WEBVTT - Actors' Strike Shuts Down Hollywood

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<v Speaker 1>This is Bloomberg Law with June Brusso from Bloomberg Radio.

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<v Speaker 2>The film and television industry has ground to a halt

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<v Speaker 2>as actors join picket lines alongside screenwriters in Hollywood's biggest

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<v Speaker 2>labor fight in more than six decades. Fran Dresher, the

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<v Speaker 2>SAG after president, said, workers across the entertainment industry are

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<v Speaker 2>being exploited.

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<v Speaker 3>We're all suffering from the threads of streaming.

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<v Speaker 1>I'm digital and AI and we must pull in the

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<v Speaker 1>reins on this wild pony.

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<v Speaker 2>Right here and now joining me is Brianna Hill, a

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<v Speaker 2>partner prior cashman. People hear, you know, the salaries of

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<v Speaker 2>movie stars, and then they see that actors are fighting

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<v Speaker 2>for better wages. Explain how the average actor is different

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<v Speaker 2>from the movie star.

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<v Speaker 4>Well, the most basic is the is the business demand.

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<v Speaker 4>But the compensation structures are different. And I would say

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<v Speaker 4>this applies to both the SAG membership and the WGA membership.

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<v Speaker 4>There are a smaller group of members at the top

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<v Speaker 4>of the compensation structure, and then there's the much larger

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<v Speaker 4>body of the membership is in the middle. So, for example,

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<v Speaker 4>a movie star is going to negotiate let's say a

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<v Speaker 4>multimillion dollar deal for a feature, whereas your average working

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<v Speaker 4>actor is going to be working at the scale rate

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<v Speaker 4>under the agreement.

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<v Speaker 2>And so they want to raise the scale rate.

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<v Speaker 4>Yes, and the AMPTP has offered an increase on the

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<v Speaker 4>scale rate. The increases that sag Aftra is asking for

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<v Speaker 4>are more than that. And I believe that the increase

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<v Speaker 4>offered by the AMPTP mirrors that which the DGA agreed

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<v Speaker 4>to in their recent agreement.

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<v Speaker 2>So the actors want eleven percent. That's much more than

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<v Speaker 2>the director's deal, which includes increases every year of the

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<v Speaker 2>contract of five percent, four percent and three point five percent.

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<v Speaker 2>The actors say that streaming has led to significantly lower residuals.

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<v Speaker 2>Tell us about the fight over residuals.

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<v Speaker 4>So for a residuals fight, the issue is it's a

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<v Speaker 4>much larger structural issue than it is just a simple

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<v Speaker 4>one of the numbers needing to be increased because prior

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<v Speaker 4>to streaming, the business model of television was different, and

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<v Speaker 4>so there was a much bigger opportunity to make more

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<v Speaker 4>money for actors. And also this carries over to the

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<v Speaker 4>writer's strike as well. In residuals and the residual structures

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<v Speaker 4>in streaming are different and the amounts are different, and

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<v Speaker 4>ultimately the move to increase the residuals is not apples

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<v Speaker 4>to apples to necessarily. The compensation structures pre streaming are explain.

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<v Speaker 2>A little bit more about how the streaming revolution has

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<v Speaker 2>affected residuals and why actors want changes.

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<v Speaker 4>So the calculations for the residuals structure with streaming are different,

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<v Speaker 4>and part of the issue is these things like residuals

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<v Speaker 4>and scale minimums can be taken in a vacuum, but

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<v Speaker 4>what they represent is overall much greater shift that results

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<v Speaker 4>in a larger cumulative impact the compensation structures in entertainment

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<v Speaker 4>more broadly, and you see similar issues in WGA strike

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<v Speaker 4>as well. And it's a difficult place to be because

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<v Speaker 4>it is on one hand understandable that the memberships would

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<v Speaker 4>want to continue to increase their compensation. On the other hand,

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<v Speaker 4>it is also difficult because the larger business has shifted

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<v Speaker 4>and involved as well, and so as the agreements come

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<v Speaker 4>up for renegotiation every few years. With the guilt, it's

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<v Speaker 4>both having to address how things are currently and where

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<v Speaker 4>the collective parties think they're going to go in the future.

