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Monday, November 20, 2017

Silencing #MeToo: How NDAs and Litigation Stifle Victims, Innovators, and Critics

Dan Solove (George Washington) who has done groundbreaking work in information privacy law and is the founder of Teach Privacy, a one of a kind privacy and security training company, did a review/interview with me about You Don't Own Me this weekend. 

Silencing #MeToo: How NDAs and Litigation Stifle Victims, Innovators, and Critics -- An Interview with Orly Lobel

Dan Solove

Countless women have been coming forward to say #MeToo and share their traumatic stories of sexual harassment and assault. But there are many stories we're not hearing. These stories are being silenced by extremely broad nondisclosure agreements (NDAs), some made at the outset of employment and others when settling litigation over sexual harassment. They stop victims from talking. They also silence other employees who witness sexual harassment of co-workers. NDAs were a powerful device used by Harvey Weinstein to hush up what he was doing.

In her new book, You Don't Own Me: How Mattel v. MGA Entertainment Exposed Barbie's Dark SideProfessor Orly Lobel tells a fascinating story about the Barbie versus Bratz litigation, which went on for about a decade. Her book is a page turner -- told as a story that could readily be a movie. The book succeeds brilliantly as a gripping tale. But it goes beyond great storytelling to explore many important issues related to business, employment, and intellectual property: the enormous power of corporate employers, the weaponized use of intellectual property to stifle innovation, the dismal failure of business ethics, the troubling use of nondisclosure agreements (NDAs) to maintain dominance and power, and the punishing litigation process.

continue after the page break for the full interview

At the center of this litigation are two dolls -- Barbie, the iconic doll created by Mattel and Bratz, a new edgier multiethnic doll created by a former employee of Mattel. The story Lobel tells is riveting -- and there's a lot to learn from it, which Lobel clearly and compellingly demonstrates.

Professor Lobel teaches at University of San Diego School of Law, and she writes in the areas of employment law, intellectual property law, behavioral economics, and consumer law and trade secrets. Lobel has published numerous books and articles, including Talent Wants to Be Free: Why We Should Learn to Love Leaks, Raids, and Free-Riding (Yale University Press, 2013).

DANIEL SOLOVE: Recently, in connection with the #MeToo movement, there has been significant attention on how nondisclosure agreements (NDA) are preventing victims from sharing their stories of harassment and assault. These types of agreements play an important role in the saga in your book. Can you describe how NDAs were involved?

ORLY LOBEL: NDAs have been mushrooming in every industry. You Don’t Own Me begins with the story of a creative designer named Carter Bryant who works for Mattel in the Barbie department. Carter dreamed all his life of being an artist and he becomes rather uninspired in the mammoth bureaucracy of the world’s largest toy company. He dreams of a different kind of doll -- sassier, empowered, edgy, and multiethnic. This is often how new ideas and innovations are formed – when certain employees start imagining a different vision and want to strike out in a new direction. 

A lot of times, companies don’t take their employees’ ideas very seriously. At Mattel, because Barbie had dominated 90 percent of the doll market for a half a century, the company had this phrase that they must not “cannibalize her” – meaning, don’t invent anything that would compete with their winning product. Carter knew that the market was thirsty for a different kind of doll, except like so many of us, in every industry you look – whether you are an engineer, a scientist, a computer programmer, a sales or human resources person - Carter had signed away all his future ideas in a generic contract he signed upon being hired. Carter’s contract assigned “all inventions as defined, conceived, or reduced to practice at any time in his employment.” And Mattel claimed that that included any idea he had even if he had it during his weekends and nights.

The NDA caused years of incredibly expensive and damaging litigation. We only hear of a few examples of NDAs such as this one because it was fought over in court. In most situations, people are too afraid to try to set out on their own with their own ideas. Going against the corporate litigation machine is just too daunting.

SOLOVE: You have been quite critical of NDAs in your work. What are the problems with NDAs? How, specifically, might the law limit NDAs?

LOBEL: NDAs and other restrictive covenants such as non-competes, non-disparagement clauses, and broad innovation assignment clauses have the effect of preventing talented people from competing equally in the market. 

Take, for example, non-competes. Last year I was invited to the White House to discuss evidence that a majority of employees in the workforce today have been asked to sign an agreement to not compete with their former employers after they leave the company. And there is a rise in the number of cases brought by former employers against workers who allegedly breach these contracts by taking a new job in the same industry. Similarly, employers increasingly include as a standard provision in the employment contract a provision saying that the employee agrees that “you shall not at any time, directly or indirectly disparage the Company, including making or publishing any statement, written, oral, electronic or digital, truthful or otherwise, which may adversely affect the business, public image, reputation or goodwill of the company, including its operations, employees, directors and its past, present or future products or services.”

These are Draconian clauses, and they limit the employees freedoms, not only freedom of speech, but the ability to manage their careers, leave their employers, and resist misconduct that they witness or experience at work. Trade secret laws are already in place to protect what really should be the boundaries of confidentiality – information that is secret and that the company is making efforts to keep secret.

