Breaking Down the Legal Do's and Don'ts of Hollywood's "Cancel Culture"

Dos and Don'ts of Hollywood's "Cancel Culture" Illustration by Sol Cotti
Illustration by Sol Cotti

For all the recent noise about the rise of "cancel culture," Hollywood has spent no less than 100 years shoring up its ability to distance itself from the most overt sexists, racists and degenerates among us.

After all, the 1921 criminal prosecution of silent movie star Roscoe "Fatty" Arbuckle for allegedly raping a woman prompted studios to begin inserting "morals clauses" into contracts, giving employers the right to terminate talent for any behavior that prompts "public hatred, contempt, scorn or ridicule." A few decades later, the entertainment industry had to reckon with the Hollywood blacklist, the result of political pressure to do something about supposed communist sympathizers within the creative community's ranks that left some unable to work for years. And few should miss the late-20th century innovation known as the "pay-or-play" deal, whereby A-list actors, directors and producers have their paychecks guaranteed while studios have greater latitude in terminating star talent in the event that they no longer wish to work with them for whatever reason. Plenty of groundwork exists for cancel culture, whether this is a new phenomenon born of heightened sensitivity and the need for consequences or a rebranding of a nebulous concept that some formerly called political correctness. That noted, even those who have mastered the cold shoulder should know it's possible to go too far. Legally speaking, that is.

Before laying down a few Cancel Culture No-Nos, there's one thing the entertainment industry shouldn't fear: violating the First Amendment. That's the part of the Constitution that guards against government censorship. It's strange to see some on the right raise cancel culture hysteria after years arguing that corporations have free speech rights, too (see Citizens United v. FEC), and espousing the viewpoint that liberty should be extended broadly and triumph over perceived discrimination (e.g., bakers who refuse to make cakes for same-sex weddings). Nonetheless, when it comes to running platforms, exercising editorial judgment or even choosing with whom to associate, courts largely have stayed out of the way. To interfere immodestly and without a compelling government interest would be the free speech outrage.

That said, anyone believing Hollywood will never see any legal comeuppance for too eagerly participating in someone's banishment is not being particularly imaginative. There are scenarios and contexts that lend themselves to repercussions. Below is a nonexhaustive list of do's and don'ts for entertainment companies when it comes to cancellation.


How Companies Can Avoid Cancellation Pitfalls 

Don't ignore contracts. Probably the easiest way to overstep is to ignore any written obligations. There will sometimes be debate over the scope of those obligations (e.g., are there any implicit commitments for a studio to actually distribute an artist's work, not just pay them?). Studios, networks and others often give themselves outs in deals when it comes to moral turpitude, but unilaterally canceling a contract is a pretty quick ticket to court. Ask Amazon, which faced a $68 million suit two years ago from Woody Allen after terminating a multipicture deal amid a flurry of negative #MeToo-related publicity. (It settled.)

Don't fire employees for being vocal about workplace conditions. Most times, when an employee crosses the line on social media, that's cause for firing, but not always, especially if an employee is engaged in a concerted effort to improve conditions. "Some workplace speech, even if embarrassing or unflattering to the employer, may still constitute protected activity under Section 7 of the National Labor Relations Act, local wage and hour laws, lawful off-duty conduct statutes, or other federal, state and local laws," says Ian Carleton Schaefer, chair of Loeb & Loeb's New York employment group. "In those cases, employers are at best limited, if not fully restricted, from taking action against employees."

Do be careful about speaking to others about why a termination is happening. If there's more than one company involved — a studio and distributor, for example — and they are collaborating in any way, that may be characterized as a group boycott in a potential antitrust action. As for speaking out publicly about the decision, that certainly will be tempting (especially to mitigate any PR fallout); on the other hand, it opens the risk of a defamation claim.

Don't be overly zealous when it comes to hunting for bad information to justify cancellation. "Employers should not troll their employees' social media to look for issues," says Apalla Chopra, co-chair of O'Melveny's litigation department. "That is not productive, and it could also overreach into employees' zone of privacy." On the other hand, Chopra adds: "Employers cannot play ostrich. If a complaint is brought to them, they cannot ignore it. They need to address it. The touchstone is determining how the off-duty conduct impacts the workplace and whether or not it is legally protected."

Do be consistent. This is probably the toughest to execute, but being consistent ensures that workplace policies are enforced evenly and fairly, lest charges of bias follow. The last thing any company wants to invite is some discrimination claim that they've favored one group over another, whether that's based on gender or racial lines, or on something like political ideology.

For critics of "cancel culture," conjuring a Seussian image of a corrective society run amok is likely the means toward a political end. But those who wish to counter cultural evils but worry about going too far: If cancellations aren't overly punitive, if corporations aren't colluding and exploiting their power, and if there's consistency, fairness and due process involved, would "cancel culture" be less fearsome? If so, perhaps for its critics, it might even become tolerable.

This story first appeared in the March 31 issue of The Hollywood Reporter magazine. Click here to subscribe.