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<v Speaker 2>Do you know what actors are asking for as far

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<v Speaker 2>as streaming is concerned.

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<v Speaker 4>So the residuals increase is one piece. The much bigger

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<v Speaker 4>piece from my perspective, and this is what I hear

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<v Speaker 4>from a lot of talent representatives as well, is the

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<v Speaker 4>revenue share. They're asking for a two percent of the

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<v Speaker 4>revenue share for a show to go to the performers.

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<v Speaker 4>And this is from a deal making respective. The biggest

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<v Speaker 4>issue because under the older models for television, when there

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<v Speaker 4>was a back end participation, people with back end, which

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<v Speaker 4>could be the showrunner actors would benefit from the success

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<v Speaker 4>of the show. And it was essentially a long tail participation,

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<v Speaker 4>so if a show went into syndication, if it had

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<v Speaker 4>a long life cycle, so things like Cheers, Friends, Bone Seinfeld,

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<v Speaker 4>these are all long running popular shows that resulted in

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<v Speaker 4>significant compensation for you know, some of the participants. The

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<v Speaker 4>streaming model changed that kind of compensation structure in that

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<v Speaker 4>in many cases it's what's called a cost plus or

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<v Speaker 4>a premium, and so the compensation is increased upfront, but

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<v Speaker 4>don't get the same kind of long tail, more speculative compensation,

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<v Speaker 4>so everybody is not necessarily treated the same, but the

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<v Speaker 4>upfront compensation is higher comparatively whether or not the show

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<v Speaker 4>is a success. But the flip side of that, so

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<v Speaker 4>you can have a show that's a failure and someone

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<v Speaker 4>has been paid out this agreement, or you can have

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<v Speaker 4>a show that is a huge success but there's nothing additional.

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<v Speaker 4>And so what Sag proposed is that there's a way

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<v Speaker 4>to calculate the value of each show and that actors

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<v Speaker 4>should participate in that calculated value. And I need that

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<v Speaker 4>the very polarizing topic because the value of a show,

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<v Speaker 4>it's not just direct viewership, but social media mentioned and

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<v Speaker 4>a lot of other data points. I think there's a

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<v Speaker 4>lot of disagreement in the industry in terms of how

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<v Speaker 4>that would work in a practical way.

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<v Speaker 2>So even just your attempt to describe it shows how

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<v Speaker 2>complicated and confusing it is. And then you have the

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<v Speaker 2>group presenting the studios saying that streaming isn't making money

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<v Speaker 2>yet most streaming networks.

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<v Speaker 4>Well and see. And that is a really key point

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<v Speaker 4>to the timing about this because in many ways, everyone,

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<v Speaker 4>a lot of people in entertainment have been the beneficiaries

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<v Speaker 4>of all of these streaming platforms launched. There was a

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<v Speaker 4>tremendous push for content so there's been a tremendous amount

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<v Speaker 4>of deal making in the last few years, and then

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<v Speaker 4>there are you know, there are far more writers working

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<v Speaker 4>than there used to be, So in some ways it's

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<v Speaker 4>been really good. But in the last eighteen months there

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<v Speaker 4>have been some significant resets because the reality is is

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<v Speaker 4>that the economics of launching a streaming platform that, for example,

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<v Speaker 4>a subscriber base, it's very different. And so what we've

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<v Speaker 4>seen in the last year and a half industry wide,

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<v Speaker 4>and this is both an entertainment and a tech industry issue,

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<v Speaker 4>is companies pulling back and there have been layoffs of

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<v Speaker 4>both of those industries. And I'd say almost probably every

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<v Speaker 4>studio and production company out there is looking at their

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<v Speaker 4>development spends and really looking at cutting costs. And so

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<v Speaker 4>you have this larger move towards belt tightening at the

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<v Speaker 4>studio level, and you have a situation where we have

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<v Speaker 4>the two major guilds that are on strike now asking

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<v Speaker 4>for increased compensation across all key areas. And those two

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<v Speaker 4>things are really in conflict because we are not in

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<v Speaker 4>a situation as an industry where it's just unbettered financial success.

