Contract Clause Comes Under Fire   

Broadcast executives fear removing the noncompete provision could cost them talent.

A new law in Massa-chusetts and a court decision in New York have radio and TV executives around the nation concerned about efforts to ban their "noncompete" clauses.

The clause has been a staple of the industry for years, primarily in contracts with anchors and reporters. Generally, it prohibits an employee leaving the station from taking a job with a competitor in the same city or region. Terms vary, depending on individual circumstances.

Broadcast managers look at the noncompete clause almost as an insurance policy. They say managers nurture, promote and help popularize on-air talent, and the clause acts as a covenant to protect their investment. Anchors and reporters usually don't like the clause, though they understand why it's there. Technically, sometimes they are supposed to be paid more because of it.

"Noncompetes favor management and restrict the employee from testing his or her worth in the open market," says Rick Gevers, a former news director turned agent who represents dozens of reporters and anchors. "The anchor or reporter has little choice but to sign, in most cases, although the length is open to negotiation. In some places, it is written into the contract that a specific amount of money is for the noncompete."

Stations have gone to court to enforce the clause and usually have won. But now the American Federation of Television and Radio Artists, which represents many of the country's electronic journalists, is trying to have the clause banned by state laws. Late last year, the union succeeded in getting a law passed in Massa-chusetts that bars noncompete clauses in future contracts. AFTRA says it intends to pursue similar laws in other states; one is pending in New Jersey, where there is only one major commercial TV station.

Philip Roberts, executive director of the New Jersey Broadcasters Association, calls the proposal in his state anti-business. "If this would become law in New Jersey, it would preclude any broadcasting entity from locating here," he says.

Roberts is also president of the Broadcast Executive Directors Association, an umbrella organization of the country's state broadcasting associations. He says all the state associations intend to fight noncompete legislation.

"Most people realize broadcasting is a highly competitive business, and a broadcasting facility invests a lot of money in advertising expenses to promote..talent and in training," he says. "This type of legislation would be devastating."

The noncompete clause also is getting scrutiny because of a court decision last summer in Albany, New York. When WTEN-TV tried to stop its weekend anchorwoman, Sue Nigra, from taking a prime weekday anchor job for almost double her pay at cross-town rival WRGB, she sued to invalidate her noncompete requirement and won. A New York Supreme Court justice called the clause restricting Nigra's options unfair.

Some observers say Nigra's situation weakens industry executives' arguments in favor of noncompetes. Nigra, who grew up near Albany, started at the station as a secretary, worked her way up and didn't want to leave the area. Though the station offered to increase her pay as a weekend anchor, it had no openings for a weekday anchor.

Others counter that Nigra signed the contract and, thus, had given her word.

"If someone is browbeaten into signing a noncompete or it's filled with loopholes in the employer's favor, then it's not a freely made promise and shouldn't bind them," says Joe Donovan, a morning anchor at WWJ, the all-news radio station in Detroit.

"But you also should keep your word," adds the 31-year veteran. "My feeling is that in broadcasting, you possess only two real assets: your talent and your reputation."

The decision in Albany is limited in the precedent it set, even for New York state. "There are differing opinions from lawyers as to what this really means," says Loren Tobia, news director at WTVH in Syracuse. "It certainly draws into question what you have in your own contracts and what other people have that you're trying to hire. As you look at contracts, you now ask yourself if this can really be upheld in court. And maybe instead of a noncompete, you get other protections, such as a financial penalty clause or a buyout."

Paul Machesky, a onetime TV newsman and now a Detroit attorney specializing in employment and labor litigation, says lawyers arguing against noncompete clauses would likely cite the Massachusetts law "as evidence of a trend away from the noncompete." Machesky says they also could point to the New York decision, telling a judge, " 'You should rule this way, because their laws are similar to ours.' "

The bottom line, says broadcast agent Gevers, is just compensation.

"What I really want is fairness," he insists, "and noncompetes just aren't fair."