Media companies frequently rely on “leaks” to generate breaking news and to advance existing storylines. But what happens when a media company’s own employee is the leaker? And how about when contents of the leak advantage competitors?
As first reported by Andrew Marchand of The New York Post, ESPN has fired Adnan Virk, a highly-regarded football and MLB host. Marchand, who on Monday discussed his reporting of Virk’s firing on the SI Media Podcast with Jimmy Traina, reports key details from an internal investigation at ESPN. The probe found that the 40-year-old broadcaster had “leaked confidential company information” on multiple occasions. In a subsequent story, Marchand detailed how Virk—who recently signed a four-year employment contract—was abruptly told by his bosses on Friday to pack his belongings. He was then hastily escorted out of the network’s headquarters in Bristol, Connecticut.
ESPN was prompted to act after the “latest” instance of Virk’s alleged leaking. Virk is accused of disseminating proprietary information that was published in a Jan. 28 story authored by Ben Koo of Awful Announcing. Koo’s story centers on ESPN’s plans for baseball studio programming in the 2019 season. Koo reveals that while ESPN contemplated bringing back Baseball Tonight as a daily program, it ultimately decided against the move.
In the story, Koo explains two reasons for ESPN’s decision. The first relates to MLB–ESPN negotiations, and the second to ESPN’s ratings projections. It’s clear that in researching his story, Koo relied on at least one source who was privy to ESPN’s internal discussions. To that point, Koo writes that "Awful Announcing has learned that ESPN...” In journalism, the two-word phrase "has learned" typically refers to confidential information shared by an inside person on background (meaning not for attribution and usually not as a direct quote).
ESPN’s ability and methods to prove that Virk is the leaker
It’s not clear how ESPN concluded that Virk is responsible for this particular leak or any other. Marchand reports that Virk partook in, or was at least aware of, a recent conference call in which network executives discussed Sunday Night Baseball and related programing topics. It is extremely unlikely that Koo would volunteer the identity of his source to ESPN’s investigators. Journalists have an ethical duty to preserve sources who only share information on the condition of anonymity. In some instances, journalists also have legal duty to protect a source’s anonymity. As the U.S. Supreme Court held in the 1991 decision Cohen v. Cowles Media Company, a reporter can be sued for breach of contract when he or she breaks a promise to maintain the confidentiality of a source.
ESPN also has no legal capacity to force Koo or his Awful Announcing editors to reveal the source’s identity. ESPN is a private company that lacks subpoena power. Likewise, it contains no contractual or regulatory authority over Awful Announcing, which prides itself as “sports fan web site” that is “in no way affiliated with any media organization.”
Of course, ESPN is not without a healthy dose of investigatory clout. It is, after-all, a multi-billion-dollar news organization that regularly breaks important news stories. Even without that skillset, ESPN possessed several ways to investigate Kirk. For instance, ESPN’s information technology department had access to Virk’s emails sent through his ESPN.com email address. The IT department could also gain access to any work computer or handheld device that Virk used. With that in mind, Marchand’s report indicates that ESPN confiscated a company cellphone from Virk’s possession. This suggests that the network might have had access to his cellular data, at least that which was apparent on the device itself. It’s also possible that ESPN spoke with witnesses who may have observed Virk engage in conduct that the company concluded was indicia of leaking.
ESPN’s likely contractual powers to fire Virk
Any employer can “fire” an employee who is under contract. To do so, the employer simply has to notify the employee that the company will no longer honor the contract. The employer, in other words, intentionally breaches the contract.
The extent to which the employer owes salary and other benefits to the fired employee is often a far more contentious topic. That could prove true with Virk, who The Athletic's Richard Deitsch reports is pursuing an attorney to represent him in what could become a lawsuit against ESPN. Later on Monday, USA Today’s A.J. Perez noted that he had interviewed Virk about his firing and that Virk declined comment “on the advice of counsel”—a choice of words signifying that Virk has now retained an attorney.