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<v Speaker 2>Let's talk a little bit about the use of the AI,

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<v Speaker 2>which is apparently an another problem or sticking point in

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<v Speaker 2>the negotiations where does each side stand on that?

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<v Speaker 4>And there are slight differences between and between w J

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<v Speaker 4>and ZAG, So I think everyone is in agreement that

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<v Speaker 4>AI has become one of, if not the largest issue

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<v Speaker 4>currently and it is a particular concern to book writers

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<v Speaker 4>and actors because it goes to their livelihoods because it

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<v Speaker 4>can be used in ways to supplement or substitute. And

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<v Speaker 4>I do think that the TAG membership is slightly better

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<v Speaker 4>situated to find a workable model with the AMPTP in

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<v Speaker 4>the agreement because there are contractual systems in place to

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<v Speaker 4>already deal with certain approval rights and limitations over use

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<v Speaker 4>of likeness in content. So there seems to be some

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<v Speaker 4>disagreement between the two sides about to what extent they

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<v Speaker 4>are near agreement on it or not. But ultimately it

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<v Speaker 4>is such a quickly evolving space, both legally and in

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<v Speaker 4>practicality and how it can be used that I think

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<v Speaker 4>that it's also very difficult to identify how something is

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<v Speaker 4>going to evolve because the agreements are in place until

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<v Speaker 4>the next round of negotiations. Something that is going to

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<v Speaker 4>be perspective as well when it is in the world

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<v Speaker 4>being developed, so quickly.

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<v Speaker 2>Basically explain what the concern is for actors in AI,

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<v Speaker 2>what they're afraid of.

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<v Speaker 4>So they're afraid of two things. One is they're being

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<v Speaker 4>used in ways beyond, for example, one film, so they're

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<v Speaker 4>concerned about the potential of having their likeness used in

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<v Speaker 4>things outside of that and having performances attributed to them

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<v Speaker 4>that they didn't originally connect. The other issue is training.

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<v Speaker 4>They don't want what has been recorded to these just

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<v Speaker 4>to train the AI.

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<v Speaker 2>The Writer's Guild has been on strike I think since May,

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<v Speaker 2>and I don't even know if there have been negotiations lately.

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<v Speaker 2>So what are the prospects of the strike will be

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<v Speaker 2>settled within a reasonable period of time or could this

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<v Speaker 2>go on for months and months and months.

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<v Speaker 4>So my answer today is going to be different from

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<v Speaker 4>my answer a week ago. So the WGA has been

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<v Speaker 4>on strike since midnight on the first. There has, as

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<v Speaker 4>far as I'm aware, it not been any discussions with

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<v Speaker 4>the AMPTP. I think that some membership and representatives of

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<v Speaker 4>WGA have said, you know, they're ready, willing and able

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<v Speaker 4>to return to the negotiating table, and the ampp P

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<v Speaker 4>has not so. Prior to SAG going on strike, it

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<v Speaker 4>seemed likely that maybe the end of the summer would

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<v Speaker 4>be the time for the WGA agreement to be resolved.

