As Weinstein Co. Lifts Non-Disclosure Agreements, New Claims May Follow

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Current employees and former staffers, numbering in the hundreds, now won't be legally prevented from speaking out. "We're going to see the floodgates open," says one attorney.

As the embattled Weinstein Co. begins its journey in bankruptcy court, the proceedings may be even more transparent than they are in a typical Chapter 11 scenario.

That's because New York State Attorney General Eric Schneiderman's office persuaded TWC management to release employees from their nondisclosure agreements. The maneuver happened in advance of the bankruptcy filing March 19 and promises to unleash even more salacious details surrounding the epic fall of studio co-founder Harvey Weinstein.

"We're going to see the floodgates open," says Mark E. Spund, chair of the employment law practice group at Davidoff Hutcher & Citron. "Whatever misconduct occurred, there isn't anything legally preventing victims from disclosing misconduct."

So, who exactly is free to talk now that the NDAs have been lifted? According to a spokesperson in Schneiderman's office, the agreement only applies to NDAs struck between TWC and its current employees and former staffers. TWC does not have the ability to release individuals from NDAs that were reached with the disgraced mogul directly. Still, additional victims may take legal action — even if they can't against TWC because of the bankruptcy — against individuals including Weinstein, his brother Bob, or others who enabled sexual harassment or assault.

"This is a watershed moment for efforts to address the corrosive effects of sexual misconduct in the workplace," Schneiderman said in a statement. "The Weinstein Co.'s agreement to release victims of and witnesses to sexual misconduct from nondisclosure agreements — which my office has sought throughout this investigation and litigation — will finally enable voices that have for too long been muzzled to be heard."

That covers a wide swath of people, including 85 current employees as well as hundreds of former employees who now work at nearly every studio, network and production company in Hollywood. A onetime staffer who now works at a high-profile Hollywood entity says the TWC NDA is far more restrictive than the standard studio NDA and always instilled fear. Another former executive says the agreement was meaningless.

"I continued to talk to the press," the executive says. "The lifting of the NDA won't change anything for me."

Rather than just talking to the press, Schneiderman's office hopes that former staffers cooperate with his investigation into violations of civil rights, human rights and business laws at the company. The investigation was launched in the fall after Weinstein's alleged sexual harassment and assaults began to hit the public consciousness. Schneiderman hit TWC with a lawsuit in February that scuttled a deal for Weinstein's longtime friend Ron Burkle to buy the studio in a pre-bankruptcy scenario. Sources say Burkle is currently backing Lantern Asset Management's stalking horse bid to buy the studio in bankruptcy (reps for Burkle and TWC did not respond to a request for confirmation).

Although conventional wisdom would indicate that all of the dirty laundry on Weinstein has already been aired given that some 90 women have come forward with claims ranging from aggressive casting couch antics to rape, insiders say there is other nefarious activity that remains buried out of fear of being sued. With a mercurial temper, Weinstein is said to have been physically violent with a number of male staffers, according to two witnesses.

To date, Weinstein has been portrayed as something of a lone wolf, whose predatory behavior went unchecked for decades because it was well hidden and contained to a small circle of victims and fearful assistants who moved on quickly to new jobs. But Schneiderman's investigation, which continues, has hinted at a culture of complicity and took particular umbrage with the fact that chief operating officer David Glasser was poised to run a Weinstein 2.0 backed by Burkle and partner Maria Contreras-Sweet, a prospect hasn't been ruled out, according to insiders.

Other high-profile former executives — like longtime Weinstein No. 2 Meryl Poster — who have never spoken out about Weinstein, privately citing their NDAs, will now be free to speak with Schneiderman or the press. Whether or not they do remains to be seen.

"I think we're likely going to learn more but equally important, I think what we're going to see is corroboration," says attorney Gerard Catalanello, head of Alston & Bird's bankruptcy and financial restructuring group. "There are going to be others who are going to corroborate and validate some of the allegations that have been made. I think that is the upshot of the release of the NDAs. People are going to come forward and feel more comfortable speaking about the facts and circumstances that could substantiate the claims that have already been circulating out there."

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