Attorneys for Janel Grant, Vince McMahon and World Wrestling Entertainment have three weeks to come to a settlement in private arbitration.
This is different than the arbitration that was to be argued in a previously scheduled June 16 hearing in Connecticut District Court.
The agreed to arbitration, which led to Judge Sarah F. Russell canceling the motion hearing and giving the parties 21 days to come to an agreement, will be held confidentially. There will be a status report filed by both sides in 21 days to inform the court if the two sides reach an agreement.
This arbitration is held at the consent of the defendants and plaintiffs, with agreed-upon rules and arbiter.
The arbitration that McMahon and WWE argued for in court filings was based on the non-disclosure agreement Grant signed after the end of her tenure at WWE.
That arbitration would have been held with an arbiter of WWE’s choosing and based on the parameters in her NDA. WWE and McMahon have argued Grant should be forced to go through this arbiter in this case and not federal court, despite the sex assault and sex trafficking allegations that have filled two complaints and various exhibits provided by the defendants.
Lawyers for WWE and McMahon have argued Grant violated the NDA, but didn’t specify how, during various filings in the court in support of arbitration. Defendants attorneys also said court precedents and existing law argues that Grant should be forced to consent to the arbitration in that agreement.
Grant and her attorneys have argued that federal law, such as the Speak Out Act and the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, back her argument in declaring the arbitration clause illegal. The defendants argued the two federal laws don’t apply to Grant and are only applicable to arbitration clauses and NDAs signed by employees at orientation and before alleged assaults and harassment occurred.
As previously written at SEScoops, the timing of a possible settlement in the Grant case would come before the previously scheduled June 16 arbitration hearing. After a ruling in that hearing, the losing side would be at much less leverage to argue a settlement. Coming to a settlement before the hearing has both sides on more equal ground.
Another factor is the appeals and rulings that are bound to occur following the arbitration hearing. The Speak Out Act and the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act are recent legislation with few precedents weighting in on how these laws should be viewed in court. Any ruling on the arbitration clause would lead to various appeals for either side, extending the case into the future.
This is a no-risk for Grant and the defendants. They can work out on a possible solution for 21 days. If they haven’t reached an agreement, they can resume the case. The upside, they may reach a settlement.
Parties in WWE Ring Boy lawsuit ask for extension
Both the defendants and plaintiffs in the WWE Ring Boys lawsuit have asked the court for an extension to work out a joint protective order.
The order would conceal the identifies of the defendants in the case. The eight individuals are males who worked in WWE from during the 1980s and were allegedly sexually assaulted and trafficked while working for the companies as children.
The eight are suing based on the Maryland Child Victim’s Act, which lifted the statute of limitations on filing negligence complaints in sex cases involving children. Vince McMahon, Linda McMahon, TKO and WWE are the defendants in the case. Maryland’s Attorney General joined the case after the defendants argued the Child Victim’s Act is unconstitutional according to federal law and state law.
Maryland’s Supreme Court previously ruled the law was constitutional last year.
Will TKO have to foot the entire Shareholder settlement bill?
Two days before it was scheduled to begin on June 8, the WWE Shareholder trial ended in a settlement by both parties.
The settlement came days after Delaware Court of the Chancery Judge J. Travis Laster sanctioned several executives with WWE and TKO for destroying information material to the trial. He found the executives had deleted Signal messaging app chats and changed deletion settings against orders from the court, WWE general counsel and the Department of Justice.
Businesses and corporations carry liability insurance in case they are sued in civil court. This pays for their defense team and possible settlements and penalties.
But violating evidence rules may mean the insurance is off the hook. There are exceptions in most polices as to whether insurance will cover defendants in these cases. Usually it involves fraud or a breakdown at the top of the agency or company. Mass violations of evidence rules on electronically stores information may be a problem.
This would mean TKO and its executives could be personally on the hook for the estimated nine-figures it could potentially owe in a settlement.
How would the defendants have argued a Shareholder case?
In a statement to SEScoops, sources close to Vince McMahon minimized the loss shareholders had, stating, “the deal made the shareholders an absolute fortune.”
This line goes to how McMahon, TKO and other defendants would have argued the case.
Despite the violations of evidentiary rules, the sanctions, the communications that McMahon had decided Endeavor was his choice for a merger before the sale was even announced, the defendants would point at the growth in stock price from around $100 to around $220 at its peak.
Civil trials are about injury. Someone is injured, they go to court and sue. The court decides if the accused party is liable, if an injury occurred and if the court can offer the plaintiff relief.
The plaintiffs have argued WWE took the lesser of deals, which included mostly stock with Endeavor. This cost them money. The defendant argument is the plaintiffs made more money after the sale, so no injury – yeah, there was a foul, but there was no harm.
Is this over? If TKO has to eat a settlement out of its coffers, then isn’t that injury for shareholders to sue again? The settlement came after the court sanctions. Shouldn’t the executives be culpable for what happened in court?
What’s the fallout for other cases? Janel Grant has posted about anonymous letters that were part of discovery in the case. The Ring Boy plaintiffs have also made it clear they’ll seek discovery from other cases, such as the Shareholder suit and the Grant suit. Since it was Grant who was at the center of the Shareholder suit, the discovery in the merger lawsuit could play a factor if the Grant case goes to trial.