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<v Speaker 4>So around Labor Day, everyone that back to school feeling

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<v Speaker 4>of getting back to work, because the other key timing

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<v Speaker 4>piece is the entertainment industry essentially shut down for the

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<v Speaker 4>last two weeks of the year, so usually after Thanksgiving

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<v Speaker 4>there's a big rush to get steels done, but a

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<v Speaker 4>lot of the calendaring of production and schedules is structured

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<v Speaker 4>around that. Now that SAG has gone on strike, it

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<v Speaker 4>is from my perspective, extremely unlikely that this will be

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<v Speaker 4>resolved by the end of the summer because we now

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<v Speaker 4>have two unions on strike. Everything that I have read

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<v Speaker 4>and heard for SAG, at least it's not just a

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<v Speaker 4>few issues. I think the WJA issues are narrowed down

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<v Speaker 4>more significantly. There are many more issues reportedly with the

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<v Speaker 4>SAG agreement.

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<v Speaker 2>Thanks so much for being on the show. That's Brianna Hill,

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<v Speaker 2>a partner prior Cashman.

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<v Speaker 3>The Federal Trade Commission is going to take a huge

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<v Speaker 3>step forward in banning non compete agreements that are designed

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<v Speaker 3>simply to lower people's wages. These agreements block millions of

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<v Speaker 3>retail workers, construction workers, and other working folks have taking

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<v Speaker 3>better jobs get better pay and benefits in the same field.

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<v Speaker 2>In January, President Joe Biden touted the FTC's proposal to

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<v Speaker 2>ban noncompete clauses in employment contracts, which about thirty million

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<v Speaker 2>Americans are subject to. But while the FTC's rulemaking process

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<v Speaker 2>is slow and not likely to conclude until April of

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<v Speaker 2>twenty twenty four, New York has already passed one of

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<v Speaker 2>the country's toughest bands on non compete agreements. However, as

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<v Speaker 2>the measure sits on Governor Kathy Hochel's desk awaiting her signature,

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<v Speaker 2>Wall Street is fighting back. Non Competes are particularly prominent

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<v Speaker 2>in financial firms and lobbying groups representing hundreds of firms,

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<v Speaker 2>including banks, private equity firms, law firms, retail giants, and

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<v Speaker 2>telecom companies have gone to work pushing for exceptions to

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<v Speaker 2>the bill. Joining me is labor and employment law expert

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<v Speaker 2>And Lafasso, a professor at the West Virginia University College

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<v Speaker 2>of Law, and what makes New York's.

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<v Speaker 5>Law so tough, Well, it's just that it doesn't have

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<v Speaker 5>exceptions in it right now, and so that's why it's tough.

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<v Speaker 5>So it would apply to everyone, and there seems to

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<v Speaker 5>be a growing consensus that non compete should be banned

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<v Speaker 5>for low wage journers, but not for certain workers who

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<v Speaker 5>have trade secrets and no certain information in their company

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<v Speaker 5>that they can then use against that company in competitive environment.

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<v Speaker 5>And that's what businesses are really concerned about. They're not

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<v Speaker 5>concerned about the low way journeers. On the other hand,

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<v Speaker 5>there is a problem because these non competes were being

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<v Speaker 5>used against workers who had no trade secrets. I mean,

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<v Speaker 5>if businesses concern are the trade secrets, then let's just

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<v Speaker 5>talk about those.

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<v Speaker 2>Yeah, can't they protect themselves with confidentiality or non solicitation

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<v Speaker 2>agreements and trade secret laws.

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<v Speaker 5>They could do that, and that's why in some sense

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<v Speaker 5>you have to question what their motives are. I would

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<v Speaker 5>say their motive is probably to be really cautious and

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<v Speaker 5>they want to protect it in many different ways, and

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<v Speaker 5>so they're very concerned about that. But you're right, they

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<v Speaker 5>can probably protect this information in many other ways. Now

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<v Speaker 5>here's the problem. Once they start working for another company,

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<v Speaker 5>if that employ u then gives the trade secrets, it

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<v Speaker 5>may be harder to prove, So it's just easier to

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<v Speaker 5>keep them from giving away the secrets by not letting

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<v Speaker 5>them work at all. And so that's what the issue

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<v Speaker 5>really is, and I think that's probably what's motivating in

0:16:12.920 --> 0:16:14.000
<v Speaker 5>the companies right now.

