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Lawyer L. Lin Wood Enjoined from Violating Non-Disparagement Agreement
Enforcing that agreement isn’t an unconstitutional prior restraint, holds the Georgia Court of Appeals.
Noted lawyer L. Lin Wood had worked together with appellees, and when that professional relationship ended, "the parties entered into a settlement agreement which contains the following non-disparagement clause":
Non-Disparagement. LLW PC and L. Lin Wood, individually, agree not to disparage WGW…. Nothing in this provision prevents the Parties from providing truthful information about each other and its members in response to a court order or subpoena, or during any federal, state, or local governmental body investigation or proceeding….
Despite that, Wood, who "has over 181,000 followers on Twitter," and his LLC "accused the Appellees of 'criminal acts, attacked [the Appellees'] characters, ethics, integrity and professionalism to clients and to the general public in multiple forums,' and 'expressed their intention to continue to do so.'" That can be enjoined, held today's opinion by Judge Herbert Phipps, joined by Chief Judge Brian Rickman and Judge Christopher McFadden, in Wood v. Wade:
The trial court considered some of the "limited number of cases nationally which address the interplay between contract rights and the First Amendment." For example, in Cohen v. Cowles Media Co. (1991), the United States Supreme Court considered "whether the First Amendment prohibits a plaintiff from recovering damages, under state promissory estoppel law, for a newspaper's breach of a promise of confidentiality given to the plaintiff in exchange for information" and concluded that "the First Amendment does not confer on the press a constitutional right to disregard promises that would otherwise be enforced under state law[.]"
Similarly, citing the analysis in Cohen, the Colorado Supreme Court later concluded that a breach of contract action for a violation of a non-disparagement clause was not barred by the First Amendment. Pierce v. St. Vrain Valley School Dist. RE-1J (Colo. 1999). Further, in Aultcare Corp. v. Roach (Ohio Ct. App. 2007), an Ohio appellate court rejected the argument that a preliminary injunction enforcing a non-disparagement provision in a settlement agreement constituted an undue restraint on free speech. Similarly, the Connecticut Supreme Court has held that a judicial restraining order enforcing a confidentiality agreement did not constitute a violation of the First Amendment's prohibition on prior restraints on speech. Perricone v. Perricone (2009).
And the Vermont Supreme Court likewise has reversed a trial court order vacating an injunction agreed to by the parties, holding that "private parties may enter agreements that waive their respective free speech rights, and courts may enforce those agreements, without running afoul of the First Amendment." Kneebinding, Inc. v. Howell (2018). The trial court here concluded that these cases establish that "[p]rivate parties are free to enter into contracts waiving rights which the government would otherwise be bound to honor" and that enforcement of such agreements does not constitute an impermissible prior restraint….
[I]n Bryan v. MBC Partners, L.P. (Ga. App. 2000), we considered a similar issue—whether an interlocutory injunction enforcing a restrictive covenant barring the erection of signs without the permission of a homeowner's association committee violates the public policy of Georgia with respect to restraints on free speech. In Bryan, a homeowner hung a sign from the front of his house stating: "Before You Buy A Home In Here PLEASE See US." …
We noted that, while an injunction generally "will not be granted to restrain the torts of slander or libel, however illegal and outrageous the communications," a person nevertheless "may waive or renounce what the law has established in his favor when he does not thereby injure others or affect the public interest." Of particular importance to the instant case, we then stated: "This ancient rule applies to all the private relations in which persons may place themselves toward each other and includes the waiver of constitutional rights." Moreover, we highlighted, "it is the paramount public policy of this State that courts will not lightly interfere with the freedom of parties to contract on any subject matter, on any terms, unless prohibited by statute or public policy, and injury to the public interest clearly appears.". Consequently, we found that the homeowner "was at liberty to waive a constitutional as well as a legal right in a matter of this sort." We concluded that enforcement of the restrictive covenants therefore did not violate public policy regarding restraints on free speech and that the superior court did not abuse its discretion in entering the interlocutory injunction to restrain the homeowner's continuing violation of the restrictive covenants….
The same reasoning applies here. Although the interlocutory injunction in Bryan was based on a restrictive covenant, not a non-disparagement clause, both the homeowner in Bryan and the Appellants in the instant case contracted to abide by a waiver of constitutional rights. In Bryan, the homeowner agreed to a proscription of all signs except as approved by an HOA committee. In the instant case, the Appellants agreed not to disparage the Appellees. Both the homeowner in Bryan and the Appellants here were at liberty to waive their constitutional right to free speech….
The trial court considered the Appellants' argument that "because the present litigation is pending, [they] may comment publicly and negatively about the [Appellees] in any forum, including social media, in statements to the press, and in private communications to clients and third parties" … The key preposition in the [relevant] sentence, "during," is commonly defined as "throughout the duration of" or "at a point in the course of." … The Appellants argue that "[t]he plain meaning of the word 'during' is temporal—i.e., while something is going on." However, this argument focuses solely on the "duration" aspect of the definition and ignores the "in the course of" aspect. The Appellants' interpretation of the third sentence would vitiate the Appellants' agreement not to disparage the Appellees. Considering all of the contract terms together, as we must do, the only reasonable interpretation of the third sentence is that a party may provide truthful information (a) in response to a court order or subpoena or (b) in the course of any federal, state, or local governmental body investigation or proceeding, or, as the trial court put it, "within the confines of a pending government investigation or proceeding." …
The Appellants argue that the injunction will disserve the public interest because "it harms the public's right to hear what [the] Appellants have to say relating to the lawsuit and [the] Appellees." They also argue that the injunction "restricts Mr. Wood's ethical duty to provide full and complete information to his clients and prospective clients who inquire about the ongoing lawsuit that has received considerable media attention, which necessarily includes information about the parties and their claims."
The Appellants' implicit claim is that not being able to speak disparagingly about the Appellees in the context of this lawsuit somehow harms the public interest. However, the Appellants have not elaborated any arguments or cited any legal authority supporting their suggestions that (a) the public has an interest in the Appellants' ability to disparage the Appellees while speaking about this litigation or (b) any such interest is substantial enough to outweigh the Appellees' right to obtain what they bargained for in the settlement agreement. Absent any such authority, we discern no abuse of discretion in the trial court's balancing of these factors in favor of the Appellees' right to obtain what they bargained for, particularly in light of the public policy favoring the enforcement of contracts.
The injunction at issue does not prevent the Appellants from making non-disparaging statements to the media. Nor does it prevent the Appellants from making non-disparaging statements about the lawsuit and the Appellees to their clients and prospective clients. In fact, in the order granting the interlocutory injunction, the trial court explicitly stated that the Appellants may "comment on the litigation, so long as they do not disparage" the Appellees. Consequently, the Appellants have not shown that granting interlocutory injunctive relief would disserve the public interest….