According to Marchand, Virk is not being paid severance. This fact, along with the hostile nature of the firing, indicates that ESPN fired Virk “with cause.” A “with cause” firing is one where the employer claims that the employee violated the terms of the contract in such a meaningful way that the employer is empowered to terminate the remainder of the contract, usually without financial repercussion. An employee who breaks the law or engages in unethical conduct is ripe for a “with cause” firing. In a “with cause” (sometimes called “for cause”) firing, the contract typically instructs that the employer does not owe the fired employee any remaining contractual payments, or at least owes him or her less than would arise in a “without cause” firing.
To that point, when an employer cans an employee “without cause," the employer doesn’t claim that the employee failed to satisfy contractual obligations. It simply decides to replace the employee. Often, the employer must pay out the entirety or a significant portion of the remainder of the contract. The amount of money owed would be determined by the contract’s liquidated damages provision, which establishes the amount of payment depending on the type of breach and the designation of firing.
Given the nature of the allegations against Virk, ESPN likely contends that he impermissibly misappropriated and divulged trade secrets. Such secrets refer to an employer’s classified strategies and confidential materials. An internal discussion about both a broadcasting company’s programing strategy and the contractual relations between that company and licensor (i.e., MLB selling a license to ESPN to broadcast MLB games) contains insights that impact ESPN’s business operations.
For instance, if ESPN rival Fox—which also broadcasts MLB games and which recently signed a $5.1 billion deal with MLB—learns of ESPN’s plans for Baseball Tonight, Fox could conceivably use the sensitive information for strategic gain. The information could also be used by MLB in determining the parameters of its relationship with ESPN. This is particularly true given the extent to which MLB uses its own MLB Network in lieu of ESPN and Fox to televise games.
Even if the disclosure of ESPN’s internal thinking on baseball broadcasts does not appreciably advance the interests of Fox or MLB at the expense of ESPN, ESPN might still object to Virk possibly helping Awful Announcing. If Virk disclosed confidential information to Koo, and Koo then wrote a story on a sports news website that is outside of ESPN’s network, ESPN could argue that its own employee helped a competitor. While influential in the media world, awfulannouncing.com does not generate nearly the traffic of ESPN.com. It also provides very different kinds of content. Yet both websites vie for the attention of sports readers, meaning that even if they aren’t “rivals” they are to some degree competitors for the finite time of sports fans who surf the Internet—and advertisers who decide how much to pay these websites take stock of that. ESPN’s executives are likely also aware of Awful Announcing’s sometimes critical coverage of ESPN, a point that may have led to them find Virk’s alleged leaking to Awful Announcing even more annoying.
With these points in mind, it’s worth considering Virk’s employment relationship with ESPN. Obviously, his contract is a private document and not available for review. However, employment contracts, including for broadcasters, normally forbid employees from disclosing “confidential information.” This term is expansively defined to include various types information that are generally not known to the public. Such information could reflect concepts, techniques, marketing plans, strategies and ideas for future projects. If an employee reveals such information, the contract might express that the employer can terminate the remainder of the employee’s contract “with cause.” Sometimes even after a contract ends, a former employee is forbidden—upon threat of a breach of contract lawsuit—from disclosing trade secret information. This prohibition typically arises in a confidentiality/non-compete clause.
ESPN has also promulgated company policies that might have prohibited leaking. Such policies govern the workplace environment and mandate compliance with relevant laws, regulations and ethical norms. It’s possible that ESPN contends Virk has breached such policies, in addition to his contract.
Connecticut law, which most likely governs Virk’s employment contract with ESPN, also contains legal instruments that would forbid Virk from disclosing trade secrets. The state has adopted the Connecticut Uniform Trade Secrets Act, which defines a “trade secret” as including production budgets. Also, the Supreme Court of Connecticut has enunciated that employees owe a duty of loyalty to employers to not share trade secrets learned within the course of their employment.
