We Asked an Actual Lawyer if Beasley has a Case Against Anthony Gargano and All City
As you’ve probably heard, Beasley filed a lawsuit against Anthony Gargano and All City. They’re alleging that Cuz breached his contract by working with All City to build a Philadelphia staff and lead the network’s expansion into a fourth market.
“Under both his Agreement and the common law duty of loyalty, Gargano is prohibited from providing services to a competing business while he is employed by Beasley. Despite this clearly defined obligation not to compete with his current employer, Gargano notified Beasley on September 11, 2023 that he intends to do precisely that: Gargano advised Beasley that he intends to continue producing content for The Fanatic, but also that he has accepted employment with All City where he will perform on podcasts, write articles, and likely create other forms of Philadelphia sports-focused content that will compete directly with Beasley. In other words, Gargano intends to work simultaneously for two competing business to provide sports coverage and commentary to the Philadelphia marketplace, targeting the same audience and competing for the same local advertisers on each platform.”
We’ve spitballed on the topic, but at some point it was a good idea to call on an actual expert, so we got in touch with Brian Newman, an associate attorney with the Ardmore-based Rogers Counsel, which represents small-to-medium companies in these kinds of cases. In a brief Q/A, he provided some insight on this lawsuit (with the caveat that we’re going by the suit’s allegations, and we don’t have a copy of Cuz’s contract) –
Crossing Broad: Let’s start with your general, macro-level view of the suit and whether or not Beasley has a case here.
Brian Newman: I do think Beasley has a case here, provided everything they say in the complaint is true. We can’t see the actual employment agreement because it’s sealed, but according to their allegations, he signed a new agreement with a competing entity to provide the same services to the Philadelphia market. A non-compete like that is enforceable, so I think Beasley definitely has a case here.
CB: It seems like there’s multiple things going on here. You have the non-compete part of the suit, but they also talk about the solicitation of other 97.5 employees and the idea of “exclusivity,” where Anthony is expected to work for them and nobody else. It looks like Beasley is coming at this from a few different angles.
Newman: Right, so with Gargano, it looks like they’re saying there’s a non-compete, but that he also has a ‘duty of loyalty’ to the company. Without seeing more, I can’t add more to that, but usually someone has a duty of loyalty to their company if they are a shareholder or they own an interest. It really depends on the contract. As far as the portion about recruiting others to go with him, it seems like others referenced in the complaint (RE: Devon Givens) were under similar employment agreements, so I think that’s Beasley’s strongest claim, that they had non-competes in their employment contracts and they left anyway.
CB: The idea of competition is certainly an arbitrary one. We could ask ourselves if working at a radio station is the same as writing for a website. My thought, generically, is that we’re all under this umbrella of sports content, but I’m wondering how the courts define this, if at all.
Newman: That’s a good question, and that’s probably going to be one of their defenses, that All City doesn’t provide the same service as the Fanatic. I think 97.5 is probably going to respond and say ‘hey, what Anthony and these other employees are doing is taking their audience from sports radio and bringing it over to sports writing (and podcasting and streaming),’ when the Fanatic also produces similar.
CB: I always look at it like the economic pie. If you have $15 and you’re spending it on baseball cards, okay. But then football cards come out and there’s more to choose from, though you have the same amount of money. In that sense, we’re all competing against each other for a sports content audience that only has so much time and money to give.
Newman: I get what you’re saying. I think they are going to view it as competition just because the Fanatic can say they produce (similar) content as well. And let me clarify that it’s Gargano who is under the agreement. All City probably is going to have a much easier time in this lawsuit. It’s Gargano and the other employees who are under these agreements. They’re the ones who really have the obligations.
CB: People say these typically end in settlements. Is that accurate, and what would a hypothetical settlement look like?
Newman: They do end in settlements all the time. It really depends on the interest of the business. Sometimes they’ll say to the employee, ‘hey, you stop working at the company and we’ll stop coming after you, or won’t sue you for damages.’ That’s what you see a lot of times. Or they’ll say they can continue working at the company, but there will be some other kind of requirement that’s tailored to the business feeling more comfortable, like ‘hey, you won’t steal our clients,’ almost like a non-solicitation agreement (after the fact). Here though, I would assume they’re going to want Gargano to stop working at All City because they’re obviously pretty concerned about the effect it will have on their audience.
CB: Let me circle back to non-competes, because we’ve been conditioned to think they’re generally flimsy. If you leave a company, do they have the power to prevent you from working? That’s what we think of, but it’s not really the case here. Beasley is saying that Cuz was building a staff and contributing to All City while under contract with them.
Newman: I think they’re saying both, and I’ll tell you this – generally speaking, non-competes are enforceable, provided they’re found reasonable. They’re looking at reasonableness or geographic scope, length of time, and the extent of the business that you’re trying to stop someone from working in. If his non-compete said he can’t work anywhere in the United States for the next year, they’re never going to enforce that. It takes away his right to ever engage in any business. Here, we can’t see the non-compete, but I assume it says he’s not going to work in the Philadelphia region on any kind of sports broadcasting or sports news publication. Something in that kind of scope. So to go to your question, yes, it’s definitely enforceable. I think a lot of people have the misconception that non-competes are never enforceable when they’re actually pretty strong contract provisions that are often enforced by the court. Most smart lawyers know how to draft those so that they are upheld by the courts now.
CB: Spitballing here, I personally found it curious when All City did their launch, that Anthony’s name and image were featured on the teaser video. Coming soon, Anthony Gargano, is what it said. I wonder if that’s going to harm them in this litigation and if Beasley can leverage that and say ‘hey, here they are flaunting the hire of this guy who is under contract with us.’
Newman: As far as All City, I don’t think they have too much to be concerned about. They are their own business and they are allowed to compete with Beasley. They have their own interests. I think it’s going to be harder for Beasley to find All City liable, but for Gargano himself, I don’t think that was smart at all. I actually was shocked reading that part. You would think he’s communicating with counsel. You would think he understood his obligations to each of the companies and played it out better. It seems, according to the lawsuit, as though he blindsided the Fanatic and I don’t know if that was a good way strategically to go about it. I have questions about that. I wonder if he was consulting with counsel or not. That’s kind of reckless.
CB: Beasley is the plaintiff obviously, but in the suit Gargano and All City are listed separately. Anthony is listed as an individual. You’re drawing a line here between Anthony and All City.
Newman: Exactly, and I think the claims against Anthony himself, provided everything they say is true, those are probably stronger than the claims against All City. All City is kind of allowed to go and poach talent. There are certain parameters where you don’t want to do anything illegal, but they don’t owe the Fanatic any obligation not to try to hire its employees. I guess the best claim against them is intentional interference with a contract relation, that they’re going in knowing that the employees are under contract and trying to take them. There are defenses to those types of claims, freedom of speech and whatnot. It’s not easy to hold someone liable for doing something like that, and I think they’re going to have a hard time doing it.
Never a dull moment in Philly sports, or media. This is a developing story!