Will Jake Silverstein cost the New York Times an extra million dollars? Photo courtesy of Vimeo.
Texas Monthly editor Jake Silverstein, working under a three-year employment agreement that expires February 28, 2015, decides to leave Texas to become editor of the New York Times Magazine. Emmis Communications, owner of Texas Monthly, plus city magazines in Indianapolis, Los Angeles, Cincinnati, and Atlanta and a number of radio stations, then sues the Times Company for up to $1 million for “its interference with the Employment Agreement.” Emmis says, “While Jake leaves with our best wishes in his future endeavors, Texas Monthly has been damaged by the Times and expects to be fairly compensated.”
For this lawsuit to be filed, someone at Emmis had to be very angry at the Times or at Silverstein. Emmis is a company with revenues of $200 million a year, and while it’s a lot smaller after running into cash flow problems and selling off its television stations, it’s not some legally naive little publishing company in Indiana being pushed around by a big New York newspaper. And it’s not uncommon for an editor to accept a bigger job, with or without an employment agreement.
The lawsuit asks for “monetary relief over $200,000 but not more than $1,000,000.” Plus attorneys’ fees. Not a lot of money but a potentially big problem for the Times.
The small part of the problem: The attorneys’ fees. Ever been sued and had to watch how fast a law firm can send you a bill for $200,000 or more? And that’s just for the first month. Let the suit drag on for six months and you can be looking for attorneys’ fees well over that $1,000,000 number.
The big part of the problem? Ever been sued and had to sit in meetings with lawyers and then answer interrogatories (a formal set of written questions) and then sit in depositions (oral testimony under oath)? I did it more than once and always felt it was the equivalent of a serious illness.
Can the New York Times get a quick dismissal of a lawsuit filed in Travis County, Texas? If not, can it afford to force editor Jill Abramson, managing editor Dean Baquet, and Silverstein to sit through legal meetings, interrogatories, and depositions? I always figured a lawsuit cost me at least a month of actual work time and a year or two of life expectancy.
Advice to the Times: Pay a few hundred thousand, make peace with the Emmis people you made so angry, and let Abramson, Baquet, and Silverstein do their jobs.
A legal update: I asked a lawyer who specializes in litigation for a reaction to the Texas Monthly lawsuit: “Paragraph 11 of the complaint could be the key. It’s hard to prove, let alone win damages, for a tortious interference claim; usually you have to show that you notified the offending party of the agreement and that persistent interference would cause damages/irreparable harm. Note that they are suing for money, not injunctive relief to keep the editor at the magazine; it’s nearly impossible to legally force the employee to honor the agreement. But you might draw some dollars or your pound of flesh through litigation.”
The lawyer adds this legal fact of life, one that I faced several times as a defendant in libel actions: “In a case like this the plaintiff can leverage his litigation investment—every dollar the plaintiff spends to launch and pursue discovery costs infinitely more to defend.” For the Times, letting the Texas Monthly case go on too long thus could mean not only high legal bills but it also allows the Emmis lawyers to create all sorts of legal distractions for Abramson, Baquet, and Silverstein.
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Notes on Editors and Employment Agreements
I had one at The Washingtonian. I went to work there in 1969, and in 1979 the magazine was sold to Philip Merrill. In 1984, when I was about to turn 50, Phil and I were walking to lunch and he said that if I was ever going to leave the magazine I should do it soon because once you’re over 50 it’s much harder to change jobs. I told him I was happy being in Washington and working for him and had no intention of looking elsewhere. He then offered me a five-year employment agreement that automatically renewed unless cancelled. As an editor, I had never expected a contract but I liked working at the magazine and with a wife and two small children liked the job security provided by an employment agreement. Happiness all around and I retired in 2009 after 25 years of the employment agreement.
I asked Dick Babcock, the editor of Chicago magazine from 1991 to 2011, what he knew of employment agreements. He said that when the Tribune Company bought Chicago in 2002 “I asked the brass about a contract. The immediate reply: Tribune doesn’t give employment contracts (translation: Not at your pay grade, buster).”
I asked Dick if he thought it made a difference in the Texas Monthly-New York Times lawsuit if Silverstein had asked for the contract and then broke it. “I suppose it would make a moral difference if Silverstein had asked for the contract, but when have morals (or honor) ever ruled in job situations when ambitions are at play? Besides, I think most editors only think of the contract as protecting them—not the employer.” That squares with what Phil Merrill said about my employment agreement: It was in effect a one-way contract in that it gave me job protection but if I didn’t want to be the Washingtonian editor, he wasn’t about to force me to stay.
