In my August 2020 newsletter, we discussed lessons from the New York Supreme Court's rejection of the Trump family NDA. Drafting lesson #1 is the need to specifically describe the information covered by the NDA rather than vague references.
Unfortunately for Trump, this lesson wasn't learned, as evidenced by a recent New York U.S. District Court decision in the case of Jessica Denson v Donald J. Trump for President, Inc. Plaintiff Denson was employed as a national phone bank administrator for the 2016 Trump campaign. Before she was hired, she signed the standard Trump employment contract containing broad non-disclosure and non-disparagement provisions. Confidential Information was defined as:
...all information (whether or not embodied in any media) of a private, proprietary or confidential nature or that Mr. Trump insists remain private or confidential, including, but not limited to, any information with respect to the personal life, political affairs, and/or business affairs of Mr. Trump or of any Family Member, including but not limited to, the assets, investments, revenue, expenses, taxes, financial statements, actual or prospective business ventures, contracts, alliances, affiliations, relationships, affiliated entities, bids, letters of intent, term sheets, decisions, strategies, techniques, methods, projections, forecasts, customers, clients, contacts, customer lists, contact lists, schedules, appointments, meetings, conversations, notes, and other communications of Mr. Trump, any Family Member, any Trump Company or any Family Member Company.
A Trump Family Member was defined as:
...any member of Mr. Trump's family, including, but not limited to, Mr. Trump’s spouse, each of Mr. Trump's children and grandchildren and their respective spouses, including but not limited to Donald J. Trump Jr., Eric F. Trump and Ivanka M. Trump, Tiffany Trump, and Barron Trump, and their respective spouses, children and grandchildren, if any, and Mr. Trump’s siblings and their respective spouses and children, if any.
A Trump Company was defined as:
any entity, partnership, trust or organization that, in whole or in part, was created by or for the benefit of Mr. Trump or is controlled or owned by Mr. Trump.
As to non-disparagement, the employment agreement provided:
During the term of your service and at all times thereafter you hereby promise and agree not to demean or disparage publicly the Company, Mr. Trump, any Trump Company any Family Member, or any Family Member Company or any asset any of the foregoing own, or product or service any of the foregoing offer...
(Congratulations if you're still here after wading through this "cover the waterfront" language. Bear with me.)
Denson moved for summary judgment, asking the Court to declare the non-disclosure and non-disparagement clauses invalid. U.S. District Court Judge Paul Gardephe, a G.W. Bush appointee, examined New York contract law, noting two key requirements in enforcing any contract. First, "impenetrable vagueness and uncertainty will not do, because definiteness as to material matters is of the very essence in contract law." Second, enforceability requires "a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms."
After reviewing the broad categories of information covered by the non-disclosure provision, Judge Gardephe determined that they could conceivably cover any information related to Trump and the campaign. Thus, "it was impossible for Denson to know what speech she had agreed to forego, and there is no possibility of mutual assent." So down went the NDA.
Regarding the enforceability of the non-disparagement provision, the reasoning - and conclusion - were similar, but the Court underscored its finding that Trump "alone is affiliated with more than 500 companies." And Trump "failed to cite any case that finds enforceable a non-disparagement provision comparable to that at issue here."
Finally, the Court addressed Trump's request for Judge Gardephe to revise the non-disclosure and non-disparagement provisions to make them enforceable. The Court was quick to nix that route, noting that it's one thing for a court to revise provisions of this nature to limit them in duration and scope, but quite another to engage in their wholesale re-drafting. The Judge again found that Trump "cited no case law suggesting that this Court may re-write the provisions in that fashion."
Once again, Trump's efforts to weaponize his contracts with sweeping non-disclosure and non-disparagement provisions have been shot down. Will he - and his lawyers - ever get this: you must carefully tailor your non-disclosure and non-disparagement provisions in your employment contracts if they are to pass judicial muster.
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