From Weinstein to Trump: What Happens When We Torch NDAs

Lawyer Nick Rozansky says a public educated in gag orders means “you can potentially avoid them”

Harvey Weinstein Donald Trump

On Monday, The Weinstein Company shocked Hollywood by releasing both Harvey Weinstein’s accusers and any witnesses to his misconduct from their binding nondisclosure agreements — otherwise known as NDAs or gag orders.

But the unprecedented move leaves us with questions about the advantages, if any, accusers may now have, or how the move might affect the company’s ongoing civil, criminal and bankruptcy proceedings.

For answers,TheWrap spoke with lawyer and NDA expert Nick Rozansky, partner at Brutzkus Gubner. And while the discussion focused mainly on TWC’s decision to free Weinstein’s accusers from any remaining legal constraints, the expert tells us it could even have bearing on the Donald Trump-Stormy Daniels scandal.

[Disclaimer: Rozansky is an expert, but has no specific knowledge of legal documents drafted by or entered into at TWC.]

TheWrap: Bob Weinstein saying all nondisclosure agreements for accusers of and witnesses to Harvey Weinstein’s misconduct would “end,” or no longer prevent people from speaking out, was shocking. Is it that easy?  An email saying “go ahead”? 

Nick Rozansky: It depends. If the contract is between Harvey Weinstein and the alleged victim, then it’s Harvey Weinstein’s to waive or not waive. If the contract is with the company, and he is no longer a part of the company, it’s different. The rights really belong to the company.

For instance, if you and I were to enter into a contract that said this conversation could never be released, that’s something that I would own. My firm could not decide to waive that. But if the agreement was between my firm and you, and my firm decided to waive it, [they could].

It certainly sounds like they have NDAs with the company. They might not be specific to these assault types of claims, they may just be general NDAs about the general goings-on at the company. The question I would have is whether they are specific to this situation, and I would doubt that they are.

Does this declaration dissolve the agreements or in some way prohibit TWC from suing if someone comes forward? Could it also block anyone from pursuing repayment of compensation they gave people to stay quiet? 

Potentially all of the above. If they’re saying they’re going to waive the NDAs — often times, an NDA is a separate agreement between an employer and an employe as part of a settlement. If they’re talking about this waiver and the NDA is a standalone agreement, that’s it.

Let’ s say, for instance, that Harvey Weinstein has a settlement with Victim A. The victim is accusing him of assault, battery and as part of the settlement Harvey Weinstein is paying the victim $100,000 in connection to that assault. As part of the settlement, there is also confidentiality and a nondisclosure agreement. But the payment is still for damages related to the assault and battery, not just for the NDA. I would think the other portions of the agreement are still in place.

What bearing would it have on civil, criminal and bankruptcy court proceedings to empower accusers and witnesses to speak? 

On the civil side, it’s problematic for him. If there are civil cases that are otherwise in trouble because there are witnesses that can’t testify because they are bound by NDAs — now they can testify. That poses a huge problem for [Harvey]. On the criminal side, it’s hard to imagine that will be anything but harmful for him. Same thing on the bankruptcy side. All claims are helped by the gutting of these NDAs. It is a pretty big gesture by the Weinstein Company, assuming that it’s the holder of the rights of the NDA.

You can rarely read a story about Harvey without mention of his enemies. Could opportunistic business partners leverage this somehow in their Weinstein Company NDAs that aren’t connected to abuse? 

It’s hard to know, the stories in Hollywood are pretty legendary with regard to producers and agents and managers and their conduct in the office. God knows what it is they’re referring to — is that going to create leverage against the Weinstein Company? I doubt it. What are they going to say, they were somehow damaged by abuse that they witnessed?

It’s probably a stretch. I would doubt that the witnesses they’re referring to are business partners, but it’s possible. It’s hard to know without seeing the documents. Usually, when I see an NDA between a company and an individual, it’s not someone you’re doing business with.

Does this compromise the nature of NDAs overall? Will the contracts evolve or will people pivot to other methods for confidentiality? 

NDAs are what they are — they’re contractual, and people can take money in order to not speak. But you have this going on now in Weinstein case and the Stormy Daniels case, people are either being released, offering money back to get out of them, and so forth. This is really the first time I can remember that the subject of nondisclosure in the news. I don’t know if it’ll weaken [the contracts], but you certainly have a more educated public, about what they mean and the fact that people can potentially avoid them.

In the Stormy Daniels case, they’re going to try to litigate in federal court. If Trump has his way, it’ll be litigated in federal court and then arbitration, and we’ll see how it plays out. That could have some precedential value toward NDAs.