Time Warner's Struggling News Channel Lashes Out at Defectors
By Erica C. Barnett
JULY 17, 2000: When you think of money-grubbing TV personalities, chances are Jenny Hansson isn't the first person who pops into your mind. Chances are you haven't even heard of Hansson, an ambitious young reporter who left her job covering business news at News 8 Austin last month.
In fact, chances are you don't even watch News 8, the 24-hour cable news network run by Time Warner that debuted around this time last year; with four network news programs competing with the no-frills, all-news station for viewers, few people in Austin do. And if you have seen Hansson, you certainly won't remember her as a glamorous, perfectly coiffed onscreen "personality"; her major job duties, in fact, involved lugging a 40-pound camera through the streets of Austin, then setting it up, then filming herself for a segment she would later edit back at News 8's studios. In TV news lingo, Hansson was a "one-man band" -- a common occupation in smaller markets, but almost unheard-of in major markets outside Time Warner's handful of cable news stations across the country.
The work, as anyone who's done it can tell you, was grueling. And the pay was low, no more than $12.50 an hour for a seasoned videojournalist. Few reporters will stick it out long enough to reach that level by choice. Maybe that's why Time Warner felt it had to lock its employees into lengthy (by any standard) three-year contracts, and why it has shown an unusual willingness to try to ensure that its employees stay loyal. In Hansson's case, that meant suing the wayward reporter, who left after less than a year at the station, for the astonishing sum of $50,000 -- more than twice her annual salary, which amounted to around $24,000.
"If I lose [this lawsuit], I'll have to file for bankruptcy," says Hansson, who is currently working as a reporter at Fox affiliate KABB in San Antonio. "I have credit cards; we had to buy clothes to wear on-air. We had to look nice ... I have a lot of bills already. I have $30 in my checking account."
A Binding ContractThe fact that the lawsuit has even been filed (by local heavyweights Fulbright & Jaworski, no less), more than the amount Time Warner is seeking, says everything there is to know about the cable behemoth's attitude toward recruitment and retention. Hansson's contract -- a maze of confusing legal terms and clauses setting limitations on her future employment -- is written in a manner that virtually prohibits her from leaving News 8 for any reason until the term of the contract is complete. The relevant portion of the contract -- the part Time Warner is suing Hansson to uphold -- says she can only leave the station to be a videojournalist (a term Hansson's lawyer interprets to mean a one-man band) for a TV station in one of the 30 largest markets nationwide. If Hansson had wanted to leave TV news altogether, in other words, under the terms of her contract she could not. In return, the contract promises Hansson regular yearly raises of less than 35 cents an hour.
"This contract restricts her from taking a job as a reporter at any other station, or any other type of occupation, whether it's waiting tables at the Hula Hut or working at this station in San Antonio," says Hansson's attorney David Brenner, who notes that only five or six top-30 market stations fit the criteria of Hansson's contract. (According to data from online employment service Tvjobs.com, San Antonio is ranked 37th in the nation; Austin is No. 61). "If George Bush decided to appoint her to be a judge in Travis County, she couldn't accept because it would violate the terms of this contract ... This is more restrictive than I've seen before with most other companies." Unlike a "noncompete" clause, which restricts news personnel from working at competing stations in the same market, Hansson's contract restricts her from working anywhere else at all.
Some attorneys would argue that Hansson should have looked a little longer before leaping into bed with a smart, contract-savvy company like Time Warner. David Sokolow, a contract expert and professor at the UT School of Law, notes that there aren't many legal barriers to keep people from signing bad contracts. "If you sign a contract saying that you're going to stand on your head in my office for eight hours a day, maybe that's a stupid thing to do, but you're contracted to do that," Sokolow says. Not having a lawyer or legal expertise, Sokolow says, is no excuse for making a bad decision. "She takes their money in return for signing the contract, and she accepts the terms of that contract. If you don't like the terms that are offered, you don't have to accept." Brenner, however, points out that Texas law requires the provisions of contracts to be reasonable, and he argues that the contract should be declared invalid because it would lock Hansson into three years of virtual servitude.
Are Damages Warranted?But while the validity of Hansson's contract may be open to discussion, the amount Time Warner is seeking -- which Hansson says grew from $8,000 to $15,000 to the $50,000 cited in the suit -- seems like a rather princely sum to ask from a reporter who, even at her new job in San Antonio, isn't exactly eating caviar for breakfast. According to the lawsuit, Time Warner's attorneys came up with the $50,000 figure by adding up the cost of advertising for a new person to fill Hansson's position, the cost of bringing people in to interview for her job, overtime paid to other employees until News 8 finds a replacement, and the cost of training a new employee. Moreover, the lawsuit says, "News 8 cannot train another employee like it trained Defendant." (According to several current and former News 8 employees, Hansson's "training" consisted primarily of participating in a group lecture by a media expert from the St. Petersburg, Florida-based Poynter Institute, who was flown in to speak to News 8 hires when the cable channel hit the airwaves last September.)
