For lawyers, personal managers, talent act woe

mario solice

While California’s Talent Agencies Act has been the law of the Golden State for more than a half century, it poses challenges still to lawyers working in Entertainment and is under recent and persistent fire from personal managers.

§1700.5 of the state Labor Code says: No person shall engage in or carry on the occupation of a talent agency without first procuring a license therefore from the Labor Commissioner.” And the act specifies that a talent agent is “a person or corporation who engages in the occupation of procuring, offering, promising, or attempting to procure employment or engagements for an artist or artists.” Crystal clear?

It wasn’t so for James Blancarte, a lawyer who found himself on the wrong side of a recent ruling by the California Labor Commission for negotiating for sports broadcaster Mario Solis (right) over an anchor position with the NBC affiliate in Los Angeles. Blancarte had a contract with Solis stipulating a five percent commission of earnings. But the Labor Commission found the contract invalid under the Talent Agencies Act. While Blancarte is a licensed attorney, the Labor Commission found in this instance he acted as a talent agent, procuring employment for client: “By negotiating the KNBC agreements on petitioner’s behalf, respondent attempted to procure and procured employment for petitioner. As a consequence, respondent engaged in and carried out the occupation of a talent agency.”

In his article, The Lawyer’s Expanded Role within the New Music Business, Ken Abdo explains the traditional roles of an agent, personal manager, business manager and entertainment attorney. He says the lines among those roles are blurred and an entertainment attorney must wear multiple hats, including agent — though he is speaking in broad terms and does not address state specific statutory challenges, such as those posed by California’s talent agent act.

Blancarte is not the first attorney to run afoul of the state act and his situation is not new. In 1992, James M. O’Brien III wrote Regulation of Attorneys under California’s Talent Agencies Act: A Tautological Approach to Protecting Artists, a California Law Review article that noted of the talent act and its: “applicability to attorneys who procure employment for artist-clients … should be amended to remedy an important shortcoming: the act’s failure to exempt attorneys from its operation, particularly when they do no more than perform tasks traditionally associated with the practice of law.”

The act, of course, long has been the bane and vexation of personal managers, who renewed their salvos against it last spring in a federal action. The National Conference of Personal Managers sued California officials in March asserting the act allows “indentured servitude” by depriving managers commissions they earn. The group termed the act vague and claimed it failed to allow for due process.

But U.S. District Judge Dean Pregrerson in Los Angeles tossed the case, with the court explaining: “this breadth does not render the statute standardless…California courts have previously interpreted the phrase [‘procure employment’] and determined that its meaning is not vague…Not being compensated for work performed does not inevitably make that work involuntary servitude. Plaintiff’s members have choices. They have the choice to refrain from procuring employment for their clients, to procure employment without a license and risk the voiding of parts of their contracts, or to obtain a license.”

The personal managers’ group has appealed their loss in Pregrerson’s court to the U.S. Court of Appeals for the Ninth Circuit, and, notably, an amicus brief has been filed formally by Southwestern Law School Professors Robert C. Lind and Michael M. Epstein — a document researched and written, it notes, as part of the school’s new Amicus Project Practicum by Southwestern student Orly Ravid.

The opposition by personal managers to the talent act goes deep. In the Loyola of Los Angeles Entertainment Law Review, Bradley Hertz wrote an article in 1988:  The Regulation of Artist Representation in the Entertainment Industry, discussing, among others, the Richard Pryor case in 1982. Pryor prevailed against his personal manager, claiming he acted as an agent and thus was not entitled to commission; nearly a decade later Arsenio Hall sued his personal manager for all commission fees claiming he acted as an agent.

Richard Busch, in his recent forbes.com article, tracks other notable cases of celebrity disputes with personal managers over the talent act; he notes that New York’s talent act differs from its California counterpart and provides an exemption for personal managers.