How Murdoch Cheated 'WSJ' Independence Pact

Only the very naive didn't expect Rupert Murdoch to find some sly way around the agreement he made to respect The Wall Street Journal's editorial independence once it was his.

But when the time came, there was nothing very sly about it at all: Murdoch just did exactly what he wanted, turfing out managing editor Marcus Brauchli in a way that, arguably, represented a concrete and blatant violation of the independence pact.

According to yesterday's Journal story on Marcus Brauchli's exit, "The committee [that oversees the independence guarantee] wasn't required to sign off on Mr. Brauchli's exit -- it has the power to approve new appointments and firings of the Journal's managing editor and two other top Dow Jones editors, but not resignations."

But that's not exactly accurate. The text of the agreement also specifically gives the five-person committee "rights of approval" over "any material changes in the terms and conditions of employment of each such Editor [including the managing editor] that could give rise to constructive termination, such as a material reduction in compensation, relocation of principal place of employment, material change in duties or responsibilities and the like."

Constructive termination, or constructive discharge, is a legal concept meaning a change in an employee's working conditions of the sort that would cause any reasonable person to quit. It's been widely reported, including by me, that News Corp. did indeed engineer a "material change" in Brauchli's "duties or responsibilities." Once Robert Thomson was appointed as publisher, Brauchli ceased to be the top editorial voice at the paper, and was left out of major decisions, including the development of a culture section and the launch of a new overseas edition. Pre-Murdoch, such decisions would clearly have been part of his purview. In other words, Brauchli was demoted.

Then, to top it all off, Thomson and new Dow Jones CEO Les Hinton actually told Brauchli, earlier this month, that they'd prefer a managing editor of their own choosing.

Add it all up, and News Corp.'s claim that Brauchli "resigned" starts to look pretty vulnerable, legally speaking.

"There are certainly questions about whether this resignation was voluntary or not," says Jane Kirtley, director of the Silha Center for the Study of Media Ethics and Law at the University of Minnesota. "The reality is that if a job is completely redefined to the point in bears no resemblance to the one you were originally hired to do, I think a case can be made that this amounts to constructive dismissal."

Kirtley notes that keeping someone out of the loop, as Thomson and Murdoch reportedly did to Brauchli with the new London edition, is "one of the best ways to drive someone out of a job."

"To say he was resigned as opposed to this being his own idea does strike me as a distinction without a difference, at least insofar as the spirit of the agreement goes," she adds.

But will the independence committee see it the same way? The Journal reports that "some committee members were concerned about the change," but Thomas Bray, its chairman and spokesman, didn't return my call. Meanwhile, a News Corp. spokeswoman merely forwarded me a written statement the committee made yesterday:

The Special Committee was informed earlier this week about Marcus Brauchli's decision to resign as managing editor of the Wall Street Journal. The committee questioned him about this decision. He said that his departure from the position was amicable and assured the committee that his decision had nothing to do with any integrity issue at the Journal. He said that he has confidence in News Corporation's respect for the editorial integrity of the Journal. The committee will exercise its responsibility in connection with the selection of a successor.

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