I asked Ed Kosner, who had a long and successful career as an editor (described in his book, It’s News to Me) about employment agreements:
“After I was fired by Kay Graham at Newsweek in 1979, I vowed that I would never work without a contract again.
“But I went to work as editorial director of the CBS magazine group although CBS wouldn’t give me a contract. Six weeks later, Rupert Murdoch offered me the job editing New York magazine. I told the CBS guys that I was sorry to leave them so abruptly, but I had to take the offer to edit an important magazine, and since I had no contract, I was free to go.
“My boyhood friend and lawyer, Tom Baer, negotiated my contracts with Murdoch for New York, later with Hearst for Esquire, and with Mort Zuckerman for, first, the job of Sunday editor of the Daily News and then editor-in-chief. In each case, the contracts were beneficial to me and fair to my employers.
“In the early 1980s, when I had been editing New York for several years. Zuckerman courted me to take over U.S. News & World Report. I told Murdoch immediately that I wanted to explore Zuckerman’s offer, but that I would honor my contract with him unless he chose to release me. He said he would release me but predicted (accurately) that I wouldn’t want to take Z’s offer. My lawyer had asked for and got a clause in the New York contract giving me the right to match any offer if the mag was ever sold. This seemed meaningless at the time because Murdoch had never sold anything. But when he got into a financial squeeze in 1991, he did the unthinkable and sold the mag. I sold him back my right of first refusal and wound up with a nice windfall.
“When Hearst offered me Esquire a couple of years later, they said they would hold the job for me for the remaining six or so months of my contract with New York, and I told Murdoch’s successors as owners of the mag that I would honor my contract, but they graciously released me early.
“In 2003, I told Zuckerman that I wanted to retire at the end of my second NYDN contract, but if he found a successor early, I’d happily step aside. He did and I did, and was paid out for the term of the contract.
“So I think in each case the contract worked out as intended. I was straightforward with the proprietors, and they with me.
“I suspect the ground in the Texas Monthly suit is “tortious interference”—meaning the Times allegedly improperly induced—or tried to induce—a T/M employe to violate his contract. Since Jill Abramson had been talking to the guy for months, it’s hard to see how T/M could have been blindsided by their editor. I saw some suggestion that the Times had agreed to pay T/M something for recruiting its contracted employe. Maybe there’s a dispute over that.”
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From the Emmis Publishing vs. The New York Times Company lawsuit:
9. On or around March 1, 2012, Texas Monthly and Jake Silverstein (“Silverstein”) entered into a valid and enforceable employment agreement whereby Silverstein would serve as the editor-in-chief of Texas Monthly (the “Employment Agreement”). Pursuant to Section 2 of the Employment Agreement, Silverstein was to be employed by Texas Monthly for a term of three years, “unless earlier terminated or extended in accordance with the provisions” of the Agreement. To date, Silverstein’s employment with Texas Monthly has not yet been terminated pursuant to the Employment Agreement.
10. In or around December 2012, Defendant contacted Silverstein to inquire about the possibility of Silverstein leaving Texas Monthly to serve as editor of New York Times Magazine (“The Times”). The Times is a publication produced by Defendant that is headquartered in New York, New York and distributed all across the country. Over the next several months, representatives from The Times diligently and regularly directed discussions with and recruited Silverstein for the editor position. In fact, in mid-March 2014, The Times’ executive editor Jill Abramson came to Austin, Texas and met with Silverstein to continue to push these efforts.
11. Upon learning of Silverstein’s discussions with The Times, Plaintiff’s Vice-President and Associate General Counsel Ian Arnold (“Arnold”) called Dean Baquet (“Baquet”), managing editor of The Times, and informed him that Silverstein was subject to the Employment Agreement through February 18, 2015. Arnold further advised Baquet that, because Texas Monthly would incur losses associated with any early termination of Silverstein, Texas Monthly expected to be compensated if Silverstein was hired by The Times. In response, Baquet told Arnold that The Times would contact Texas Monthly should The Times decide to hire Silverstein.
12. On March 28, 2014, multiple media sources reported that Silverstein had been hired as the editor of the Times. Despite Baquet’s assurances, The Times did not contact or inform Texas Monthly of its decision to ultimately hire Silverstein. In fact, Plaintiff did not learn of the hiring until Silverstein informed Plaintiff shortly before the Defendant publicly announced the hiring across multiple media outlets. In response, The Times has refused to even discuss compensating Texas Monthly for the damages resulting from The Times’ tortious actions.
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