'Held hostage': Sinclair Media Company employees signed rare contract clause

On-air employees of Sinclair Media Group are facing criticism for reading a message about fake news on air that was mandated by head office. But had they resigned in protest, they could have been asked to pay back 40 per cent of their annual compensation because of a rare contract clause.

Employees could have been required to pay back wages had they resigned in protest over 'fake news' script

A screenshot from Deadspin illustrates how dozens of on-air personalities employed by Sinclair Media Group read the same script condemning fake news, which originated in the company's head office. (Deadspin )

Many people working in American cable news pondered the same question this week: Why did hundreds of anchors for Sinclair Broadcast Group all recently agree to read the same editorial on air?

And more specifically, if they were opposed to it — as many were reported to have privately conceded — why didn't they just refuse or quit?

The answer seems to demonstrate how the politicized nature of news in the U.S. has filtered down to local markets, where many journalists have fewer options for career movement. It has also shed light on a rare employment clause in many Sinclair Broadcast Group contracts.

The script, and the dictate to read it verbatim, came from Sinclair's head office last month. The company, which leans conservative, owns nearly 200 local U.S. television stations and reaches about 40 per cent of U.S. households. 

Described internally as the company's corporate news journalistic responsibility promotion campaign, it featured on-air news teams reading lines like this, directly into the camera:

"We're concerned about the troubling trend of irresponsible, one-sided news stories plaguing our country. The sharing of biased and false news has become all too common on social media.

"More alarming, some media outlets publish these same fake stories … stories that just aren't true, without checking facts first.

Unfortunately, some members of the media use their platforms to push their own personal bias and agenda to control 'exactly what people think'…This is extremely dangerous to a democracy."

Shortly after the Stepford-like editorials started airing across the country, Trump tweeted out his support.

But many took the effort, which was ostensibly meant to champion Sinclair's journalism against the scourge of fake news, as a drive-by smear of reporting critical of the White House in order to further ingratiate the company with the U.S. President. Sinclair Group is currently seeking approval from the Trump administration to buy Tribune Media Company, which would vastly increase its holdings.

'A disgrace across the board'

The action drew scorn from many journalists, largely working from the security of larger U.S. cable networks, who suggested that if the Sinclair employees were truly "journalists" they would have refused to utter the oath-like creed or quit.

"This was a disgrace across the board, on the part of the journalists involved," said Mika Brzezinski, co-host of the popular U.S. weekday morning TV program Morning Joe on MSNBC.

A deal is pending that could see Sinclair Broadcast Group, headquartered in Hunt Valley, Md. acquire Tribune Media Company. If approved, the acquisition would expand the conservative-leaning company's audience. (Getty Images)

Scott Livingston, Sinclair's senior vice president of news, was quoted by the New York Times calling the backlash "ironic." He also said the company makes clear to the audience when its staff are reading news or commentary.

But that caused Bloomberg News to wonder if anyone had refused to read the script and, in doing so, it unearthed an employment clause that few outside Sinclair Group were familiar with.

"For Sinclair employees, it can be very expensive to leave," Bloomberg reporter Jordyn Holman told The Investigators this week.

'Liquidated damages' clause

She discovered many Sinclair employees both on- and off-air are bound by contracts with a "liquidated damages" clause.

"It says if you leave before your contract is over, the company is able to charge you 40 per cent of your annual compensation," Holman said.

  • Watch the full interview with Jordyn Holman on The Investigators, Saturday at 9:30 p.m. ET and Sunday at 5:30 p.m. ET on CBC News Network.

So-called "non-compete" clauses are typical in broadcast contracts, mandating that if an on-air journalist leaves, they cannot appear on-air for another broadcaster within a set period of time, typically six to 12 months. They are meant to prevent the audience from simply following their favourite person to the new station without interruption.

But these "liquidation" clauses are newer and being applied far more widely among Sinclair staff, Holman said.

"In broadcast it's more common among on-air anchors, where it would be expensive for a company to have to train and find new talent to bring in. What's unusual with Sinclair, is that they've had some people who've never appeared on TV having to sign that clause."

She said some employees confided to Bloomberg News that "the political conservative lean is getting in the way of the factual journalism that they want to do."

Justin Simmons told CBC Radio's As It Happens this week, that being "forced to echo Trump's rhetoric on fake news" prompted him to quit his job at Sinclair's station in Kearney, Neb.

But with investment in local newsrooms shrinking, Holman said most Sinclair employees see little room to manoeuvre. They can't go to a competing station without sitting out a non-compete clause, paying a steep financial penalty for breaking their contract or paying a lawyer to fight it.

"They feel like they're being held hostage," she said.

Swift reaction

On Friday, deans and department chairs from eight U.S. universities sent a letter to Sinclair criticizing the company for requiring anchors to read the script.

"In making the leap to disparage news media generally — without specifics — Sinclair has diminished trust in the news media overall," the letter said.

"Ironically, Sinclair's use of news personnel to deliver commentary — not identified as such — may further erode what has traditionally been one of the strongest allegiances in the news landscape, the trust that viewers put in their local television stations."

Livingston later emailed a statement to acknowledging the fallout.

"We understand that the promo prompted an emotional response, and we'll learn from that in the future," the email said. "We value the connections our anchors have with their communities and trust that they will continue reporting local news for their viewers as only they know how to do."​

Also this week on The Investigators: The Fifth Estate's Bob McKeown talks about using decades-old footage to explore unsolved murders from the 1970's in Toronto's gay village. And CBC Winnipeg journalist Jacques Marcoux explains how he compiled the data for CBC's Deadly Force investigation.