On August 29, 2017, the California Labor Commissioner issued a Determination of Controversy in favor of Stefan Gordy and Skyler Gordy, who are professionally known as LMFAO’s RedFoo and SkyBlu, against their former manager Rene McLean, d/b/a RPMGRP, Inc. (“McLean”), who was seeking $7 Million in allegedly unpaid commissions. The Determination of Controversy ordered that the management agreement between LMFAO and McLean is “illegal, void and unenforceable for all purposes, and [McLean is] barred from enforcing or seeking to enforce the Agreement against [LMFAO] in any manner.” Additionally, McLean was ordered “to pay $59,581.50 to [LMFAO] in disgorgement of commissions collected [by McLean] in violation of the Talent Agencies Act.”
McLean’s management of LMFAO, began in March 2008, and concluded in May 2010, when he was terminated by the band. On March 23, 2012, McLean filed a lawsuit in Los Angeles Superior Court against LMFAO, and their entities, seeking to recover over $7 Million in allegedly unpaid commissions. However, on May 4, 2012, LMFAO filed a Petition to Determine Controversy before the Labor Commissioner, in connection with McLean’s repeated unlicensed procurement of employment throughout the course of his representation of the band. LMFAO’s Petition to Determine Controversy alleged over 136 violations of the Talent Agencies Act (“TAA”) by McLean. The proceedings before the Labor Commissioner, which stayed McLean’s state court lawsuit, concluded in or about May 2014.
In the recently issued decision, the Labor Commissioner found that “[t]he evidence presented at the hearing clearly established [McLean and his entity] acted as talent agents without the requisite license under California law”, and that “throughout the two-year agreement McLean procured employment for [LMAFO] routinely.” While McLean admitted to several acts of procurement, he asserted that he also performed business services for LMFAO for which a license is not required, and argued that the Labor Commissioner should sever those lawful services from those that may violate the TAA, and allow him to collect his allegedly owed fees.
McLean also attempted to utilize a safe harbor in the TAA for managers, who work with, and at the direction, of a licensed talent agent, by arguing that the majority of the alleged procurement was performed by, or in conjunction with a New York booking agent. However, counsel for LMFAO countered by establishing that McLean’s New York booking agent was also not a California licensed talent agent, as is required by the TAA, and argued that any such procurement should be considered further violations by McLean. The Labor Commissioner agreed with LMFAO’s counsel, and in fact, noted that McLean “intentionally and repeatedly violated the Act and attempted to hide [his] violations by enlisting the aid of a booking agent, who in fact, was also not licensed to perform the duties of a talent agent under California law.”
Furthermore, the Labor Commissioner found that “McLean’s testimony lacked credibility” and that “the number, frequency and extent of the Act’s violations permeate[d] the contract”, and he therefore declined to apply the equitable doctrine of severance. Accordingly, because the management agreement was found to be “void ab initio,” McLean will not be allowed to collect any amount of the allegedly owed $7 Million, and in fact, must disgorge fees paid to him within the one-year period prior to the filing of the action.
“In my decades of handling Talent Agencies Act matters and acting as an expert witness, I have never before encountered a manager who violated the Act so callously and so frequently,” said Ed McPherson in a statement to The Hollywood Reporter.