0:16:14.280 --> 0:16:15.520
<v Speaker 1>So let's back up a bit.

0:16:15.760 --> 0:16:18.160
<v Speaker 2>Can you give me basically the pros and cons of

0:16:18.280 --> 0:16:19.280
<v Speaker 2>banning non competes.

0:16:19.640 --> 0:16:23.200
<v Speaker 5>Well, if you ban noncompete, what you're really doing is

0:16:23.240 --> 0:16:26.560
<v Speaker 5>you're creating a more competitive environment. So you're saying, if

0:16:26.600 --> 0:16:29.320
<v Speaker 5>we really are a free market, capitalist country, let's take

0:16:29.320 --> 0:16:33.640
<v Speaker 5>that seriously, and you're allowing for the free movement of workers.

0:16:33.880 --> 0:16:36.920
<v Speaker 5>And it goes hand in hand with at will. At

0:16:36.920 --> 0:16:40.000
<v Speaker 5>will is you can be fired for any reason, good

0:16:40.040 --> 0:16:41.360
<v Speaker 5>or about it for no reason at all, and you

0:16:41.360 --> 0:16:43.520
<v Speaker 5>can leave for any reason, good about it for no

0:16:43.560 --> 0:16:45.800
<v Speaker 5>reason at all. And New York is a strong at

0:16:45.800 --> 0:16:49.320
<v Speaker 5>will state. And the point of that, supposedly is the

0:16:49.320 --> 0:16:54.040
<v Speaker 5>free market. So this allows for this free movement of workers.

0:16:54.280 --> 0:16:59.800
<v Speaker 5>The con to banning these agreements is really the trade secrets.

0:17:00.080 --> 0:17:03.520
<v Speaker 5>That the companies are concerned about their trade secrets. But

0:17:03.960 --> 0:17:09.159
<v Speaker 5>our whole country has been built on allowing innovation to

0:17:09.240 --> 0:17:12.840
<v Speaker 5>freely move around companies. I mean, if you look back,

0:17:13.160 --> 0:17:17.359
<v Speaker 5>the cotton gin was stolen from British inventors and brought

0:17:17.359 --> 0:17:22.520
<v Speaker 5>over here. So really what companies are worried about is

0:17:22.520 --> 0:17:25.800
<v Speaker 5>they want to keep that competitive advantage. So if your

0:17:25.880 --> 0:17:28.719
<v Speaker 5>pure free market, you should be in favor of bands

0:17:28.840 --> 0:17:32.480
<v Speaker 5>on non competes. If you're trying to protect companies, you

0:17:32.520 --> 0:17:35.879
<v Speaker 5>should be in favor of certain exceptions. I guess another

0:17:36.000 --> 0:17:39.639
<v Speaker 5>thing is though, that companies might be shy to develop

0:17:39.920 --> 0:17:43.040
<v Speaker 5>certain secrets if they know that they can be stolen

0:17:43.200 --> 0:17:46.720
<v Speaker 5>very easily. So maybe there's a good compromise there where

0:17:46.800 --> 0:17:49.480
<v Speaker 5>you can protect those secrets for a certain amount of time.

0:17:49.840 --> 0:17:52.639
<v Speaker 5>And that's what intellectual property law is made for, is

0:17:52.680 --> 0:17:54.600
<v Speaker 5>to kind of figure out what that right balance is.