Could Hansson's training and the cost of hiring her replacement really add up to $50,000? According to Sokolow, Time Warner will have to go further than it has to justify the amount they're seeking from Hansson. "I can't believe they're bringing a lawsuit against her. That amazes me. But under the law they can do so if they wish to," Sokolow says. "But $50,000 -- I don't know how they arrived at that figure. If they arbitrarily picked that figure out of a hat ... that's clearly unreasonable." If Hansson were a major personality like Oprah Winfrey or Sam Donaldson, the damages might be reasonable, her attorney adds. But as a cable news reporter on an obscure business beat in Bastrop County, Hansson's chances for fame or personal recognition -- even on a local basis -- were slim at best. (If Time Warner has its way, though, that may change: Lately -- perhaps to establish its employees as bona fide "personalities" rather than as camera-toting flunkies -- News 8 has reportedly begun running regular promotions on other cable channels featuring its onscreen reporters in prominent roles.)
Employee RelationsOfficially, News 8 isn't commenting on the lawsuit. (Time Warner's lead attorney, Brian Greig, referred all questions to News 8 management.) But in general, News 8 general manager Brian Benschoter says, the station uses lengthy contracts to increase the "stability" of its reporting staff. "You have to live in a community and know all the players and really know the context to do this job," Benschoter says. "The product gets better as the staff gets more experienced. Any time you lose folks you lose a little bit of that collective memory."
The collective memory of News 8's staff is, to put it charitably, fading fast. It's not just that the station tends to hire reporters who are a little "green" to start with -- the same could be said of virtually any news program in Austin -- but that, by all accounts, even people without a life preserver in hand are jumping the station's ship. Although Benschoter insists turnover has been "pretty limited," one current News 8 employee (who requested anonymity) paints a grim picture: "I'd say that the vast majority of people, maybe 95%, want to leave," the employee says. "Everyone is making plans to get out of here." The reasons, the employee says, are simple: too much work for too little money and recognition. "We sit in a chair for 12 hours, five days a week, and we don't get a break," the employee says. "We're very understaffed ... Everybody does three jobs. The reporters do their own camera work and the directors roll their own tape ... We're just worn out, mentally and physically worn out."
Hansson -- who says her new job offered a 180-degree change from the working conditions she faced at News 8 -- recalls one particularly grueling summer day when she had to walk up the steps at Mount Bonnell -- all 100 of them -- "carrying 65 pounds of equipment in high heels and a skirt." Before long, Hansson says, the quality of her work had started to suffer. "If you're interviewing someone who's grieving and your audio won't work, you don't want to have to say, 'hold on while you're crying about your dead brother while I fiddle with my audio,'" she says. "It's hard to focus."
At other Time Warner cable stations, one-man bands have been replaced by more traditional teams of cameramen and onscreen reporters. But at News 8, it seems, only the contracts have changed. In some cases, the aforementioned employee attests, they've gotten longer; in others, News 8 management has tried to convince employees who weren't previously bound by contract to sign lengthy agreements in hopes of getting them to commit to specific employment terms (including fewer "outs," or terms under which an employee can leave without penalty) and rigid, non-negotiable pay increases. Once problems started emerging, the employee says, station management simply tightened its grip. "Once people ... started to leave, they made the contracts longer and the outs harder for people to get," the News 8 employee says. "But if you want to get out of a job, they should let you out. What are they going to do, handcuff you to an edit bay?"
Shani Walls, a former News 8 afternoon and weekend anchor who left the station for a head anchor job in 118th-ranked Fayetteville, Arkansas, takes a more sanguine view of her time at News 8, calling it "a very unique experience" that she wouldn't trade for anything. "It made me a stronger anchor," Walls says. Although she acknowledges that the schedule she worked -- from 9am-4pm on weekdays, and 4am-2pm on Saturdays and Sundays -- was "pretty erratic," she notes that odd hours aren't unusual at cable news stations, especially those that are on the air 24 hours a day. "It was very difficult for me to work those kind of hours; I'm not 25 any more," Walls says. "But I knew that when I took the job; it's just the nature of the business." And for all its problems, News 8 is still the only channel around that offers hard news without resorting to sensationalism -- the product, according to Walls, of former news editor Carla Fields' dedication to "local news done right." Fields left the station after four months to take a position as national news director at a Palm Beach, Fla.-based Internet company that produces a syndicated series on personal finance.
Hard Times Made HarderAround the time that Hansson announced her resignation to News 8's general manager, another News 8 employee named Lance Cook was going through a series of personal problems that would force him to quit his job as News 8's network administrator, a position he had held for only five weeks. First, his mother, who lived with Cook and his wife Marcy, fell ill, leaving the Cooks without day care for their eight-month-old son. All the local day cares Marcy Cook called had waiting lists of six months to a year, so she had little choice, she says, but to quit her job as a device engineer technician at Samsung and take care of her son. Then, a day after she was released from the hospital, Cook's mother decided to move out of the Cooks' house to a smaller place of her own, taking some $700 in income she had contributed to the household each month with her. And to make matters worse, the Cooks' latest property appraisal had sent the value of their Northeast Austin house skyward, increasing their house payments by some $200 a month.
