What Happens When Radio Talent Goes Online?

The radio industry is sensitive to the issue of losing talented broadcasters and for good reason:  a particular personality may be the only reason listeners pick one channel over another during their commute.

Typically, most radio stations require their broadcasting talent to sign non-compete agreements that prevent employees from moving across town and setting up the same radio program for a rival.

Do non-compete contracts at radio stations apply to Internet radio? Commercial radio stations are likely different from online radio, which can reach a national audience through a website or a podcast via iTunes.

An Ohio judge said in a recent case, Deluca v. WDJQ (ht: Ohio attorney John Marsh) that traditional radio non-compete contracts do not apply online, unless the non-compete contract was carefully worded by the employer to cover online activities and Internet radio broadcasting.

Here’s what happened. Two contemporary radio broadcasters left an Ohio radio station when contract negotiations deteriorated. The pair, Patrick DeLuca and Charlotte DiFranco, started their own Internet radio station and began broadcasting a weekly show, “The Deluca Show,” via their website. WDJQ sought an emergency injunction to stop the show from airing and to shut down the website.

The radio station argued that the broadcasters’ non-compete clause prohibited radio operations within a 60-mile radius. Since “The DeLuca Show” was broadcast online within the geographic radius, the non-compete clause should apply.

Stark County Court of Common Pleas Judge Charles E. Brown, Jr., disagreed. Among other reasons, he said that the non-compete clause as written did not cover Internet broadcasting.

The language was crucial to the court’s analysis. The non-compete contract prohibited operating a “commercial radio station,” which meant over-the-air broadcasts, direct mail, and other activities that are regulated by the Federal Communications Commission (FCC). Unlike commercial radio, Internet radio is transmitted without use of the public airwaves or the purview of the FCC. The contract did not apply and the talent prevailed.

My Take:  Words matter and the judge was absolutely correct in ruling in favor of the departing employees.  What will happen now?  Every “over-the-air” radio station will redraft their non-compete agreements for radio talent to include Internet radio.