fields Claman & Machtinger LLP

For the most part, employment law may appear to lack the glitz and glamour of the entertainment legal issues we usually cover here at Law Law Land.  But what the field might miss in star-studded premieres and ritzy award shows, it more than makes up for in amazingly entertaining fact patterns involving fascinating forms of employee misbehavior.  And sometimes, just sometimes, the wacky world of California employment law intersects with the wacky world we call Hollywood.  Today’s case-in-point involves an entertainment company, a complaining employee with a colorful nickname for his boss, a termination, and — of course — a lawsuit.

Rewind for a moment to 2008 — a year in which America said goodbye to Heath Ledger, hello to Barack Obama, and, depending on one’s political persuasion “You betcha” or “Dear God why?” to Sarah Palin.  And that year, our plaintiff, Andrew McDonald, was a creative director at a visual post-production studio called RIOT.  Defendant Ascent Media Group subsequently merged RIOT with Method Studios, after which Method Studios’ creative director Alex Frisch was named director of creative visual effects and became McDonald’s boss.  Then things got interesting.

While in talks with AMG in 2009 regarding a lucrative deal to become executive creative director, McDonald raised concerns about his new boss, Frisch — specifically, that he was allegedly known to regularly use drugs, including on the job.  In fact, the lawsuit lists one of Frisch’s alleged nicknames as “Cokey the Clown, Our Fearless Leader.”  (Another of his nicknames was “Power Donut Man.”  Fun fact, via Google:  according to GQ, the term “Power Donut” apparently has nothing to do with drugs, but rather, refers to “that ring of unshaved hair that clings to a balding man’s pate.”)

In response, McDonald was allegedly told not to undermine Frisch, since AMG had spent a lot of money on the merger.   When asked whether he had any proof of Frisch’s alleged drug use, McDonald “jokingly” asked if AMG’s Vice President of Operations wanted McDonald to videotape the bathroom.  And sure enough, the next day, McDonald was terminated for videotaping the bathroom.  Cue lawsuit (trial scheduled to begin on September 4).  Naturally, McDonald vehemently denies ever videotaping the bathroom, Cokey — er, Frisch — vehemently denies having engaged in drug use, and I vehemently deny thinking this would make an excellent episode of The Office (and at least one of the people on that list is lying).

The case offers a helpful (and colorful) sampler of some of the most common issues that arise in wrongful termination suits.  For example, McDonald tried to pursue a claim under California’s “whistleblower” statute, found in Labor Code section 1102.5.  Under this statute, an employer may not make any rules or regulations prohibiting an employee from disclosing information to the government that the employee believes are a violation of law; an employer may not retaliate against an employee for disclosing a violation of law to the government; and an employer may not retaliate against an employee for failing to participate in an activity that violates the law.  (Doubtful whether any state legislator contemplated that the statute would be applied to a case involving “Cokey the Clown.”)  Here, McDonald does not appear to have alleged that he actually “blew the whistle” to the government or law enforcement, or that anyone tried to get him to participate in illegal activity on the job (unlike the somewhat more colorful fact pattern from my last installment of Employment Law 101, Hollywood Edition).  And so, ahead of trial, the court correctly dismissed his statutory whistleblower claim on summary judgment (lawyer-speak for “please toss out this bogus case and don’t let a jury decide it!”).

But even without a statutory violation, what remains for trial is the ubiquitous common law claim for “wrongful termination in violation of public policy.”  This claim, a favorite of plaintiffs’ attorneys, will require McDonald to establish five elements: (1) an employer-employee relationship between AMG and himself; (2) that AMG terminated McDonald’s employment or took other adverse employment action; (3) that a “nexus” exists between McDonald’s termination and some protected activity, such that the termination violates public policy; (4) that the termination was a legal cause of damage to McDonald; and (5) the nature and the extent of his damage.

It seems obvious enough that McDonald was an employee, was fired, and lost out on a bunch of money as a result, so the real action in the case will focus on the third element:  whether there is a nexus between McDonald’s termination and any protected activity.  This, in turn, raises two sub-issues:  first, was McDonald’s activity “protected” and, if so, was there a causal link between his activity and the termination?

AMG tried to toss McDonald’s case by arguing that there was no way McDonald could establish either protected activity or a nexus between the activity and his termination, but the judge disagreed on both counts.  With respect to the protected activity, AMG argued that Frisch’s alleged drug use was not a general health and safety concern.  But the judge looked to allegations that “Frisch was in an agitated state and booted a wastebasket across the room, and on another occasion he acted aggressively at a meeting.”  (Just in case people don’t already have that impression of the entertainment industry from TV…)

With respect to the link between McDonald’s complaints and his termination, AMG argued that his first complaint occurred months before his termination and that others voiced similar concerns and weren’t fired.  But the judge allowed the case to proceed to the jury, based on the coincidental timing of the firing being only one day after McDonald’s meeting where he raised the issue again.  Of course, this doesn’t mean that a jury will necessarily find for McDonald, but McDonald will have an opportunity to present his case.

For AMG’s part, it will be important to show evidence that the real reason McDonald was terminated was the reason AMG provided — i.e., his surveillance of the men’s bathroom.  To make its ideal case, AMG should:  (1) produce copies of its employee handbooks or other company policies (although AMG doesn’t need to feel bad if the handbook doesn’t have a section that explicitly bans videotaping bathrooms); (2) offer evidence of the footage that McDonald allegedly captured, in order to show the extent to which he committed a violation of company policy by intruding on others’ privacy (finally, a lawsuit the jury will be able to actually stay awake for!); and (3) present evidence that McDonald was counseled, in response to his “offer” to videotape the bathroom, that such action would be inappropriate.

Even though most employers probably don’t think about the need to expressly ban things like bathroom surveillance, AMG may soon find that, whether or not an employer believes there may be a lawsuit on the horizon, it’s always good to dot all the I’s and cross all the T’s on the front-end, just in case a dispute ever arises.  When it comes to employment law — even, or maybe especially, in the wacky world of Hollywood — there’s no room for “clown”ing around.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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