0:17:56.160 --> 0:18:02.440
<v Speaker 2>Groups representing hundreds of firms, including banks, private equity law firms,

0:18:02.480 --> 0:18:06.000
<v Speaker 2>retail giants, and telecom companies, are lobbying the governor to

0:18:06.040 --> 0:18:09.119
<v Speaker 2>make changes, and Paul Zuber of the Business Council of

0:18:09.160 --> 0:18:12.320
<v Speaker 2>New York State told Bloomberg, I think the legislature was

0:18:12.359 --> 0:18:15.119
<v Speaker 2>trying to help that person who's a low wage worker

0:18:15.160 --> 0:18:17.520
<v Speaker 2>that has a non compete. I don't think it was

0:18:17.600 --> 0:18:20.760
<v Speaker 2>ever their intent to go as broad as senior management

0:18:20.840 --> 0:18:26.480
<v Speaker 2>at financial services, banking, tech, entertainment sectors and more. Do

0:18:26.520 --> 0:18:30.119
<v Speaker 2>you think that's true? I mean, doesn't the legislature understand

0:18:30.160 --> 0:18:31.840
<v Speaker 2>what they're outlying here?

0:18:32.760 --> 0:18:37.000
<v Speaker 5>I have no idea what the legislature is thinking. I

0:18:37.080 --> 0:18:44.080
<v Speaker 5>think that's probably his charitable way of saying, Look, if

0:18:44.160 --> 0:18:49.120
<v Speaker 5>you go too far with this, then we are going

0:18:49.160 --> 0:18:52.399
<v Speaker 5>to have to litigate this really hard, and this is

0:18:52.440 --> 0:18:55.440
<v Speaker 5>going to be a problem. Remember, New York is a

0:18:55.480 --> 0:19:01.760
<v Speaker 5>big important center for these types of companies. And maybe

0:19:01.920 --> 0:19:06.120
<v Speaker 5>also what he's suggesting is they'll move out of state. Right,

0:19:06.240 --> 0:19:09.520
<v Speaker 5>you always have to worry about the free movement of capital. Also,

0:19:10.720 --> 0:19:15.640
<v Speaker 5>so he does make a persuasive case that might allow

0:19:15.880 --> 0:19:19.679
<v Speaker 5>for New York to get most of its cake and

0:19:19.760 --> 0:19:23.880
<v Speaker 5>eat it too. This does allow the parties to open

0:19:23.960 --> 0:19:27.480
<v Speaker 5>up a conversation about how best to protect those trade

0:19:27.520 --> 0:19:31.120
<v Speaker 5>secrets and how best to deal with those types of workers.

0:19:31.200 --> 0:19:34.840
<v Speaker 5>And it does show a concession on his part that, wait,

0:19:34.920 --> 0:19:38.000
<v Speaker 5>maybe we have been enforcing this too broadly. I know

0:19:38.119 --> 0:19:41.240
<v Speaker 5>in West Virginia where I teach, they were trying to

0:19:42.080 --> 0:19:47.520
<v Speaker 5>enforce non competes against gymnastics coaches, and in a rural

0:19:47.560 --> 0:19:50.480
<v Speaker 5>area like West Virginia, they'll have like one hundred mile

0:19:50.600 --> 0:19:53.159
<v Speaker 5>geographic ban or something like that. I mean, it just

0:19:53.280 --> 0:19:56.040
<v Speaker 5>it doesn't make a lot of sense for a gymnastics

0:19:56.040 --> 0:19:59.360
<v Speaker 5>coach to have a non compete enforced against him or her.

0:20:00.160 --> 0:20:03.360
<v Speaker 5>No sense. And they're also doing this coal miners. I mean,

0:20:03.440 --> 0:20:05.840
<v Speaker 5>why does it matter whether coal miner works for one

0:20:05.880 --> 0:20:09.040
<v Speaker 5>coal company or another coal company. So then you really

0:20:09.040 --> 0:20:11.440
<v Speaker 5>start to see that they're just trying to poach workers,

0:20:11.640 --> 0:20:15.320
<v Speaker 5>which is a problem on the free market. So I

0:20:15.359 --> 0:20:18.679
<v Speaker 5>think the trade secrets and the intellectual property is a

0:20:18.760 --> 0:20:22.840
<v Speaker 5>legitimate business interest. Even in a free market. It is

0:20:22.880 --> 0:20:25.439
<v Speaker 5>some restraint on trade, but I think we have to

0:20:25.480 --> 0:20:29.679
<v Speaker 5>recognize it's a legitimate interest and that the governor's office

0:20:29.920 --> 0:20:32.760
<v Speaker 5>needs to at least engage in those discussions and come

0:20:32.840 --> 0:20:35.520
<v Speaker 5>to some sort of agreement that everyone can live with.

