PERSPECTIVE: TAA Violation For Record Producer Deal

Edwin F. McPherson - Los Angeles Daily Journal, August 18, 2014

A new decision by the California labor commissioner is the first in which a manager was determined to have violated the state’s Talent Agencies Act because he procured a record producer agreement. Steve Lindsey, et al., v. Lisa Marie (and Marie Music Group, formerly known as Moir/Marie Entertainment), TAC 28811 (Aug. 11, 2014). Notwithstanding industry chatter, the case is not a change in the direction of the labor commissioner’s position, or any kind of game changer in the music industry. In fact, the Lindsey case merely sheds light on a wrong that was committed six years ago.

Steve Lindsey was an “artist” and record producer who was represented by Bennett Kaufman, a personal manager at Moir/Marie Entertainment.  When Moir/Marie co-founder Steve Moir left the agency, so did Kaufman and Lindsey – as did many other artists. Lisa Marie went after them with a vengeance, seeking lost commissions.  One of those artists fought back, and the result was a labor commission case titled Chris and Tom Lord-Alge v. Moir/Marie Entertainment, TAC 45-05 (2008).

In that case, Marie claimed, and she actually found one expert witness to testify, that a “mixing agreement” was actually a recording agreement that falls under the recording contract exception to the TAA, which states, “activities of procuring, offering, or promising to procure recording contracts for an artist or artists shall not of itself subject a person or corporation to regulation and licensing under this chapter.”  Unfortunately, by the time the petitioners filed a motion for reconsideration (which was granted), it was too late – the 10-day period for de novo review had ended. The petitioners were compelled to file the notice of appeal, removing jurisdiction from the labor commissioner. The case was ultimately settled, and the labor commissioner was not asked to look at the issue again until the case of Gordy (LMFAO) v. McLean this year, which has yet to be decided.

In the Lindsey case, Marie sought to recover lost commissions from Lindsey, who went to the labor commissioner seeking to void his management agreement with her company. The case only involved three alleged violations of the TAA in nine years of representation. The first alleged violation was the procurement of a co-acquisition agreement between Lindsey and Windswept Pacific Entertainment Company for Lindsey to work as a co-publisher with Windswept, under which Lindsey was responsible to locate publishing opportunities for the mutual benefit of Windswept and himself. He was paid an annual salary that was recoupable from any royalties that were earned through any of the musical compositions.

The labor commissioner determined that the procurement of this agreement did not violate the act because “it is simply a co-acquisition agreement which represents a partnership or co-venture between Lindsey and Windswept to purchase the property previously belonging to others for ownership and profit,” which “were simply investments … outside the jurisdiction of the Talent Agencies Act.”

The other two agreements were to secure Lindsey’s services for the production of master recordings for artists – basic producer deals. Marie argued that producer agreements, like mixing agreements, are “recording contracts” within the meaning of the exemption to the TAA. However, the labor commissioner, specifically hearing officer David Gurley, who is very experienced in TAA matters, held that producer agreements are not recording agreements, and therefore do not fall under the recording contract exemption.  He reasoned that producer agreements are “contracts between two artists for services,” and that “the record company is not a party to these contracts.”  He then refused “to expand the purview of the Act’s exemption to encompass contracts for personal services between artists and producer/artists,” and ruled that the procurement of the two producer agreements did constitute violations of the act.

Gurley distinguished the Lindsey case from the Lord-Alge case stating “that the hearing officer [in the Lord-Alge case] held the exemption was applicable because ‘the contracts which Petitioners allege were procured by Respondent without a talent agency license are actual recording contracts between Petitioners and various recording companies.”‘

Finally, Gurley noted that that the latter two contracts violated the act because they constituted “substantial procurement activities that are inseparable from the lawful managerial services.” He therefore ruled that “severance is not appropriate under these facts.” The personal management agreement and the amendment thereto was determined to be “invalid and unenforceable,” and “void ab initio.”

Although criticism of the case includes the fact that properly licensed talent agents typically do not procure employment for record producers, that is an argument for another day – and perhaps an argument for broad reform of the act as it applies to the music industry. However, under existing law, the Lindsey case was properly decided, consistent with the intent of the act.  As any music industry expert will agree (save one), a producer agreement is not a recording agreement – and the next time the labor commissioner has a chance to look at one, it is all but certain that she will decide that neither is a mixing agreement.

Edwin F. McPherson

Mr. McPherson is a frequent author and lecturer. He has handled numerous matters involving copyright infringement, trademark infringement, management/artist disputes, rights of publicity, rights of privacy (including internet privacy and stalking), record production and distribution, music publishing, defamation, motion picture and television production and distribution, breach of implied contract (submission cases), net profits, unfair competition, WGA, DGA, SAG and AFTRA disputes, wrongful termination and other labor-related matters, insurance coverage and bad faith, legal malpractice, and general civil litigation. In addition, Mr. McPherson has served as a consultant and expert witness in connection with the California Talent Agencies Act, about which he has written numerous articles.

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