article in LA Daily Journal (the Variety for attys)
ri...@marathonent.com
Court Will Rule on Talent Agencies Act, Used by Performers Once They
Succeed
Los Angeles Daily Journal -
By Rebecca Beyer
Daily Journal Staff Writer
LOS ANGELES - Rick Siegel has been a personal manager for 15
years. His company, located on Melrose Avenue in Los Angeles, used to
take up an entire floor. Now, he rents out most of the space and
shares his one-room office with his Bernese mountain dog, Mort.
There are more dog toys than client files in Siegel's office -
Morty keeps busier than his owner.
Things weren't always this way for Siegel. The former stand-up
comic ran a very successful personal management company called
Marathon Entertainment for more than a decade. He had six other
managers and seven assistants. Then, he ran right into a wall called
the Talent Agencies Act.
In four decades, many other personal managers have smacked up
against it, as well. Now, the California Supreme Court could issue a
decision as soon as Wednesday clarifying the dispute.
Talent who use the services of managers have long used the act to
avoid paying commissions to personal managers who are found to have
"procured employment," something the act says only licensed talent
agents can do. In most cases brought before a California Department of
Labor Standards Enforcement board in which a manager was found in
violation of the act, his or her entire contract was voided. And when
managers appealed, the courts upheld the labor board decision.
And then along came Siegel.
Siegel's case began in 2003 after he was fired by an actress
named Rosa Blasi. The actress stopped paying Siegel, and Siegel sued
her for his commission, about $600,000. Blasi, represented by Michael
Plonsker, an attorney with Los Angeles' Alschuler Grossman Stein &
Kahan, brought Siegel before the labor board, saying he violated the
Talent Agencies Act in his contract with her.
The labor board sided with Blasi in a ruling that was upheld by a
Superior Court judge on summary judgment.
But Siegel appealed the decision, and, in June, the 2nd District
Court of Appeal reversed the trend of voiding entire contracts. Cited
the doctrine of severability of contracts, the court sent the case
back to the Superior Court to decide "whether the lawful portions of
the parties' personal management contract may be enforced."
The decision was hailed by some lawyers who have worked on these
cases as a long-overdue victory.
"I guess the right court understood the nuances of the law and
the realities of the business," said Neville Johnson, an attorney at
Beverly Hills' Johnson & Rishwain, who has represented both managers
and talent in similar cases.
Johnson said the Talent Agencies Act has been used "unfairly as a
weapon" by talent to void agreements with managers for 40 years. The
cases are usually brought, he said, when the artist achieves success.
Donald Smiley, who took Siegel's case on in 2005 after it had
reached the appellate court, agreed.
"It's a great step forward for managers," he said. "It has
brought the Talent Agencies Act in line with the way that the courts
have viewed pretty much every other contract."
Plonsker said he believes the decision will make future cases
more complicated.
"It means the precedent that has applied to analyzing what
happens in a situation like this is now different," he said. "It's
going to be more difficult for artists and managers to understand what
is going to be compensated."
Siegel is happy with the decision, but he wants more. He has
petitioned the California Supreme Court to rule on whether the Talent
Agencies Act should even apply to personal managers.
He said the ability of talent to take managers before the labor
board is "lunacy."
"Someone hires me to maximize, qualitatively and quantitatively,
their opportunities," Siegel said. "Once they change plateaus, they go
to the labor commissioner and say, 'I got them a job,' and the labor
commissioner says, 'He did what? He did what you asked him to do?
Well, you don't have to pay him!'"
Siegel continued, "The client says, 'By helping me get work, you
have morphed yourself from being a personal manager into being a
talent agent.'"
And talent agents have to be licensed under the Talent Agencies
Act.
If it sounds confusing, that's because it is.
The act as it stands began to emerge in 1937 when a new category
- "the motion picture employment agency"- was added to the Employment
Agencies Act of 1913. In 1978, the act was renamed the Talent Agencies
Act, and amendments dealing specifically with personal managers were
deleted.
"If you consider putting a group of people into statutes and then
they are removed by the Legislature, no court has the right to infuse
them later," Siegel said.
But nearly everyone else in Hollywood disagrees.
"What managers say is, 'The TAA prohibits talent agents from
procuring work, but we are not talent agents and, therefore, should be
allowed to procure,'" Plonsker said.
The logic is faulty, he said.
"What managers ignore is that the TAA prohibits anybody from
procuring work if they are not licensed as a talent agent," Plonsker
said.
But Siegel argues it's part of his job to procure employment.
That's what he's hired to do.
"This is a sales job, a commission-only profession," Siegel said.
"Managers are responsible for creating the sales materials that lead
to procurement. Procurement is one responsibility I have. It doesn't
mean I've changed occupations."
Helping someone get a job is not illegal, Siegel pointed out,
except under these circumstances.
His attorney, Smiley, added that the licensing requirement for
talent agents is much like the rules saying you have to pass the bar
to be an attorney or take the CPA exam to be a CPA.
"That doesn't mean you can't be an accountant or a paralegal,"
Smiley said. "You just can't hold yourself out to have that standard."
But, following that same analogy, Plonsker said, "anybody that
practices law has to be licensed."
Aside from Siegel's petition to review the applicability of the
Talent Agencies Act to personal managers, Plonsker has petitioned the
Supreme Court on behalf of Blasi to overturn the Court of Appeal's
decision on severability that was "[inconsistent] with 40 years of
precedent."
The Screen Actors Guild, the Directors Guild of America, the
Association of Talent Agents and the American Federation of Television
and Radio Artists all requested the Supreme Court depublish the Court
of Appeal's decision, arguing the doctrine of severance eliminates
incentive for compliance and goes against prior case law.
The acting state labor commissioner also requested depublication,
writing, "it is anticipated that, if the decision in Marathon
Entertainment remains published and controlling, that the [Talent
Agent Controversies] will be more complicated and time-consuming, ...
the other anticipated result is that the ability of the act to
regulate unlicensed talent agents will be greatly eroded."
Siegel and Smiley said the commissioner's petition in the case
shows he has crossed the line from neutral arbiter to advocate. They
said the commissioner's petition is inappropriate because their case
at some point will be returned to the labor commission, where the
commissioner would act as judge.
"The government code clearly indicates that administrative
officials, like judges, are not supposed to insinuate themselves into
existing controversies," Smiley said.
But Plonsker said the commissioner's petition does not show bias.
"It shows that he has very good reason for wanting the decision
depublished," Plonsker said. "He has the view that the interpretation
of the TAA that the Court of Appeal has set out would be unworkable.
If the labor commission is instructed by the courts to rule in a given
way, I am confident that it will follow the law."
In the meantime, Siegel spends most of his time on his pending
case in his office with Morton, who pads around from one basket of
toys to the other. Siegel has five clients who have refused to leave
him out of loyalty, but he hasn't taken on a new client in three
years.
"The best part of being a personal manager is that you get to use
all of your resources," he said. "It's like being the CEO of a unique
business. Sometimes, you spend your time on motivation and psychology,
sometimes on infrastructure. It's addicting."
He paused.
"If you could actually get paid for it," he said, "it would be
even more addicting."