0:20:35.840 --> 0:20:42.000
<v Speaker 2>I understand that, especially financial firms have prohibitions on employees

0:20:42.440 --> 0:20:44.600
<v Speaker 2>moving to a new job that can run as long

0:20:44.760 --> 0:20:48.840
<v Speaker 2>as two years, right, doesn't that effectively bind them to

0:20:48.920 --> 0:20:52.000
<v Speaker 2>their job unless they want to change careers or they

0:20:52.080 --> 0:20:55.119
<v Speaker 2>have enough money to last two years.

0:20:54.880 --> 0:20:58.399
<v Speaker 5>It's a problem. There's usually a geographic restraint on it

0:20:58.720 --> 0:21:01.240
<v Speaker 5>as well, though, so they can and leave new York.

0:21:01.680 --> 0:21:04.080
<v Speaker 5>But in the financial industry, where you're going to go

0:21:04.440 --> 0:21:07.560
<v Speaker 5>it is New York, right, So I suppose they can

0:21:07.560 --> 0:21:10.120
<v Speaker 5>go to London or Frankfort, But who's going to pick

0:21:10.200 --> 0:21:12.040
<v Speaker 5>up and move all the way over there. And that's

0:21:12.080 --> 0:21:16.560
<v Speaker 5>another thing, these geographic restraints. How willing are most Americans

0:21:16.600 --> 0:21:20.399
<v Speaker 5>to even move out of state? So most courts have

0:21:20.920 --> 0:21:24.480
<v Speaker 5>found that non compete clauses, even where they're legal, are

0:21:24.600 --> 0:21:29.159
<v Speaker 5>void where they're not both time and geographically restricted. And

0:21:29.200 --> 0:21:31.520
<v Speaker 5>you're right, two years is a long time, but that's

0:21:31.520 --> 0:21:35.920
<v Speaker 5>what's been allowed as reasonable and then a reasonable geographic restriction.

0:21:36.240 --> 0:21:39.320
<v Speaker 5>But those are still problematic from the employee's point of view.

0:21:40.000 --> 0:21:42.440
<v Speaker 2>I mean, is there a lot of litigation over non

0:21:42.480 --> 0:21:43.520
<v Speaker 2>compete clauses.

0:21:44.160 --> 0:21:48.800
<v Speaker 5>Yes, they're litigated quite frequently. I've seen people have non

0:21:48.840 --> 0:21:52.760
<v Speaker 5>competes and even if they're a specialized worker, I've said, well,

0:21:52.800 --> 0:21:54.880
<v Speaker 5>why don't you just ask for your employer to let

0:21:54.880 --> 0:21:56.840
<v Speaker 5>you out of it. A lot of times employers will

0:21:56.840 --> 0:21:58.919
<v Speaker 5>just let you out of it when you don't have

0:21:58.960 --> 0:22:01.040
<v Speaker 5>a trade secret, or even though you're making a lot

0:22:01.080 --> 0:22:04.280
<v Speaker 5>of money, you're not very high level. But a lot

0:22:04.320 --> 0:22:09.720
<v Speaker 5>of times employers either just feel the need to impose

0:22:09.760 --> 0:22:12.760
<v Speaker 5>their power over an employee. I mean, there's litigation over

0:22:12.840 --> 0:22:16.080
<v Speaker 5>coal miners. It seems ridiculous the coal miners can't go

0:22:16.160 --> 0:22:20.440
<v Speaker 5>from one mind to another. And this really does lower wages.

