Famed Hollywood Journalist Going to Arbitration over Non-Compete Assertions
Thursday, November, 21, 2013
Nikki Finke, the founder of the successful gossip and entertainment news web site, Deadline Hollywood, has been ordered to arbitration with her former employer Jay Penske, current owner of the Deadline Hollywood site. After selling the site to Penske, Finke clashed frequently with the new owner and eventually left the company in November 2013, announcing she would be launching her own competing website, NikkiFinke.com.
Penske, however, has claimed that Finke cannot do so, as she has a non-compete clause in her contract with his company, the Penske Media Group. That contract is in effect until 2016, according to Penske. According to Penske, numerous attempts to resolve their differences have been attempted to no avail and thus they have no options left but to compel Finke into arbitration.
The relationship between Finke and Penske was initially positive after Penske acquired Deadline Hollywood in 2009. Deadline Hollywood remained run by Finke, and expanded staff under the new ownership. However, when Penske Media Group bought the print newspaper Variety, the relationship soured. Finke claimed she had been promised a large leadership role in the paper. When that did not come about, she used her online platform – owned by Penske – to attack both her boss and the paper. After many attempts to heal the rift, Penske let Finke go.
Finke said in a statement that the matter was “for the lawyers to handle,” implying that she would not be immediately complying with the arbitration notice. However, California courts have recently been very consistent with their support of arbitration clauses and rulings. The expectation is that Finke will find herself compelled to arbitration if her contract does in fact contain both a non-compete clause and a binding arbitration clause, and will thus be prevented from launching a new web site until 2016 at the earliest.