The Case of the Elusive “Inclusion Rider”

During the Academy Awards show last Sunday, the “Best Actress” winner Frances McDormand unleashed on the world the phrase “inclusion rider.” That prompted a tsunami of chatter on the subject, including this by the Washington Post and this by Vanity Fair.

But I was interested in the rider itself, not explanations. So I asked around, and I asked on Twitter, but no one had a copy. I emailed one of the people responsible, Kalpana Kotagal, a civil-rights employment lawyer at Cohen Milstein, but I didn’t hear back.

I ended up having an exchange on Twitter with the Annenberg Inclusion Initiative (@inclusionists), a think tank at the University of Southern California. One of the people behind it is communications professor Stacy Smith, the other person responsible for the inclusion rider. What they told me was puzzling. They said “Lots of folks have the language,” that it’s available for industry use, and anyone who wants a copy can ask for it by emailing them, but they were unwilling to send me a copy. If they’re so keen to have the entertainment industry adopt this approach, and if they’re sending copies of the rider to “lots of folks,” why not send it to me?

The answer is to be found in this article by entertainment lawyer Jonathan Handel in The Hollywood Reporter. Here’s the relevant bit:

Smith first introduced the idea in a 2014 Hollywood Reporter guest column, but it lay mostly dormant until this year’s Oscar night. The media scholar says she’s not aware of any actors having used the rider, and entertainment attorneys say they’re unfamiliar with it. “Seen none. Have none,” says a top talent lawyer.

Yet Smith and Kotagal aren’t sharing the clauses they’ve crafted. “The language is for attorneys, actors and content creators — we don’t give it out,” says a colleague of Smith’s. “We want to avoid public negotiation,” says Kotagal, but the Washington-based attorney may also see secrecy as a ticket to Hollywood legal work. “Civil rights lawyers have a right to make money,” she notes.

So much for “lots of folks.”

I see two problems with Smith and Kotagal’s approach. First, it’s at odds with the way people create contracts in the information age. Once deal language starts being used, it starts being copied. Anyone who prepares distinctive contract language can claim copyright protection, but all that’s required to avoid a claim of copyright violation is to copy the idea without copying too much of the wording. (See my 2006 article on the subject.)

So it’s perhaps naive to think you can build a revenue stream by keeping contract language close to your chest. Instead, you get business through your expertise. Marty Lipton’s highly lucrative poison-pill legal work wasn’t based on his having access to the relevant Word templates—the documents in question quickly became public. Instead, clients sought him out for his expertise.

And second, there would seem to be a conflict between advocating that the industry adopt inclusion riders and wanting to limit distribution of inclusion-rider text. Getting the text out there might help prevent the inclusion rider from disappearing from discussion as rapidly as it arrived.

By the way, I have no reason to think that Smith and Kotagal’s inclusion rider is a model of contract drafting. In our Twitter exchange, @inclusionists said, “We had a civil rights attorney and expert on hiring and discrimination craft the language. Then, it was vetted by multiple entertainment attorneys and business affairs folks.” But what seems to be missing is any input from a contract-drafting specialist.

The Difference Between Selling Widgets and Buying Widgets

You’re general counsel of Widgetco, the world’s leading supplier of widgets. When anyone needs widgets, they come to you!

But you’re also a big buyer of widgets. The primary raw material for widgets is … widgets!

You have one contract template for selling widgets and another for buying widgets. How do they differ? Bear in mind we’re not talking about, say, computer equipment—just widgets.

An Efficient Way to Link Statements of Fact to Termination Provisions

In recent consulting projects I’ve found myself revising client contracts that address issues as both statements of fact and grounds for termination, as in this made-up example:

Widgetco states that the Widgets are in good working condition.

Acme may terminate this agreement if the Widgets are not in good working condition.

My book The Structure of M&A Contracts (here) discusses how to make statements of fact and obligations in an M&A contract flow efficiently through the rest of the contract. Inspired by that, I’ve found myself experimenting with the following sort of provision as an alternative to saying the same things twice in commercial contracts:

If one or more of the following occurs, Alpha may by notice to Baker terminate this agreement , with termination occurring ten days after Baker receives that notice:

a statement of fact made by Baker in this agreement could not be made again on any date after the date of this agreement without being materially inaccurate[, except that if Baker is capable of remedying the circumstances causing a statement of fact to be materially inaccurate, then Alpha shall not terminate this agreement in accordance with this clause X unless Alpha notifies Baker of those circumstances and Baker fails to remedy those circumstances no later than 10 days after Apha so notifies Baker]; …

What do you think?