3:15pm PT by Eriq Gardner
Harvey Weinstein Employment Deal Becomes Public Record
Six women who say they were victims of Harvey Weinstein's sexual misconduct scored a victory Tuesday when a judge overseeing the Chapter 11 bankruptcy of The Weinstein Co. lifted a stay on their lawsuit. The judge also ruled that Weinstein's employment agreement should be unsealed, and the women promptly lodged it into the public record.
The agreement (read here) reveals Weinstein was earning a base salary of more than $2.6 million and 25 percent of annual net profits. He was also under obligations to reduce overhead at the company by tens of millions of dollars.
But the most controversial aspect of the employment agreement pertains to what Weinstein would need to pay the company if his misconduct resulted in TWC having to make settlements for his behavior.
The provision has been rumored about for months ever since TMZ carried a story titled "Harvey Weinstein Contract with TWC Allowed for Sexual Harassment."
That's not quite accurate, but here's what the "Code of Conduct" section states:
"You and the Company recognize that, in addition to being indemnified for the amount of payments the Company is obligated to make as a result of your misconduct, such misconduct can cause significant damage to the Company which is difficult or impossible to measure. Accordingly, if your misconduct results in the Company making an Obligated Payment to a person damaged by such misconduct, in addition to the indemnification set forth in subparagraph i.(a) above, you will pay the Company liquidated damages of $250,000 for the first such instance, $500,000 for the second such instance, $750,000 for the third such instance, and $1,000,000 for each such additional instance."
This section is important because Louisette Geiss, Katherine Kendall, Zoe Brock, Sarah Ann Thomas, Melissa Sagemiller and Nanette Klatt — the women who are attempting to lead a class action lawsuit — are trying to establish knowledge and awareness on the part of TWC's board and how the company is vicariously liable for Harvey Weinstein's actions.
Attorneys for TWC argue the controversial contractual provision hardly establishes ratification or endorsement of his behavior and warned the judge Tuesday at a hearing that it would be a distraction for the debtors.
U.S. Bankruptcy Judge Mary Walrath rejected those arguments and granted a relief from the stay. Her decision came on the same day that Weinstein was in New York, where he was arraigned and pleaded not guilty in a criminal case alleging that he raped two women.