A Case Study on the First Amendment Defense for Entertainment Industry Employers | JD Supra

• The Ninth Circuit might consider whether an entertainment employer’s First Amendment rights provides a strong enough defense in an employment dispute involving off-duty social media posts.
• This case highlights the conflict between an employee’s lawful, off-duty political expression and an employer’s brand integrity.

The First Amendment traditionally offers robust protections for expressive employers, such as those in the entertainment and media industries, allowing them to control casting and messaging. In California, however, these protections are weighed against the state’s robust employment laws for employees’ political activity. This tension is at the heart of the Carano v. The Walt Disney Company case, and the prominent film company is moving to certify the case as an interlocutory appeal to be heard before the U.S. Court of Appeals for the Ninth Circuit because the matter presents fundamental constitutional questions in an area where the Supreme Court and Ninth Circuit are regularly issuing new precedents.

In Carano, the plaintiff alleges her former employer violated California law that protects employees who are politically active outside of their workplace from retaliation. She also claims the company wrongfully discharged her from employment due to her political views, and finally alleges she was subjected to sex based discrimination because her male co-stars didn’t face repercussions for their political speech on social media.

In July 2024, a federal court in California denied the film company’s motion to dismiss against an actor from the hit show, the Mandalorian, raising the question of whether an entertainment employer’s First Amendment rights provides strong enough protections in employment disputes. The district court noted that California’s employment laws, which offer broad protections for employees, could limit First Amendment defenses, but also noted that the First Amendment protects speech that occurs in entertainment as well. Specifically, there was debate from the district court over whether an entertainment company’s artistic freedom justifies terminating an actor for off-the-job social media posts, especially when those posts are not directly related to the show itself.

Key Arguments from an Expressive Entity

Disney argues that casting decisions are an integral part of its artistic expression, protected by the First Amendment, which protects individuals and organizations from government actions that infringe on free speech. As “entities that do create speech products,” Disney asserts it enjoys the right to make “decisions about what to say in [its] own art and how to say it,” including by selecting the individuals who perform or otherwise create that art. It contends that lawsuits challenging these decisions would chill artistic freedom, relying on precedents like Supreme Court decisions Boy Scouts of America v. Dale (2000) and Green v. Miss United States of America (2022), and a recent decision out of the Southern District of New York, Moore v. Hadestown Broadway Ltd. Liability Co. (2024), all of which affirm that expressive entities have the right to control the message they convey to the public, including by choosing which individuals represent them.

In Dale, the U.S. Supreme Court ruled that the Boy Scouts, as an expressive entity, had the right under the First Amendment to exclude an openly gay group leader (Dale) whose presence, due to his public advocacy for LGBTQ+ rights, would conflict with the group’s message. The Court held that forcing the organization to retain Dale would interfere with the group’s right to freedom of expressive entity, as it would impair its ability to express its intended values and beliefs. Similarly, Disney claims that as a public figure, the plaintiff’s social media interferes with the Company’s artistic expression and that retaining her would compromise its message of inclusivity and respect. Disney argues that Dale should apply here because an actor, like a boy scout group leader, represents the entity’s public persona. Thus, Dale provides that the “First Amendment must give deference to an entity’s assertions regarding the nature of its expression” along with the entity’s view of what would impair its expression, including a state’s employment laws with respect to casting decisions.

In Green v. Miss United States of America, the Ninth Circuit ruled in favor of the pageant organizer’s First Amendment right to exclude a transgender contestant from the competition. The court held that as an expressive entity, the pageant was allowed to enforce its interpretation of femininity and exclude individuals who did not meet its criteria, affirming that First Amendment protections extend to private companies’ creative decisions. Disney’s defense hinges on this principle: just as the pageant defined its concept of femininity, Disney contends it should have the freedom to choose who represents its productions.

In Moore v. Hadestown Broadway Ltd. Liability Co., the Southern District of New York dismissed a complaint of race discrimination at the pleading stage. The court found that the First Amendment protected a Broadway theater production’s right to cast actors of certain races based on the producer’s view of the effect of casting on the artistic works’ expressive content. The plaintiff was a Black actor who alleged she was cast to be in the “workers chorus” but then fired so that the chorus could be more racially diverse. The show made this decision because it was concerned that the show would appear as a “white savior story” if the chorus was all Black and the two stars Orpheus and Hades were white, which was not the intended message of the show’s creators. The court held “Hadestown’s creative decisions about what story to tell when it stages the Musical [including casting] fall squarely within the protection of the First Amendment.”

By comparison, the Eleventh Circuit recently rejected Fearless Fund Management LLC’s First Amendment defense in a legal challenge to its grant contest for Black female entrepreneurs. In doing so, the court held that Fearless Fund violated Section 1981 of the 1866 Civil Rights Act’s prohibition on giving race-based preferences in contracts and exceeded First Amendment protections for expressive conduct. Although Fearless Fund argued that its grant contest was charitable giving protected expressive conduct and not a contract, the court found the program likely overstepped free speech protections because it did not entertain applications from business owners who weren’t Black or female.

Broader Implications for Employers that Are Expressive Entities

For employers, including those in the media and entertainment industry, the dispute is not one of whether a termination or employment decision is wrongful, but rather as one of the right of expressive entities to control their message. The Carano case exemplifies how the First Amendment defense could expand to include off-the-job conduct that threatens the creative voice of the expressive employer.

In an age where actors’ personal social media activity often intertwines with their public persona, entertainment companies face new challenges in managing their brand. Disney argues that an employee’s off-the-job social media behavior can directly impact its brand and artistic message. “The message of any performative art cannot be decoupled from its major performers — a principle even more salient today, when so many performers develop their own strong public personalities through extensive online activity,” Disney wrote. “The [lower] court’s contrary ruling misconstrues both scope of artistic expression and the First Amendment’s limitations on state interference with such expression — or so a reasonable jurist could conclude.”

The case also demonstrates that workplace policies must be enforced in an equitable way. The plaintiff’s sex discrimination claim is based on the allegation that her male co-stars posted their political opinions on social media without any consequences. An important recommended practice is that employers apply all policies and rules in a consistent, uniform, and non-discriminatory manner.

The key takeaway for entertainment employers is to watch whether the Ninth Circuit will hear the case and, if it does, how it will resolve the conflict between employment laws and artistic expression. A ruling in Disney’s favor could secure (again) the First Amendment defense, allowing employers more control over employees’ public statements when they affect the company’s expressive goal and image. Alternatively, a ruling favoring the plaintiff might signal the need for employers to create more nuanced employment policies that govern off-the-job conduct.

Regardless of whether the case is heard at the Ninth Circuit, for entertainment and media employers, this evolving legal landscape will require close attention where employee social media activity blurs personal and professional lines.