Third-party interference in talent agreements

The race for hiring highly sought-after talents has persistently existed within the entertainment industry. Frequently, players in this sector attempt to lure talents who are already bound by legal agreements with their competitors by offering more appealing compensation or positions, in some cases, in violation of Brazilian regulations.

The Brazilian Civil Code incorporates the rule of the third-party wrongdoer (Article 608) – akin to the common law’s notion of tortious interference. This rule holds that third parties can be held liable for deliberately meddling in contracts to which they are not parties. Controversy on this matter has emerged from rullings issued by the Brazilian Superior Court of Justice (“STJ”, one of Brazil’s highest judicial bodies, alongside the Supreme Court).

In the first case, ruled in 2014, the Court decided in favor of the plaintiff in a lawsuit against an advertising agency that had hired an artist previously featured in one of the plaintiff’s advertisements promoting a competing product. While the Brazilian Civil Code upholds the third-party wrongdoer doctrine, it was not the primary basis for the decision. Instead, the presiding Justice concluded that it constituted a case of unfair competition (as defined in the Brazilian Industrial Property Law, Article 209) and a violation of the “objective good faith” principle, also outlined in the Civil Code.

The second STJ ruling, issued last year by the same court panel, dealt with a case of an anchorman who, while under an exclusive contract with a television network, moved to a rival company. The network that originally contracted the anchor filed a lawsuit against its competitor invoking the third-party wrongdoer rule and alleging unfair competition. In this instance, the panel dismissed the case, even though it was proven that the competitor had intentionally approached the talent, thereby interfering in his relationship with the previous network. In this particular judgement the Court found that to apply the doctrine of the third-party wrongdoer, the plaintiff must also demonstrate a breach of the duty of good faith; the disregard of the social role of contracts, or the practice of an unfair competition act.

Nevertheless, a dissenting vote within the panel asserted that the language of Article 608 of the Civil Code is unequivocal: the act of interfering in a third-party contract suffices to constitute a violation of the law; without the necessity of proving any additional illicit actions.

It is anticipated that the STJ will soon provide clarification on the correct interpretation of this legal provision, aiming to ensure legal certainty in a matter that holds paramount importance for the entertainment industry.