Influencer Management Agreements: Confidentiality and Conflict Resolution

Minisode Eight of Season Seven and the seventh and final part of our special series about Influencer Management Agreements. In this minisode, Jon continues our review of influencer management agreements with a look at the obligations after the termination of the agreement, including confidentiality and your options for conflict resolution.

______________________________________________________________________________

A transcript of the episode follows:

This is the eighth minisode of the seventh season of The Creative Influencer podcast.  Today we’re going to talk about ongoing obligations after the  termination of influencer management agreements, including confidentiality and non-disparagement.

Finally, we’ll discuss conflict resolution. In other words, how are disputes between a manager and influencer resolved?

Termination

As we discussed in the last minisode, termination is like a legal divorce. And just like a divorce where there aren’t kids involved, the big issue is money.

So what are the obligations once contracts end? As we previously discussed, you’ll pay the manager a percentage of whatever the commission is for the deals they bring you. Almost every agreement will have language stating, after the influencer contract ends for a period, any deal that they’ve got you that continues after the agreement ends, a percentage will still go back to them.

Confidentiality

Another obligation during and after the term of the management agreement is confidentiality. This one is straight-forward, and will read something like this:

“Before, during and after the Term of this Agreement, neither party will disclose to any third party any of the terms and conditions of this Agreement or any other agreement negotiated and/or entered into by [the Influencer] in connection with this Agreement except as may be necessary in order to comply with any legal or regulatory requirements.”

To unpack this just a bit, this means that the work of the manager and influencer is mostly held confidential. This protects both parties; it helps the influencer maintain brand relationships and helps the manager foster those relationships.

Another term to note here is that disclosure of information to third parties, including press releases, are also only allowed with prior written consent of both parties. This means that managers can’t disclose that they helped find a brand deal as part of their own marketing or promotion. It also means that Influencers and Managers both cannot talk publicly about the inner workings of their relationship. This, again, helps both sides. It helps protect confidential and proprietary information that either side has learned about how the other side does business. It also means that any dirty laundry within the relationship cannot be aired, protecting both parties, especially in the case of termination when there is a falling out between the influencer and manager.

Which brings us to non-disparagement.

In its simplest terms, neither the manager nor the influencer can bad-mouth the other. This is common in management agreements and is especially important after termination. It means that the parties should be careful to not talk about why they terminated their agreement if they do terminate. They are opening themselves up to legal liability and a possible legal action if they do.

Conflict resolution

Finally, there’s the issue of conflict resolution. In other words, how are disputes between a manager and influencer resolved?

Generally, influencer management agreements are standard contracts in the sense that there are certain steps that need to be taken when there is a breach of agreement. Each contract is unique in terms of the process for notifying the other party of a breach and how it must be done, such as by written letter, or if an email will be enough. I’m not going to go into all of these mechanics here, other than to mention that there are usually procedures to follow and they are spelled out in the contract if a conflict or breach occurs.

But how are disputes resolved? There are generally two options, which also depend on the agreement and its terms. The first option is enforcing the contract in court. This means exactly what you think it does: it means having a lawyer, such as myself, send a demand and if that demand is not met, then filing a lawsuit.

A second option, sometimes written into agreements, is something called mandatory arbitration. This is very similar to a lawsuit, in the sense that you still will need to hire a lawyer, but the procedures are different than regular court. Arbitration is essentially a “shadow” court, or a way of filing a lawsuit without going to actual court. Instead, you hash out your legal differences in front of an arbitrator—who is usually a retired judge—and have a mini-trial with the arbitrator rather than in court. Some people prefer this because it is usually a faster process, taking a few months (where a lawsuit can last years), and usually an arbitration will take only a day, rather than weeks. So the advantage is that it is generally more efficient and therefore, sometimes cheaper. But the disadvantage to mandatory arbitration is you don’t have your “day in court” so to speak; you are generally bound by what the arbitrator decides instead of being able to have a jury decide. And in all practicality, arbitration is still expensive, because you have many of the same steps of a lawsuit, such as exchanging information before the arbitration hearing in a process called discovery.

In both cases, the contract may also allow for something called mediation. This is usually voluntary, in the sense that both parties need to agree to participate, but a court may also require it. In some states, such as in California, a court may also send the parties to mediation as a step in the lawsuit. Mediation is a good first step before a lawsuit or arbitration, since it allows the parties to come together to discuss and negotiate in a more flexible way. A neutral mediator will guide this negotiation and help both parties cut through their differences and the legal issues to try to come to an agreement before all of the expensive steps of a full-blown lawsuit take place. So this is beneficial because it helps save money. Mediation also allows for more flexibility in a settlement to a dispute, since the parties can agree on anything they want as a solution, which is not necessarily the case in a lawsuit or arbitration, where a judge or jury decides the outcome under legal guidelines.

But ultimately, I hope you don’t have to get there in a dispute. If the contract is well-written and the parties do what they say they will do, then usually the parties can work things out themselves with only minimal involvement of lawyers.

So there you have it. We’ve now covered all of the essential elements of influencer management agreements. In the next minisode, we’ll begin our deep dive into influencer brand agreements and begin a new series looking at the common terms that should be in them.