Sinclair Employees Say They Can’t Afford to Quit

I’ve blogged previously about how non-competes in employment contracts can make it difficult for employees to change jobs — even if they work at low-level positions in the fast-food industry.

But the Sinclair Broadcast Group, Inc. is making it even harder for employees to quit by imposing financial penalties if they do so — even if the employees don’t then go to work for Sinclair’s competitors.

Sinclair is a publicly traded conglomerate that owns or operates about 193 television stations in 100 US markets, covering 40% of US households.

“Fake News”

As Bloomberg noted, Sinclair “drew widespread criticism for having anchors read a statement taking aim at the integrity of other U.S. media outlets….”

As the New York Times reported, dozens of Sinclair anchors were required to recite the same speech to their viewers.

Some wondered why unhappy Sinclair broadcasters didn’t just quit.

Liquidated Damages

One reason is that some Sinclair employees had a “liquidated damages” provision in their contract that required them to pay steep penalties if they quit before the term of the agreement ended.

The contracts provided that employees would have to pay back up to 40% of their annual pay for quitting before the end of the contract term.

A liquidated damages clause is an attempt to estimate the harm done to one party of a contract if the other side breaks the contract. It’s not supposed to act as a penalty.

Liquidated damages clauses are highly unusual in most employment agreements. Most employment terms are “at will,” meaning that either side can end the relationship at any time for any legal reason.

Liquidated damages clauses are more common in multi-year contracts for highly paid on-air personalities, but Sinclair required even some low-level employees who never appeared on-air to sign them, according to Bloomberg.

Man-on-the-Street

According to Bloomberg, in October of 2017, Sinclair sued a former employee at a Sinclair station in West Palm Beach, Florida, seeking  $5,700 in damages, as well as other costs.

The employee, James Beaton, said he had been ordered to do “man on the street” interviews that he felt to be politically biased.

Beaton said,

I’d ask loaded questions like, ‘How much do you disagree with Obama this year?’ It was disguised as real journalism. But I’m a Republican, and I was still pissed by it.

When the company offered to settle its claim for $1700, Beaton “told them to go jump in a lake.”

According to Newsweek, Sinclair also sued an on-air reporter after she left her job that paid $46,500 with 11 months left on her contract.

Unenforceable?

It’s not clear whether the Sinclair contracts would be enforceable if the matter went to litigation or arbitration.

Among other things, if a low-paid employee had to pay back 40% of a year’s salary (especially if they employee had worked for the company for less than a year) that could lead to the employee earning less than minimum wage, which is illegal.

An attorney quoted by Newsweek suggested that the lawsuits to enforce Sinclair’s contracts could be a violation of public policy.