But as I have showed extensively in my research and my previous book Talent Wants to be Free, businesses have been demanding in contracts, and then pursuing these contract in court, much broader restrictions than that. Instead of focusing on technical information to remain secret, they want to silence their employees about problems, such as sexual harassment or other misconduct that happens in the workplace – we are seeing this now with the Harvey Weinstein scandal and previously with Fox, Uber and other corporations. Their culture of silence is a product of the law – the enforcement of these very overreaching agreements.

And these NDAs are also serving, as in Carter Bryan’s story, to impede creativity and invention in markets. The NDA chilled innovation and restricted employees from using their own ideas. Mattel had no interest in developing those ideas because they would “cannibalize” their perfect Barbie, but Bratz was a product consumers, kids and parents were eager to have – more reflective of our realities, our diversity, our hopes for our children. NDAs are a way for dominant actors to crush newer, smaller and independent competitors.\

SOLOVE: You Don’t Own Me looks at a fascinating decade long court battle between Mattel and it’s competitors and through that case it unfolds the company’s history and the marketing and controversies that have surrounded Barbie, the world’s most iconic doll. Can you tell us about the ways Mattel developed and marketed Barbie?

LOBEL: Part of what was thrilling to me in researching this story was how history repeats. You Don’t Own Me begins in our contemporary times when Barbie has shaped for six decades our images of womanhood, childhood and femininity. Just this week another story broke about how the media was outraged when a Texas politician Wendy Davis was likened to a Barbie. And also this week, Mattel introduced the first Hijab wearing Barbie. And when you look back at Mattel’s marketing strategies, it’s ads, it’s various dolls, from the introduction of the first African-American Barbie to the constant back and forth about Barbie’s body proportions, we discover how much the toys and culture that surround us are directed by corporate strategy and the use of consumer psychology in marketing.

Mattel had been incredibly slow in introducing ethnic diversity into its Barbie empire, had barely introduced to the market a Barbie that had more realistic proportions until 2017, and has made all sorts of questionable choices in how Barbie relates to girls. For example, Slumber Party Barbie, in 1965, came equipped with a scale—stuck at 110 pounds—and a book called “How to Lose Weight.” The book’s first rule: “Don’t eat!”. In 1992, Mattel introduced the Teen Talk Barbie line of talking dolls, which spouted lines like : “Will we ever have enough clothes?”; “I love shopping!”; “Wanna have a pizza party?”; and, wait for it, “Math class is tough!”

More recently, Mattel introduced a Barbie laptop loaded with design software and no other educational programs. And in a 2014 Mattel-licensed book called Barbie: I Can Be a Computer Engineer, published by Random House, Barbie designs a game but needs a boy to program it. Next, Barbie inadvertently infects her computer with a virus, and has her friend fix that too. “I’m only creating the design ideas,” Barbie says, laughing. “I’ll need Steven and Brian’s help to turn it into a real game!” In the end, after the two guys program her game, Barbie victoriously declares: “I guess I can be an engineer!” Among the Amazon reviews by upset parents about the book’s message, one parent suggests it be called “I Can Manipulate Boys Into Programming While I Sit Back and Take Credit.”

The stakes in Barbie versus Bratz case have enormous implications for society. Who gets to shape the attitudes and norms of womanhood? Here one dominant powerful company has had an enormous impact in defining womanhood for generations – and along comes a popular alternative toy with a different vision of womanhood. So the stakes go beyond the specific legal issues and have effects on millions of people and how they form their identities. Should one company’s vision dominate? 

These legal battles which are often little known to most people are having tremendous societal effects. Huge decisions are being made, ones that affect the ideas and views that entire generations will be exposed to. This is true with every field you work in – if you are doing marketing, advertising, product design, retail, services, online customer relations, the rules we make about how we compete in the market pattern the ways we progress in our careers, the opportunities employees, men and women from all over the world, have in the job markets, and ultimately, the culture and choices we have as a society.

SOLOVE: Intellectual property plays a key role in the story. What are some of the concerns about intellectual property law that this saga raises?

LOBEL: This story is one about how intellectual property was used as a weapon of corporate warfare. Mattel tied up Bratz in legal battles for a decade, and this bruising process severely hindered Bratz’s growth. Mattel, like many other dominant actors in tech, pharma, entertainment, and retail, is a frequent visitor to the courtroom. Corporations frequently litigate against artists, musicians, small competitors, using various aspects of intellectual property – copyright, patent law, trademark – even though many of the claims in the lawsuits are quite dubious. These suits are designed to quash competition and stifle new ideas and trends.

For example, when a photographer created some dark parody images of Barbie in a series compromised positions, which he called Food Chain Barbie, with titles of shots like, Baked BarbieBarbie a TroisBarbie in a Blender, and Bargaritaville, Mattel sued him. Similarly, if you take Disney’s beloved characters. Many fans like to create fan fiction or a film that parodies Star Wars (Lucas Film is now owned by Disney), or fan drawings say, political cartoons of Mickey Mouse. But Disney has been very litigious against this kind of cultural remix.

The same happens in patent litigation. IP serves a purpose and when the boundaries are in check, that works well. But if we lose sight of the goals of these laws, we risk achieving the opposite of what we set out to do.

