What Non-Celebrities Can Learn about Contract and Workplace Issues from the Lively/Baldoni Decision

April 13, 2026

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What Non-Celebrities Can Learn about Contract and Workplace Issues from the Lively/Baldoni Decision

In a lawsuit, allegations of bad behavior count only if there is a legal line that was arguably crossed. Blake Lively alleged that she experienced sexual harassment while working on “It Ends with Us” and then faced retaliation when she complained. While most employees are legally entitled to be free from harassment and retaliation, Lively and the defendants disputed whether she was even an employee in the first place.

The Court found that Lively does not have a viable claim for harassment under law or contract, but certain retaliation allegations can go to trial. The Court’s decision illustrates issues that are important in any business relationship or workplace: companies have fewer obligations to independent contractors; unsigned contracts are not automatically unenforceable; different states have wildly different workplace laws; and retaliation cases sometimes have sharper teeth than the underlying harassment or discrimination allegations.

Independent contractor status means fewer legal rights.

Lively brought claims of sexual harassment and retaliation under both federal and state law. Under federal law, employees—but not independent contractors—have the right to be free from sexual harassment and from retaliation when they push back.

The legal question of whether a worker is an employee or an independent contractor is not just a matter of how the parties describe their relationship, but instead depends on the specific nature of their relationship. In this case, the Court found that Lively was not an employee. Among other things, she had committed to a single, fixed-term project; she was allowed to pursue other work; she had approval rights for many important aspects of the film (such as the shooting location and casting decisions); and she was paid a flat rate for the project plus contingent compensation based on project’s success.

Unsigned contracts aren’t always unenforceable.

Lively argued that she had contractual protections against harassment under her Actor Loanout Agreement. But the parties never agreed on a final draft of the agreement, and Lively never signed it.

Although the Court held that the contract was not enforceable, that wasn’t an automatic decision based on the lack of signatures. The Court focused on the contract’s own language that it would not be binding until executed. When relationships break down, seemingly unexciting legal boilerplate can suddenly be a lynchpin.

The parties’ behavior also matters. The Court emphasized that the production company repeatedly asked Lively to sign, and she refused—both sides acted as though a signature would make a difference. Additionally, when the parties perform their obligations under a contract, that can show that they believe the contract is in effect even if they didn’t sign it. In this case, the parties’ working relationship was already subject to an offer letter, regardless of whether they signed the longer contract. In other circumstances, however, an unsigned contract could be treated as an enforceable agreement.

Different states establish vastly different worker protections.

Without federal law or a contract to rely on for anti-harassment protection, Lively’s case puts the focus on state law. Many states have workplace protection laws that go beyond federal standards, and California—where at least some facts occurred—is at the far end of that bell curve. Under the California Fair Employment and Housing Act (“FEHA”), anti-harassment and anti-retaliation protections don’t just apply to employees, but also to independent contractors; under California Civil Code 51.9, sexual harassment prohibitions even apply to other business, service, or professional relationships.

The Court held that Lively could not maintain anti-harassment claims under FEHA because the alleged on-set harassment did not happen in California—this means that if the movie had been shot in California, her harassment claims might have survived. An individual’s decision of where to work, and a company’s decision of where to operate, can have enormous consequences.

However, the Court held that her retaliation claim under FEHA could go forward because those claims did involve alleged actions in California. This flags another important state law difference. Under federal law, retaliation is actionable only if it is the “but for” cause of an adverse action. If the negative action—a termination, a demotion, the reputational attack alleged here—would have happened anyway, there is no retaliation. Not so in California. If retaliation was a “substantial motivating factor” for the decision, there is a viable claim, even if the same action would have been taken regardless.

(The Court also held that a contractual retaliation claim could go to trial; that claim is based on an agreement reached in response to Lively’s workplace complaints, not the unsigned Actor Loanout Agreement discussed above.)

A retaliation claim does not depend on whether the worker would also win a harassment or discrimination claim.

Lively’s FEHA retaliation claim does not require her to definitively prove harassment or discrimination; instead, it requires that she sincerely held a reasonable belief that she was opposing a practice that the state law prohibits. (Federal law works similarly but is limited to employees.) A business may or may not have actually crossed a legal line—but if the worker reasonably thought that it did, the business’s confidence in its innocence is no justification to retaliate.

In this case, the Court found that Lively has provided sufficient evidence that a jury may conclude she reasonably believed she was sexually harassed. This is only a preliminary decision allowing certain claims to proceed to trial, and soon, a jury will decide.

(This is a brief discussion of a 150+ page decision and necessarily is highly condensed.)

Erika L. Todd

Erika L. Todd

What Non-Celebrities Can Learn about Contract and Workplace Issues from the Lively/Baldoni Decision

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