According to Vice News, the non-disclosure agreement regarding the civil sex-trafficking suit filed by former WWE employee Janel Grant against WWE, Vince McMahon, and former executive John Laurinaitis has significant issues, which could make it unenforceable, according to experts.
A notable issue, deemed “possibly academic” in Grant’s case, is that the lawsuit states McMahon did not pay the entirety of the “hush money” agreed upon as payment for signing the NDA, likely making the contract void. This development, if it holds true, would potentially be “catastrophic” for WWE and McMahon.
The report further notes that according to a person familiar with the situation, McMahon secretly had the agreements drafted and then entered into them without WWE’s knowledge. Because of this, the company issued revised earning statements with the Securities and Exchange Commission following its Board of Directors becoming aware of the payments made by McMahon.
The news comes after the Wall Street Journal reported that at least four women signed to similar NDAs were named in a grand jury subpoena, including former WWE employees. If similar language was used in other agreements that were signed, a “reasonable inference” according to the report, those who signed may be able to set the contracts aside.
Carrie Goldberg, a lawyer who represented the victims of Harvey Weinstein, stated the agreement had a number of issues, from being vague and “poorly drafted” to not actually being signed by McMahon in any capacity. The latter is a point of contention, with a source familiar with the matter claiming that the agreement was signed in secret following counsel from longtime attorney McDevitt.
The report notes that neither McDevitt nor the firm he worked for prior to his retirement, K&L Gates, would respond to questions on the matter.
The matter brings to light the most problematic issue with non-disclosure agreements, as stated by Jodi Short, a professor at UC Law San Francisco who has studied such contracts. In an email to VICE News, Short remarks:
“It is my considered opinion that NDAs such as the one you sent me are unenforceable under common law contract doctrine. But there is very little case law squarely on point, and litigating such a case would expose an individual to enormous cost and litigation risk.
That’s why most people end up silenced by NDAs even if, technically, they’re not worth the paper they’re written on. It’s not just the paper. It’s paper backed by an extreme asymmetry in resources between the two parties.”
Goldberg agrees, pointing out that survivors do not owe debts to society and noting the arduous process that could lead to ruinous expense for the survivor, defining them “by the worst thing that ever happened to them.”
When asked what they understand the agreement to actually cover, a spokesperson for TKO, the parent company of WWE and the UFC, declined to comment, citing ongoing litigation.