0:22:20.560 --> 0:22:23.280
<v Speaker 5>So there's been studies about that where when you have

0:22:23.400 --> 0:22:26.359
<v Speaker 5>these broad non competes, you really are lowing wages. So

0:22:26.440 --> 0:22:29.280
<v Speaker 5>that again I would say, that's an illegitimate interest of

0:22:29.359 --> 0:22:32.080
<v Speaker 5>employers because they're saying they don't want to compete freely.

0:22:32.359 --> 0:22:35.080
<v Speaker 5>So I think if they can focus with the Governor's

0:22:35.080 --> 0:22:38.000
<v Speaker 5>office on what they really care about and what's the

0:22:38.119 --> 0:22:41.320
<v Speaker 5>really legitimate interest, which are these trade secrets, I think

0:22:41.920 --> 0:22:45.880
<v Speaker 5>likely that the Governor's office will come to some sort

0:22:45.920 --> 0:22:49.800
<v Speaker 5>of agreement with them. Now whether or not the two

0:22:49.960 --> 0:22:52.520
<v Speaker 5>chambers of the New York Legislature will then agree to that,

0:22:52.560 --> 0:22:55.760
<v Speaker 5>because in New York, if there are any amendments, they

0:22:55.760 --> 0:22:58.840
<v Speaker 5>have to go back to the legislature for approval, and

0:22:58.960 --> 0:23:00.199
<v Speaker 5>so time will tell.

0:23:00.800 --> 0:23:02.680
<v Speaker 2>So and let me ask you this, when a court

0:23:02.760 --> 0:23:05.119
<v Speaker 2>is looking at a non compete, what are some of

0:23:05.119 --> 0:23:07.439
<v Speaker 2>the things they're looking at.

0:23:06.840 --> 0:23:09.720
<v Speaker 5>The reasonableness of it? And reasonableness will vary from state

0:23:09.760 --> 0:23:12.280
<v Speaker 5>to state, but the two things they really look at

0:23:12.320 --> 0:23:17.240
<v Speaker 5>are time in geography, So most courts, we'll say up

0:23:17.240 --> 0:23:20.600
<v Speaker 5>to two years is reasonable, and most courts will say

0:23:21.040 --> 0:23:25.600
<v Speaker 5>twenty five miles fifty miles. But what's reasonable also could vary,

0:23:25.960 --> 0:23:28.359
<v Speaker 5>like what's reasonable in New York City may not be

0:23:28.440 --> 0:23:31.600
<v Speaker 5>reasonable in rural New York. So this is something courts

0:23:31.640 --> 0:23:33.959
<v Speaker 5>are very good at. They're very good at balancing things.

0:23:34.040 --> 0:23:36.640
<v Speaker 5>So that's what courts will look at, are those two

0:23:37.000 --> 0:23:42.360
<v Speaker 5>variables within the context of the industry and the geography

0:23:43.000 --> 0:23:45.080
<v Speaker 5>of that particular jurisdiction.

0:23:45.600 --> 0:23:48.720
<v Speaker 2>Thanks so much, Anne Best, Professor Alfasso of the West

0:23:48.800 --> 0:23:51.879
<v Speaker 2>Virginia University College of Law, and that's it for this

0:23:52.000 --> 0:23:54.760
<v Speaker 2>edition of The Bloomberg Law Show. Remember you can always

0:23:54.760 --> 0:23:57.639
<v Speaker 2>get the latest legal news on our Bloomberg Law Podcast.

0:23:57.960 --> 0:24:02.200
<v Speaker 2>You can find them on Apple Podcasts and at www

0:24:02.320 --> 0:24:06.600
<v Speaker 2>dot bloomberg dot com, slash podcast Slash Law, and remember

0:24:06.640 --> 0:24:09.600
<v Speaker 2>to tune into The Bloomberg Law Show every weeknight at

0:24:09.600 --> 0:24:13.080
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<v Speaker 2>listening to Bloomberg