## Facts

- Dan Rather, a longtime CBS News anchor and correspondent, narrated a September 8, 2004 *60 Minutes II* segment about President George W. Bush’s Texas Air National Guard service.
- The segment relied on documents later challenged as inauthentic; CBS later stated it could not authenticate the documents, and Rather apologized on air.
- Rather alleged CBS disavowed the broadcast under external pressure, induced him to apologize and remain silent about his belief in the story’s truth, and then shifted blame to him.
- Rather stepped down as anchor of the *CBS Evening News* in March 2005 and was assigned to *60 Minutes II* and later *60 Minutes*, but alleged the assignments were nominal and that CBS “warehoused” him by limiting meaningful work.
- Rather’s employment agreement contained “pay or play” provisions addressing reassignment and termination; CBS continued paying him about $6 million per year through June 2006 and then accelerated remaining compensation upon termination.
- Rather sued CBS, its corporate affiliate, and executives for breach of contract, fraud, breach of fiduciary duty, and tortious interference theories, seeking substantial damages including alleged lost business opportunities.

## Issues

1. Whether CBS breached the employment agreement by removing Rather as anchor, assigning him to *60 Minutes*/*60 Minutes II* without meaningful on-air use, and declining to accelerate payment and release him in 2005.
2. Whether lost-opportunity damages were recoverable where CBS paid contract compensation and the agreement contemplated payment without use.
3. Whether fraud, fiduciary-duty, and interference claims were sufficiently pleaded and legally distinct from the contract dispute, including whether inducement claims could stand absent an underlying breach.

## Decision

- The Appellate Division, First Department unanimously reversed the trial court’s refusal to dismiss the core claims and dismissed the complaint in its entirety.
- The court held CBS did not breach because the “pay or play” structure did not obligate CBS to use Rather’s services or broadcast programs featuring him, and CBS satisfied its payment obligations.
- The court rejected damages based on alleged lost business opportunities as insufficiently supported and inconsistent with the agreement’s allocation of risk.
- The court dismissed the tort, fraud, fiduciary-duty, and inducement claims as legally deficient, duplicative, and/or dependent on a contract breach that was not established.

## Legal Principles

- A “pay or play” contract may permit an employer to choose between using talent and paying compensation; absent explicit language, payment obligations do not necessarily include a duty to provide airtime, assignments, or actual use.
- Where a contract grants an option to continue paying through the term (or accelerate payment upon termination), continued payment can constitute full performance even if the employer does not meaningfully deploy the employee.
- Claims for lost business opportunities must be supported by non-speculative allegations and must fit the contract’s contemplated risk allocation; they may be unavailable when the agreement allows payment without use.
- Fraud and fiduciary-duty claims must be pleaded as independent wrongs, not merely repackaged contract disputes; interference/inducement claims generally fail without an underlying breach.

## Conclusion

The court treated the dispute as a contract risk-allocation matter and held that CBS complied with a pay-or-play agreement by paying Rather as required, even if it limited his on-air role, requiring dismissal of all contract and related tort claims.


Rather v. CBS Corp., 68 A.D.3d 49, 886 N.Y.S.2d 121 (1st Dep’t 2009)