APA San Francisco Co-Chair Christian Peacock posted this message to California APA Members of a situation occurring in California. It is a topic we all should be familiar with. As in any legal issue, APA recommends an attorney be consulted before taking any action. We are not attorneys.
There is a troubling situation that has come to the attention to a number of photographers, producers and clients working in the Los Angeles area. There is a law firm sending demand letters against people who have hired agency-represented talent for employee payment violations. The claims are all basically the same.
The demand letter states the model was a hired employee of the company that paid them. Be it photographer, producer, or acting adverting agency. Therefore, at the end of the shoot they are entitled to be paid in full because they have been fired. They will file a lawsuit against the hiring principal for failing to make timely payments.
A claim will be the fee the model earned multiplied by the number of days up to 30 days until payment. For example, if the model was hired for one day at a rate of $1,000.00 and it takes 30 days for the talent agency to pay them that is a multiplier of 30. $1,000.00 x 30 = $30,000.00. The law firm is seeking $30,000.00 in damages.
There have been a number of these claims appearing and people are starting to want to know what to do. What is the law? What are their legal protections?
The first thing everybody thinks is “Wait a minute I’m hiring the talent through an talent agency. I am not directly hiring them. They are an independent contractor, therefore they are not an employee.”
The law firm states the contrary by using California state labor code section 203 as their argument. The law firm is making the assumption that the model is hired by the photographer/producer/client.
203. (a) If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefore is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment. (b) Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise.
With this argument they think they have found a way to seek money from an untapped resource. There is a cap of 30 days as for which damages are asset. If an invoice is paid beyond 30 days, the maximum the plaintiff can ask for is x 30.
Here is what the California Labor Code 1700 – Talent Agencies Act says about payment of agency-represented talent.
1700.25. (a) A licensee who receives any payment of funds on behalf of an artist shall immediately deposit that amount in a trust fund account maintained by him or her in a bank or other recognized depository. The funds, less the licensee’s commission, shall be disbursed to the artist within 30 days after receipt. However, notwithstanding the preceding sentence, the licensee may retain the funds beyond 30 days of receipt in either of the following circumstances:
What is stated is: we, the production company, are required by law to pay the talent agency directly and there is a thirty-day re-disbursement of funds. We cannot pay the model directly; it’s against the law.
From the best of my knowledge there has been no legal decision made on this argument. This is untested. So far all the claims are still pending or there have been settlements.
I am getting my information from the lawyer who personally worked on one of the first claims against his client, which is a Los Angeles area-advertising agency. At the moment the case is still pending.
Here is my opinion about the matter.
This is a money grab. This law firm thinks they have found a way to make some money with a loophole in the labor code. Like most tort law firms they don’t intend to go to court. They want to settle. Going to court takes a long time and a lot of money. Also there is risk they will lose their argument. If they lose their argument there will be a record of judgment. When further claims are made, defending lawyers will find the decision during discovery. Thus weakening the plaintiffs claim.
I believe there have been a few settlements, but I do not know the amount of them.
Knowledge is power and here is what I know and hope: if everyone in the APA is aware of this, they can make an informed decision with the facts that are out there. This is public knowledge, so there is no of fear slander claims.
These demand letters are all being filed by the same law firm “Muse Law Group” most of the early claims have been with “The Red Agency”. These two entities share the same office suite Beverly Hills. There is a pattern of the practice by these two companies, which could be grounds for unethical practices.
I just found out that there is another law firm sending out such letters. “The Law Offices of Hall & Lim”. Oddly enough this firm shares the exact same address as “Muse Law Group” & “The Red Agency”. Please be aware there are some very shady practices being done. Be advised to protect your pocket book. It could cost you a good sum of money just to react to a demand letter.
The law firm Muse Law Group has sent demand letters with other plaintiffs. All of them being small time talent agencies. Not considered companies of merit. There has been no record of any reputable talent agencies being involved with this practice. They are just as concerned as we are. This can turn on them also. So everybody must be made aware of this scam that is happening.
What to do if there is a claim against you:
The APA advises you speak to a lawyer if you have been threatened.
One more item is the issue to do with hiring real people talent, AKA street cast or non-agency represented talent. You are required by California labor law to pay them at the end of their shoot. I have been doing this practice for many years and it is a very clean way to do business.
Co-chair APA San Francisco Chapter