A Confusing Contract Between Journalist and Source

(Bloomberg Opinion) -- About a year ago, several news organizations reported on unflattering remarks attributed to White House Chief of Staff John Kelly about other members of the administration. The controversy that followed was not so much about the comments in question as about their provenance; they were made at an off-the-record briefing for journalists. The reporters who wrote about the event hadn’t attended, but some used as sources other reporters who had, thus sparking a debate about journalistic ethics.

Why do I dredge all this up now? Because a recent decision by the U.S. Court of Appeals for the Seventh Circuit raises the question whether there might be circumstances in which an arrangement of this kind could lead to an action for breach of contract.

To be clear, the case of ABS Global, Inc., v. Inguran, LLC does not involve, even indirectly, journalistic ethics. It is about ... bull semen.

The case arose from a dispute between two companies that both use technological means to sort bull semen into male and female strands, so that those breeders who so wish can use artificial insemination to raise only cows that will give milk. Long story short: ABS sued Inguran on charges of monopolizing the market for separating bull semen. Inguran (to which the court of appeals refers — no, seriously — as “Sexing Tech”) filed a counterclaim alleging patent infringement and breach of contract. Let’s skip the antitrust and patent issues and just stick with the breach.

The contract in question allowed ABS to use certain technology of Sexing Tech, subject to an agreement that restricted ABS’s use of confidential information “provided by Sexing Tech.” Here’s where the case gets tricky. ABS was accused of acquiring Sexing Tech’s trade secrets, not from Sexing Tech but from a third party, who in turn had stolen the secrets from her former employer, a subsidiary of Sexing Tech. The issue the court had to decide was whether the trade secrets conveyed by the third party constituted information “provided by Sexing Tech.”

It’s worth taking a moment to understand the logic of ABS’s position. ABS argued that the confidentiality agreement covered only secrets conveyed directly from Sexing Tech under the contract, not secrets it obtained through other means. The court of appeals understandably rejected the claim: “The jury’s finding that this amounted to a breach by ABS of the confidentiality agreement ... rested on a proper understanding of the contract language.”

So how might this analysis apply to journalism? It’s hornbook law that a reporter’s deal with a confidential source is a contract, and that the First Amendment offers little protection in the event of breach. And if we slightly rearrange the facts of the story about Kelly that opened this column, it’s easy to see how, under the court’s approach in ABS Global, a breach could occur.

Let’s imagine that Journalist interviews a source — call her Source A — who insists that the conversation be off the record. In fact, Source A is explicit, telling Journalist: “You can’t use any information provided by me.” Journalist writes nothing about the interview with Source A, but later confirms Source A’s account with Source B, and publishes a story based entirely on what Source B has to say.

But now suppose that Source B got his information from Source A. Under the court’s analysis, the information from Source B was “provided by” Source A. Given that this information is disclosed in Journalist’s story, it would appear under this analysis that Journalist has breached the agreement with Source A not to use any information that she provided.

How do we get around this difficulty? The easiest answer is to explain to the court that the rules of “off the record” are well understood, and do not bar the use of the information if Journalist reporter can confirm it elsewhere. Thus there is no breach.

I suspect that a majority of judges would find this defense entirely adequate, and probably in most cases they should. But here one must append a few words of caution. The various rules encompassed by the various terms used by reporters are not universally understood — least of all by sources.

A journalist once called me to ask for certain information off the record, but made not the slightest effort to explain the meaning of the term. Had I chosen to answer the reporter’s questions (I didn’t), it’s hard to imagine that a reasonable court could find later that I should have known the significance of the phrase.

And it’s not just sources who may be confused. Even the term “off the record” — the description of Kelly’s briefing for reporters — turns out to have disputed meanings. Here’s journalism professor Roy Greenslade in The Guardian: “reportable as long as the source is not identified.” Here’s the Associated Press: “The information cannot be used for publication.” Full stop. It’s hard to imagine that Kelly meant — or that anyone else who goes off the record with a reporter means — “You can’t publish this yourself, but you’re free to share it with your journalistic colleagues, and they can.”

I’m not criticizing the journalists who repeated Kelly’s remarks to their colleagues or others who make similar choices. But a healthy caution is warranted. The point of the ruling in the Sexing Tech case is that a breach of a promise of confidentiality will not be excused by shenanigans involving the details. Reporters should remember the very old and sensible rule that when confusion arises about the meaning of contract terms, they’ll be construed against the party that comes up with them. One day an off-the-record source will sue a journalist for breach, not for disclosing her name but for sharing the contents of the interview with another reporter. When that occurs, it may not be sufficient for the journalist to say, “But that’s how my colleagues and I understand the term.”

The solution is to do what many news organizations already require: Stop using phrases capable of many different understandings, and ensure instead that the ground rules are clearly spelled out — both to the source and to the reader. This isn’t just a matter of good ethics; it may soon be a matter of good law.

Even more confusing, perhaps, is the term “deep background.” It’s used all the time, but we’re told by the New York Times that “many journalists and sources have competing definitions.” The estimable Michael Gardner once told the American Journalism Review, “It means different things to different people. I’ve never understood it."

The same difficulty can arise when the source rather than the reporter imposes the terms. In a season 6 episode of “The West Wing,” Josh Lyman, the president’s deputy chief of staff, insults a blogger after first telling her that the conversation is off the record. She posts every word nevertheless. Another White House staffer explains to Lyman that the blogger is not a journalist and is thus not bound by journalistic conventions. I’m not sure the staffer is right, but the confusion over meaning is clear enough.

See, for example, page 5 of this document.

To contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Stephen L. Carter is a Bloomberg Opinion columnist. He is a professor of law at Yale University and was a clerk to U.S. Supreme Court Justice Thurgood Marshall. His novels include “The Emperor of Ocean Park,” and his latest nonfiction book is “Invisible: The Forgotten Story of the Black Woman Lawyer Who Took Down America's Most Powerful Mobster.”

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