Regulation of Talent Agencies

Question 1

What are the two exceptions to the licensing requirement for talent agents?

Answer 1

Recording Agreement

Safe Harbor

Question 2

What happens if a manager or personal service representative procured employment without a license?

Answer 2

If the TAA licensing requirement is violated, the “agent” is disgorged of their commission unless severance can save them (Marathon)

If severance is applied, The manager gives back the commission received one year prior to commencement of action. (One year SoL)

Question 3

HYPO: A formal personal management agreement says that the artist acknowledges that manager is not licensed as a talent agent and shall not act like a talent agent or procure employment for him. Then the unlicensed agent goes and procures employment.

Answer 3

This violates the TAA:

It doesn’t matter what the representation agreement says, what matters is the conduct of the parties.

Question 4

Takeaways from Buckwal case

Answer 4

Labor Commissioner has original jurisdiction

Anyone who attempts to procure employment is subject to the TAA

A contract between an unlicensed talent agent and the artist is void and unenforceable (BUT commissioner has the power, not a duty, to sever)

Question 5

Common fact pattern for TAA licensing requirement / Procedure

Answer 5

Artist decides to stop paying/ reduce commission to unlicensed rep

Unlicensed rep sues for breach of contract in Superior Court

Artist’s lawyer gets that action stayed and brings it in front of the labor commissioner.

The decision of the labor commissioner can be appealed, starting first at Superior Court and can go all the way to SCOTUS.

Question 6

Park v. Deftones Takeaways

Answer 6

Park trying to get Deftones a recording contract BUT procures 85 gigs for them in doing so

There is no such thing as incidental procurement in CA (P argues his goal was to obtain a recording agreement so his actions were exempt because procuring these engagements were incidental to getting the recording contract- but court says no)

Don’t need to be compensated (P argues he didn’t receive commission so there is no violation but court says commission is irrelevant- the TAA does not reference commission)

The mere act of trying to collect money is a violation (P argues the action is barred by the statute because the last gig was over a year ago but the court says even though his illegal procurement occurred beyond one year, he tried to enforce the contract and collect money within one year and that counts)

Question 7

Stein v. Stevens Takeaways

Answer 7

Stein sued Stevens for commission in Superior court. Defense did not stay the action, they kept it in superior court as a BoC action.

Stein claimed statute had run on any TAA claim, and the court agreed, but this was a BoC action (4 year SoL, not 1).

Question 8

Solis v. Blancarte Takeaways

Answer 8

All the services that Blancarte did for Solis which violated the TAA were negotiation services

Long been held that negotiation constitutes procurement

Blancarte was a licensed attorney, not a licenses talent agent

Labor commissioner held that licensing requirement of TAA applies to everyone (consistent w caselaw as well)

Question 9

Elements of the Safe Harbor Exception to TAA Licensing Requirement

Answer 9

1. Unlicensed person working AT THE REQUEST OF a licensed Talent Agent, AND
2. Must be working IN CONJUNCTION WITH a licensed Talent Agent

*This ONLY applies to negotiations as per the statute

Question 10

Severance

Answer 10

Cuts the contractual relationship in two and voids the illegal part of it.

Comes from the Marathon v. Blasi case

Look at the core of the relationship between the parties:

1. If the illegal activities are so significant that it goes to the heart of the relationship, it is not appropriate to sever
2. BUT if the illegal activity is collateral to the main purpose of the relationship, the court/labor commissioner has the power, not the duty, to sever.

Question 11

Hypo: A Personal Manager procures employment 3 times in 10 years without a license.

Answer 11

They can sever the commission received for those three opportunities but keep the rest of the agreement in tact, but the key is to LOOK AT THE REPRESENTATION AGREEMENT between artist and manager.

Important: NOT the employment agreement, it is about the representation.

Question 12

Approach to a Representation question on the exam

Answer 12

1. Look at alleged illegal activity
2. Is it procurement?

2a. If so, does it come under one of the 2 exceptions?

2b. If no, is there a basis to sever?

Question 13

What is “procurement”?

Answer 13

Procurement includes:
1. Initiating discussions w/ potential purchasers

2. Negotiating
3. Any active participation in communications w/ a potential purchase of the artists services aimed at obtaining for the artist, regardless of who initiated the communication

Question 14

Preston v. Farrar Takeaways

Answer 14

Issue: Whats the proper venue to adjudicate a claim for unlawful procurement?

Labor commissioner has original jurisdiction, BUT here they had an unambiguous arbitration agreement.

SCOTUS said:
o Courts favor arbitration
o If you have a clear, written arbitration agreement, this is the proper venue for dealing with disputes

Question 15

H.A. Artists v. Actor’s Equity Association Takeaway

Answer 15

Rule: If you want to represent members of a guild, you need to be FRANCHISED by the applicable guild.

Issue: Actor’s Equity said this requirement violated antitrust. Court said no this is an exception to the antitrust rules.