SOLOVE: The central case that you write about in You Don’t Own Me was tried twice. What are some of the lessons of the story for the court system and trials?

The Barbie v. Bratz battle indeed was tried twice – each time with a different judge, different teams of attorneys and a different jury. What is fascinating is how much the changes in the actors made a difference in the results. One of my favorite characters in the book, 9th Circuit Court of Appeals judge Alex Kozniski. He, like many of the characters in You Don’t Own Me, is a very colorful outspoken person – he is a libertarian who loves pop culture, when he isn’t in the courtroom, he writes online reviews of films. Kozinski himself is an immigrant and he believes that markets, and life, are all about choices and freedoms. When the case comes before him, his views about law and freedom of expression, protecting speech and creativity, really make a difference. 

Similarly, a new attorney named Jennifer Keller brought into the second trial manages to shift the dynamics and to expose a lot of the backstory about why and how Carter Bryant was treated the way he was and whether it is fair to sue him. Keller plays into our love-hate relationship with Barbie and she calls herself something of a Bratz! And the trial was like a legal thriller – at every turn, new facts came up raising questions about business ethics and the values of corporate America. Without giving away spoilers, You Don’t Own Me will make you think about price-fixing, safe manufacturing processes, diversity in the workplace, ethical marketing and more. The reader will have to make up their own mind about whether Carter was justly attacked by his former employer or not, and you will find out what happens when the world’s largest toy companies don’t play nicely…

SOLOVE: Thanks, Orly, for a terrific discussion. The book is You Don't Own Me: How Mattel v. MGA Entertainment Exposed Barbie's Dark Sidepublished by Norton. This an immensely engaging and insightful book -- and it tells a riveting story.

This post was authored by Professor Daniel J. Solove, who through TeachPrivacy develops computer-based privacy and data security training.

International Privacy + Security Forum

Professor Solove is the organizer, along with Paul Schwartz, of the International Privacy + Security Forum (Feb. 26-27, 2018 in Washington, DC), an annual event designed for seasoned professionals. 

Originally posted on Dan Solove's LinkedIn Influencer Page

Posted by Orly Lobel on November 20, 2017 at 01:03 PM | Permalink

Comments

Thanks for that interesting post , many complicated issues here , but one should notice , that a contract generally speaking , is not a inviolable and totally sacred thing . If a contract , does clearly violate public policy concerns ( see for example : Bovard V. American horse enterprises ) it shall be nullified and void by court . In those issue presented in the post , one may argue that freedom of occupation , is definitely a constitutional right , and one can't limit totally the right of an employee to stick ahead to his career , after termination or resigning or whatsoever finishing his job in the firm .

However , one clear and typical distinction in common law , may be , that , general skills interiorized by the employee in the workplace , are his , while concrete patent or concrete invention , are in the legal possession of the employer .

Thanks

Posted by: El roam | Nov 20, 2017 3:00:49 PM

one can reach the case here :

http://online.ceb.com/CalCases/CA3/201CA3d832.htm

Thanks

Posted by: El roam | Nov 20, 2017 3:10:32 PM

Thanks to the author for the useful and informative article. I moved to the US, now I’m opening a law firm, you have a really good blog. https://mfc-list.info

Posted by: Albert | Nov 20, 2017 4:07:37 PM

Prof. Lobel is not at the U.C. San Diego School of Law, contra Prof. Solove because the University of California at San Diego does not have a School of Law.

Posted by: J. Bogart | Nov 20, 2017 5:03:12 PM

All great comments thanks for these - yes contracts are certainly not blindly enforced and in California in particular contracts that create a restraint on trade are void under section 16600 of the Cal Business Code -- this means all non-competes are void but also other clauses that operate like a de facto non-compete and prevent employees from leaving their employer. Also speech rights are protected in various ways both under the federal NLRA and under state laws. Alot of generic clauses that now appear in employee contracts are void but they still have a chilling effect because most employees won't risk testing their enforceability.
Bogart - correct Univ of San Diego School of Law.

Posted by: Orly Lobel | Nov 20, 2017 6:36:49 PM

All great comments thanks for these - yes contracts are certainly not blindly enforced and in California in particular contracts that create a restraint on trade are void under section 16600 of the Cal Business Code -- this means all non-competes are void but also other clauses that operate like a de facto non-compete and prevent employees from leaving their employer. Also speech rights are protected in various ways both under the federal NLRA and under state laws. Alot of generic clauses that now appear in employee contracts are void but they still have a chilling effect because most employees won't risk testing their enforceability.
Bogart - correct Univ of San Diego School of Law.

Posted by: Orly Lobel | Nov 20, 2017 6:36:50 PM

And don't ignore the stifling effect of compulsory arbitration clauses.

Posted by: jimbino | Nov 21, 2017 11:10:36 AM

And don't ignore the stifling effect of compulsory arbitration clauses.

Posted by: jimbino | Nov 21, 2017 11:10:36 AM

Absolutely pre-dispute arbitration clauses are another standard clause that together with these other clauses operates to keep most of what happens at work out of the sunlight.

Posted by: Orly Lobel | Nov 21, 2017 6:10:34 PM

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