With their total income cut by almost $55,000, the Cooks felt Lance's only option was to quit his job at News 8, which he had taken as a stepping stone to a new career in network technology, and take another, more lucrative job as an equipment technician at Applied Materials, doing essentially the same work he had done before he was hired by Time Warner. Unfortunately, like Hansson, Cook was also under contract -- for three years, a period Cook's lawyer says is "real unusual" for an administrative employee at Cook's level.
To Time Warner, the reasons for Cook's resignation didn't matter: By their reckoning, a breach of contract was a breach of contract, extenuating circumstances be damned. "I told [GM Brian Benschoter] I'm going to have to quit because I don't make enough money to pay my bills," Cook says. "And he said, 'Well, you're under contract ... We're going to take this up with our lawyers.'" It was not an empty threat. Two weeks after Cook put in his resignation, on June 8, Time Warner sent the engineer a letter demanding $10,000 in restitution; in exchange, the letter said, the company would let Cook out of his contract with News 8. "Failing this," it continued, "the Company feels it has no choice but to go to court to compel you to follow the terms of your Employment Agreement."
Benschoter "took it up with his lawyer and his lawyer sent out this letter saying ... you can't quit. And not only can't you quit, you can't work for anybody else either," Cook says. "I can't even work at Baskin-Robbins part-time." After three weeks went by without payment, a local attorney for Time Warner, John Jacks, from the law firm of Gray & Becker, made the threat of a lawsuit official, demanding $2,500 -- in addition to the $10,000 already requested by Time Warner -- for "necessary and reasonable attorney fees" associated with the firm's representation of Time Warner, as well as any other fees incurred "for prosecuting such a suit."
"If we had that kind of money he would have never had to quit," says Marcy Cook. "If I had that in my savings account, I could have wrote them a check, but I mean, come on -- nobody does."
Certainly not the Cooks. Lance Cook made $38,000 a year as a network administrator for Time Warner, a sum he says worked out to about $12 an hour for the amount of time he put in at the station. How that works out to $10,000 in damages, he says, is anybody's guess. "I couldn't see [Time Warner's damages] possibly being more than I got paid in the time that I was there. How can they charge me more than they paid me?" The $10,000 figure certainly wasn't the cost of Cook's training, which he says was "minimal," no more than 10 hours total in the seven weeks he was there. And it wasn't in line with Cook's experience as a network administrator, which he says Time Warner could get for "a dime a dozen."
Cook's attorney, Shelly Fristoe, says he'll ask Time Warner to justify their claim to $10,000 in damages and $2,500 in attorney's fees. "I know Gray and Davis, and they're a good law firm, but he's going to have to have an amazing billing rate to charge $2,500 just for reviewing the contract. I don't know how this amounts to $2,500 worth of 'reasonable' attorney's fees." Moreover, says Fristoe, once they knew Cook was quitting, Time Warner made no attempt to reduce their damages by hiring a replacement for Cook to train. "Under the law you're required to mitigate your damages," says Fristoe. "You can't just let them build up and then later sue for that." He adds that, while he's focusing his energy for now on fighting the $10,000 charge, it's also possible that a court will declare the entire contract void.
Quite apart from the money is the question of whether Cook's contract was reasonable -- or even enforceable -- in the first place. According to Fristoe, the document was a cookie-cutter replica of contracts signed by onscreen TV personalities; it included clauses about intellectual property, accepting "payola," and Time Warner's exclusive right to Cook's televised image. But as a network administrator, Cook rarely went near a TV camera, and never appeared onscreen. "They've just plugged in this guy's job description into a contract that is clearly meant for an on-air TV personality," Fristoe says. "He was a network administrator. When is his face going to be on TV?" But the contract's benefit to Time Warner was clear: It locked Cook into a three-year term under extremely stringent conditions, but didn't afford him the bargaining power a more seasoned TV news employee would have sought. "Apparently they've used this contract to bind all these employees to long-term contracts at low wages," Fristoe says. "This contract is an employer's contract. The employee has very little bargaining power. He has the right to seek counsel to find out about what's in this contract, but you're not going to find people at his level of employment who're going to do that."
At its heart, Cook's case comes down to what lawyers call "impossibility of performance": Due to extenuating, unforeseeable circumstances, Cook could no longer perform the job he was hired to do. That, at least, is the defense Cook and his attorney plan to raise in court, if the case does go to trial. But in a larger sense, both Cook's and Hansson's cases come down to basic issues of fairness and reasonability: Is it reasonable to single out two employees who were in other ways exemplary, just because they wanted to get out of their contracts? Wouldn't it be better -- both for Time Warner's image and for its workers' sanity -- for Time Warner to offer its employees a reasonable opportunity to buy their way out of their contracts, or to include more "outs" in its contracts in the first place?
Shelly Fristoe thinks so; he's been practicing employment law for more than 10 years, and he says he's never seen a case like this one. "This is the most offensive thing I've ever seen," he says. "It just reeks of megacompany bullshit." And he sounds willing to fight Time Warner to the bitter end to prove his point. "If it ain't illegal, it just ain't fair, it just ain't right. That's the bottom line. If they want to spend all this money and take these poor folks to court and have 12 jurors here in Travis County tell them they can do that, then, you know, times have really changed here in Austin."
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