On October 26, 2017, Harvey Weinstein filed a lawsuit in the Court of Chancery in the State of Delaware which contains far more information than what the media is reporting. Here is what we learn:
Harvey Weinstein’s Legal Team:
Since Lisa Bloom, Gloria Allred’s daughter, stopped representing Harvey Weinstein, all media reports simply refer to Mr. Weinstein’s representatives, with no names attached. The filing reveals that Mr. Weinstein has hired two law firms, Los Angeles based Glaser Weil Fink Howard Avchen & Shapiro LLP, and Delaware based, Morris James LLP. Each of the law firms identify three attorneys each for a total of six attorneys representing Mr. Weinstein against his former company. Lead counsel is none other than Patricia Glaser who has handled many high-profile employment disputes, including representing Keith Olbermann against Al Gore’s former Current TV and Conan O’Brien against NBC. Most recently, she also picked up Jamie Horowitz as a client after the former Fox Sports programming head was let go amid an internal investigation about sexual harassment claims. By hiring Ms. Glaser, who is a very well-respected, aggressive attorney, Mr. Weinstein is sending a message that he is not going quietly into the night.
Mr. Weinstein’s Lawsuit is brought in his capacity as a Stockholder of TWC, Not as an Employee:
The Weinstein Company Holdings, LLC, aka The Weinstein Company (“TWC”) was incorporated in Delaware. Before Mr. Weinstein was fired, he was the founder, Co-Chairman and Principal of TWC, and afterwards, still remains a stock holder of TWC. The verified complaint Mr. Weinstein filed indicates that he is seeking to obtain copies of his emails and personnel file, not as a former employee of TWC, but in his capacity as an owner, principal and co-chairman of TOC pursuant to a Delaware statute governing inspection of a limited liability company’s books and records and TWC’s limited liability company agreement (“LLC agreement”). The LLC agreement permits a member of TLC to access TWC’s books and records during normal business hours for “any purpose reasonably related to the Member’s interest as a Member; provided that exercising these rights will not unreasonably interfere with the operation and administration of TWC.” While it is unclear if this filing is intended to circumvent any provisions in his employment agreement that governs the forum, laws and methods by which all disputes arising from his employment will be resolved, it is clear that corporate record inspection statutes are intended for shareholders to inspect the corporate/financial books and records relating to the shareholder’s investment in a company, not as to an employee’s emails and personnel file.
Exhibit B is a letter from TWC’s counsel detailing the reasons for refusing to provide the emails and personnel file to Mr. Weinstein as a shareholder under Delaware Limited Liability Act, and governing case law. TWC cited caselaw that expressly prohibited seeking documents to investigate a shareholder’s own personal employment-related claims as is the case here.
Mr. Weinstein’s Motion to Expedite Production of Mr. Weinstein’s Personnel File and Emails within Five Business Days:
Mr. Weinstein’s legal team filed a “motion to expedite” production within five business days two of three categories of documents (which include any electronically stored information), arising from an informal request by Weinstein’s legal team that TWC produce (1) all emails sent to and from Mr. Weinstein’s TWC email account, (2) his personnel file and (3) TWC’s Code of Conduct. TWC only produced the Code of Conduct, but refused to produce the first two categories of documents which they now seek to compel by this motion. Attached to the motion are copies of letters between counsel for Mr. Weinstein and counsel for TWC that set forth the position of the parties. The motion and the attachments contain a treasure trove of information. This is what we learn:
- The “primary if not only” email account Harvey Weinstein used is TWC’s email account; his access to this email account was shut off by TWC.
- TWC retained Debevoise & Plimpton, an independent New York based law firm to conduct an independent investigation into allegations against Mr. Weinstein.
- On October 19, 2017, a “Special Committee of the TWC Board” sent Mr. Weinstein a letter asking that he provide to the investigators:
- any documents or property he removed from TWC offices since 6/1/17;
- any documents evidencing expenses dating back to 1/1/05;
- any documents concerning allegations of misconduct including, complaints, correspondence, settlement agreemtns and non-disclosure agreements. Special Commitee’s counsel also requested that Mr. Weinstein agree to waive any non-disclosure agreements or confidentiality agreements to allow the parties to those agreeements to speak without contraint to counsel;
- immediate access to any mobile phones, computer or other electronic devices used by Mr. Weinstein;
- electronic copies of emails, along with associated metadata, from all email accounts that Mr. Weinstein used from 1/1/5 to the present;
- immediate access to any mobile phones, computers, or other electronic devices used by Mr. Weinstein’s assistant, Travey Miller, who they understand has resigned from her TWC position and is now working for Mr. Weinstein directly;
- electronic copies of emails, along with associated metadata, from all email accounts that Mr. Weinstein’s assistant has used from the time she began her work at TWC to the present; and
- any other documents or information that you believe are relevant or related to our investigation.
- The investigators requested that Mr. Weinstein make himself available for two interviews, one within ten days of the October 19, 2017 letter, and the second one at a mutually agreeable time after the investigators have an opportunity to review the documents and information collected from him and interview of other witnesses. The investigators also requested that Mr. Weinstein make Ms. Miller available for two interviews.
- Weinstein’s verified complaint states that the purpose of his request is to determine whether there is any exculpatory information in those files that would assist the Company in defending against any claims…Should the Company be forced to pay out unjustified settlements or judgments, Mr. Weinstein’s interest as a member will suffer as a result … the less cash available for distribution, the less Mr. Weinstein will receive as a Member.”
- Weinstein’s verified complaint states that “certain press reports have mentioned information that Mr. Weinstein believes could have come only from his personnel file. By obtaining his personnel file, Mr. Weinstein can confirm that the information being reported to the press could have come only from his personnel file, and then pursue potential claims against the Company and its Representatives or officers for mismanagement by leading confidential Company information.”
The Weinstein Company’s Code of Conduct:
Attached to the complaint is a copy of TWC’s Code of Conduct and Ethics which was provided to Mr. Weinstein. The contents are simply shocking.
- Employees unsure of whether their conduct or conduct of their coworkers complies with the Code of Conduct should contact the head of human resources, or in the case of senior officers, like Mr. Weinstein, the Board. Is there a head of human resources at TWC?
- TWC’s harassment policy is not just limined to sexual harassment or based on any other protected characteristic, but it prohibits any kind of offensive or disrespectful conduct, including, degrading comments, intimidating or threatening behavior.
- “Employees may never act in a harassing manner.”
- “Employees may report a violation of the Code of Conduct anonymously on the Code of Conduct Reporting Line set up by TWC. The contact information for the Reporting line is [ ].” Nothing is filled in. The Code of Conduct indicates in the upper right hand corner “Draft 9/2/2015” so it is unclear if this was ever actually implemented.
What Mr. Weinstein’s Filing Tell Us:
Mr. Weinstein indicates that he intends to pursue all legal remedies against TWC which are likely to include, wrongful termination of employment and breach of his employment agreement, as well as, any claims arising from his status as a stockholder. If Ms. Miller resigned TWC to work for Mr. Weinstein directly, additional legal action may result for use of any trade secrets or violation of non-solicitation provisions in Mr. Weinstein’s employment agreement. What we can say for sure is that Mr. Weinstein is not going away quietly. Finally, upon review of counsel’s legal position, I predict this motion will be denied.