Oh boy. Lots to discuss on the Charlie Sheen matter. This really requires rolling my legal sleeves. First, this case mirrors that of Fashion designer John Galliano. Specifically we have two employees who are public figures and whose conduct(s) off duty have had arguably significant detriment to their employers i.e. money and reputation. The key question becomes whether these employees can be fired by their employers given their alleged harmful conducts that occur off duty? In Galliano’s matter, I answered this question. You should read it here. Sheen’s matter takes a slightly different angle on the analysis, given his argument that his employer Warner Bros. (WBTV) had notice of his conduct but continued to engage him as an employee. Also, here, I focus on the actual contract terms with Sheen and WBTV.
AREAS OF LAW: We’ve got so many areas of law at play and for UDUAK LAW FIRM BLOG law students reading this; this is a great issue spotting case on employment, contracts, criminal, torts and intellectual property laws. Our primary focus here is on the two big areas in dispute: contract law and employment law.
CONTRACT DISPUTE: The Television Performer Employment Agreement
PARTIES: Charlie intends to sue Warner Bros (WBTV), CBS and Chuck Lorre. Lorre, as of today, has retained legal counsel in preparation for Sheen’s suit.
Once Sheen sues, WBTV can counter sue Sheen. In their letter dated today, March 7th, 2011 (available at end of this article), on page 10, subheading D, WBTV says “Mr. Sheen’s conduct constitutes breach of contract, breach of the covenant of good faith and fair dealing and tortuous interference with Warner Bro.’s contracts with third parties, among other causes of action.” The bolded statements are the legal actions WBTV is contemplating.
SHEEN’S POSITION: Sheen maintains he is “ready, willing and able” to fulfill his obligations under the terms of WBTV agreement. He believes he is fired because he called Chuck Lorre, co creator of the Men show, a “clown” and “Chaim Levine,” among other not so nice things. Sheen says he is being “retaliated” against.
Sheen also maintains that WBTV has had notice of his addictions, personal drama and criminal conduct yet chose to continue to hire him and in fact entered into a new contract with him. Sheen points to what we will call ‘Exhibit 1,” through his lawyer in his recent correspondence to WBTV, which states, “From January 2010, even after my client was arrested and then charged with a felony and misdemeanor charges, Warner Bros. did not suspend my client. Instead it wanted my client to agree to commit to do additional seasons of [Men]. Warner Bros. confirmed that it would continue to employ Mr. Sheen even if he pleaded guilty to a felony as long as he did not serve jail time that would interfere with the production schedule.” Finally, Sheen says, WBTV you don’t even have moral rights in your contract. So, what are you going on about?
As one of my legal litigation mentors would say to me, all the time, “we are at war baby!” Indeed. It really is. All sides have hired some of the fiercest litigators in show biz. The battle line is drawn and the fight could begin any moment from now. Be prepared to duck for cover.
Sheen wants payment for $1.2million per episode for “Men” and he wants the cast and crew to be paid for the remaining eight episodes.
WARNER BROS. POSITION
WBTV essentially maintains the following position:
- Sheen you are very sick and you really need help. We have tried to help but WOW! bro. you got some deep issues.
- Yes we negotiated an agreement with you even in your sick state but we did it because you “voluntarily entered a rehabilitation facility and (were) under professional treatment for (your) drug and alcohol abuse” problems. See page 3 of WBTV Letter. Now, you are not even getting help. You gave us assurances you would get your life together which is why we entered into a new agreement with you. You reneged on your agreement to enter rehab.
- Sheen you have been perambulating your drug (cocaine) use all over Las Vegas. You say we did not give you moral rights in our contract but oh yes we did! We said in section 19 of our agreement, in relevant part: “If Producer in its reasonable but good faith opinion believes Performer (Sheen) has committed an act which constitutes a felony offense involving moral turpitude under federal, state or local laws, or is indicted or convicted of any such offense, Producer shall have the right to delete the billing provided for in this Agreement from any broadcast or other uses which are thereafter made of the episode(s) in which Performer appears. In addition, to the extent such event interferes with Performer’s ability to fully and completely render all material services required hereunder or Producer’s ability to fully exploit the Series, Producer shall have the right to treat such act as a default under the applicable provisions hereof.”
- Additionally, “Sheen (you have) failed, refused or neglected to perform (your) material obligations to the best of (your) ability in a number of other ways. For example, (your) admitted extreme cocaine use violates (under) obligation under Section 22(b) of the Standard Terms & Conditions not to “engage in any extra-hazardous activity without Producer’s prior written consent in each and every case.“
- Similarly, the changes in your physical appearance (Sheen lost over 20pounds) violated your obligations under Section 24 of the Standard Terms & Conditions.
- Sheen you have a mental health (bipolar/manic depression) condition that renders you incapable of performing. Sheen, to the media, you said:
- “I am on a drug. It’s called Charlie Sheen. . . If you try it once you will die.
- Your face will melt off and your children will weep over your exploded body.”
- “I have tiger blood” and “Adonis DNA.”
- My brain “fires in a way that is … maybe not from this particular terrestrial realm.”
- “I’m not bipolar but biwinning.”
- “I’m tired of pretending I’m not a total bitchin’ rock star from Mars.”
What sane person talks like this Sheen?
Okay, While You All Contemplate Sheen’s Statements, What’s Really Good?
WBTV says it wants all parties to “arbitrate” pursuant to the “arbitration” clause in the agreement Sheen signed. See page 10 of WBTV’s Letter, paragraph E. An arbitration clause essentially says, before you run to court and cause all sides to spend $20,000 on a good day and $100,000 and above on a bad day to litigate your claim, let’s try to solve our problems outside court in a less formal setting. If the arbitration is binding, whatever the arbitrator says is final. Courts will enforce the arbitrator’s decision. If the arbitration is non- binding, then you can still sue in court, especially if you disagree with the arbitrator’s decision.
We wait to see how it all shakes out. For right now though, suffice it to say Charlie Sheen’s “Tiger Blood” and “Adonis DNA” has not been enough to cause “bi-winning” results on the ‘Two and a Half Men Show.’ It looks like we are headed to trial people.