The enforceability of an arbitration provision has unsurprisingly become the key issue in former WWE employee Janel Grant’s lawsuit against WWE founder Vince McMahon for negligence, battery, intentional infliction of emotional distress and violating the federal Trafficking Victims Protection Act. Attorneys for McMahon Monday filed an objection to Grant’s recent motion to strike the preliminary statement contained in McMahon’s motion to compel arbitration. The WWE, meanwhile, filed its own motion to compel arbitration Tuesday.
Four months ago, Grant sued McMahon, WWE and former head of talent relations John Laurinaitis. She accuses McMahon of pressuring her to partake in sexual acts, some of which she says were “sadistic,” and that he both sexually trafficked and defecated on her. Grant’s complaint references texts she received from McMahon, including one where he allegedly wrote “i’m the only one who owns U and controls who I want to [expletive deleted] U.”
McMahon, who resigned all positions at TKO in the wake of this lawsuit, “vehemently and categorically” denies Grant’s claims, which his attorneys say are “false statements intended for publicity.” The 78-year-old billionaire insists he and Grant, 43, had a consensual relationship that lasted a little less than three years and ended in early 2022. He also contends Grant texted him “sexually explicit images of herself” as well as messages saying she was in love with him and that she wanted him to give her clothes and gifts.
Whether Grant or McMahon—or neither—is telling the truth is not yet determinable. The litigation, which is before Judge Jeffrey Meyer of Connecticut’s federal district court, is instead focused on an agreement, dated Jan. 28, 2022, negotiated by attorneys for Grant and McMahon. In it, Grant and McMahon agreed to confidentiality, a release of claims and a covenant not to sue. McMahon also agreed to pay Grant $1 million within 10 days and to make four additional payments of $500,000 scheduled to occur in 2023, 2024, 2025 and 2026; Grant says McMahon made the first payment but not the additional ones.
Crucial to the case is Section X of the agreement. It states that “in the event of any dispute” concerning the agreement, Grant and McMahon agree that the “sole and exclusive legal method” to resolve the dispute is through “binding arbitration.” Section X thus unambiguously covers “any” dispute and precludes a court from adjudicating claims brought by Grant or McMahon.
If the judge enforces this language, which both Grant and McMahon voluntarily signed while advised by attorneys, Grant’s case would be dismissed to arbitration.
And perhaps never heard from again.
Unlike litigation, where there are publicly-available court filings and court hearings are open to the public—and to journalists—arbitration is conducted in private. Although a party that loses in arbitration can petition a federal judge to vacate the arbitration decision, judges are obligated under the law to review arbitration decisions with a high degree of deference.
For pro sports leagues and entertainment companies, arbitration is highly valued given how closely the public, fans and media follow them. That point has been apparent in lawsuits brought by Minnesota Vikings defensive coordinator Brian Flores and former Las Vegas Raiders head coach Jon Gruden against the NFL. Both coaches have seen their cases greatly hampered by arbitration clauses.
The fact that WWE’s parent is TKO Group Holdings, a publicly traded company, is also relevant. Publicly traded companies tend to treasure the privacy dynamics of arbitration since, in sharp contrast, high-profile lawsuits can play out on the front pages of the Wall Street Journal and The New York Times and impact stock prices.
Grant’s attorneys anticipated the hurdle posed by Section X. Grant seeks a judicial declaration the agreement is unenforceable under the Speak Out Act. Signed by President Biden in 2022, the Act is intended to ensure survivors of sexual harassment and assault can report their abuse even if they signed agreements contractually forbidding disclosure. To that end, the Act renders nondisparagement and nondisclosure contractual provisions unenforceable in predispute agreements.
McMahon and WWE insist that Grant is misreading the Act’s applicability. They stress the Act doesn’t address arbitration provisions and thus doesn’t render them unenforceable. Indeed, the Act doesn’t mention the word “arbitration.”
But Grant argues that because much of her agreement with McMahon concerns nondisparagement and nondisclosure, the agreement itself should be deemed unenforceable. McMahon says there’s no legal support for that interpretation. He asserts Grant doesn’t challenge the arbitration clause because her attorneys know it is enforceable.
Related to this debate is Grant’s demand the court strike what she says are “unsupported assertions” in McMahon’s motion to compel arbitration.
Through his attorneys, McMahon wrote that Grant’s complaint contained “complete falsehoods” when she claimed she had been struggling financially and suffering from grief. Grant discussed “devoting years to around-the-clock caregiving” of her parents, whose home had been foreclosed. McMahon challenged this account. He said Grant’s father passed away two years before she met McMahon and that Grant’s father was living in a senior care home—“not with [Grant]”—and also widowed. McMahon added that, far from being in a destitute position, Grant lived “in a luxury multimillion dollar building with another man” who was an attorney, “during her entire relationship” with McMahon.
In her motion to strike, Grant argues McMahon’s assertions are “baseless, irrelevant and false” and “designed to harass and intimidate his longtime victim.” Grant said her father “was in in-home hospice care during his final days” and that the attorney with whom she resided was an “ex-fiancé” who “generously allowed” her to stay as she “rebuilt her life” following her parents’ passing.
In response, McMahon wrote Grant’s arguments are “meritless and the height of hypocrisy.” He said Grant has chosen to “violate” their “explicit agreement” to keep their relationship confidential by commencing the lawsuit. McMahon chastises Grant for “unnecessarily” including “private sexual text messages” he sent without revealing her replies, which he says are “equally and often more aggressive and provocative.” McMahon further insisted that Grant makes her late parents’ situation relevant because it is her attacking the enforceability of the agreement based partly on her vulnerability when she met McMahon.