Virk’s potential legal claims against ESPN
It appears that Virk intends to contest the manner in which he was fired. As explained above, Virk won’t be able to reverse his firing. ESPN had every right to intentionally breach its contract to him, just as it could cut cords with any other employee who is under contract. Instead, Virk will likely focus on making ESPN pay him more money—and perhaps a lot more money if the network has fired him “with cause” and without an obligation to pay him the remainder of what is reportedly a seven-figure deal. In a legal action, Virk would also seek to restore his professional reputation, which has been tarnished by not only being fired but by being linked to unethical if not unlawful conduct.
The first step for Virk is to collect any evidence pertaining to ESPN’s allegations. This means all texts, emails, phone records, handwritten remarks on notepads connected to the claims—literally everything. As evidenced by the severe methods employed by ESPN to quickly remove Virk from the building, it’s clear that network officials tried to limit Virk’s ability to gather workplace materials. The company would justify such steps on grounds that Virk had, in its view, already damaged ESPN through his alleged disclosure of proprietary information. From this perspective, ESPN wanted to limit the possibility of further damage and so it needed to extract Virk with great haste. Still, given the extent to which we store data in multiple venues, such as through cloud computing, there’s a decent chance Virk possess some of the evidence he might need to challenge ESPN.
Whether Virk denies ESPN’s accusations remains to be seen. According to Perez, a source told him that Virk was “not forthcoming” to ESPN. This suggests that Virk either denies the core allegation that he is the leaker or insists that his leaking doesn’t violate the terms of his contract.
To that end, Virk might argue that what ESPN portrays as a disclosure of propriety information is in reality an accepted practice within the industries for broadcasters and journalists. Broadcasters and journalists have been known to sometimes share confidential information, including about their employer, in hopes that it might be considered a trade for other confidential confirmation.
Alternatively, Virk might insist that the leaked information should not be considered a trade secret or at least not one that warrants a firing. Virk might maintain that the Koo article merely confirms that ESPN would not be making any changes. The article notes that ESPN was simply staying the course and would not be making programing alterations related to Baseball Tonight.
To bolster this point, Virk might refer to Connecticut’s statute titled “Liability of employer for discipline or discharge of employee on account of employee’s exercise of certain constitutional rights.” This statute forbids employers, including private employers, from firing employees on account of those employees exercising their First Amendment right. Perhaps Virk could argue that information about ESPN’s programming is clearly newsworthy and thus First Amendment protected. However, this would likely be a weak argument. The statute only protects the employee if “such activity [by employee] does not substantially or materially interfere with the employee's bona fide job performance or the working relationship between the employee and the employer.” ESPN would argue that while its internal discussions may be newsworthy since they are of interest to readers, disclosure of them by a company employee would clearly interfere with the employment relationship between ESPN and the employee.
Virk might also charge that ESPN has “unclean hands” in that ESPN appears to have leaked confidential information in the past, including in regards to significant layoffs. “Unclean hands” is sometimes an effective defense in a trade secrets case. Here, though, it’s unclear if there is any connection between the company officials involved in the conference call about Baseball Tonight and previous leaks by ESPN employees.
In any lawsuit, Virk would refer to these and other points in attempting to portray ESPN as breaching the terms of his employment contract. Virk would maintain that the breach occurred in a way that, under a liquidated damages provision, ought to guarantee Virk higher payment. Virk might raise other claims, including for intentional infliction of emotional distress. He could contend that ESPN escorting him out was designed to humiliate him in front of his peers and, once details of his rushed ouster were revealed to the public, the national audience as well. ESPN, of course, would try to rebut this point by stressing that his hasty exit was designed to minimize opportunities for him to take company information with him. In addition, if ESPN makes public comments about Virk that indicate he committed wrongdoing, he could sue the network for defamation. If the comments are true, however, then such a claim would fail.
Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.