Archive for the ‘Independent Contractors’ Category

Artist Visa Updates, Non-Compete Agreements, Manager/Agent Trust Accounts, 1st Amendment Poop Jokes

Wednesday, April 5th, 2023

LAW & DISORDER

Performing Arts Division

April 6, 2023 

INSIDE THIS ISSUE:

• Artist Visa Updates

• Non-Compete Agreements

• Manager/Agent Trust Accounts

• Is There A Constitutional Right

To Poop Jokes?

 

Artist Visa News & Nausea 

• The Status of Proposed Petition Fee Increases

Thanks to all of you who took the time to write USCIS and the denizens of Congress to object to USCIS’s loathsome proposal to raise petition fees by 300%. A lot of people have since been asking what happens next and what to expect. It’s hard to say. Typically, when USCIS imposes new rules and policies they give 60 – 90 days advance notice. In this case, should USCIS decide to implement the fee increases, my belief is that various lawsuits will be filed to enjoin them from going into effect while they are challenged in court.

So, while you can expect nothing to change within the immediate future, beyond that is anyone’s guess. I know that the lack of certainly is going to make it hard when budgeting for 2023/2024 tours, but nothing about getting visas for artists to perform in the US has ever been a bedrock of dependability or predictability.

• DOS Increases Visa Stamp Application Fees

Speaking of fee increases, not to be upstaged by its nefarious cousins at USCIS, the US Department of State announced on March 28, 2023 that US Consulates will be raising the minimum fee for visa stamp applications from $190 to $205 effective 5/30/23. I’d like to say that this will allow them to hire additional staff to address the significant backlogs and delays that continue to plague US Consulates around the world, but I would be lying if I said that. Instead, except in rare, dire, and unusual circumstances, no one should expect to submit a visa stamp application at most US Consulates and get the visa stamp back in less than 2 – 3 weeks, or longer. In other words, whilst I do not in the least disagree with the indignant music director who sent me an email complaining about the “iniquitous absurdity” of a US Consulate refusing to accommodate his tight international performance schedule, he nonetheless still had to wrench up his big boy pants and accept the cruel slap of indifferent reality.

• Current USCIS Service Centre Processing Times:

Vermont Service Centre: Standard processing: 6 – 8 weeks

Premium processing: 9 – 10 days

California Service Centre: Standard Processing: 3 – 4 months!

Premium Processing: 13 – 14 days

If some of you have filed petitions at the California Service Centre and receive a notice that your petition is being transferred to another service centre DO NOT PANIC. To deal with backlogs, USCIS is randomly transferring petitions to other service centres.

• Request for Evidence (RFE) Alert:

In circumstances where managers/agents have filed visa petitions in which they have also signed the US engagement contracts on behalf of their artists, we have recently been seeing USCIS issuing RFEs asking for (i) proof that the artist has authorized the manager/agent to sign on their behalf and (ii) proof the both the artist and each presenter have authorized the manager/agent to be the petitioner. While you “could” just provide USCIS with copies of management/agent agreements and include petitioner appointment language in all engagement contracts, that would presume a USCIS examiner will read them much less comprehend multisyllabic words. Its simpler just to have everyone—the artist and each presenter/venue—sign a piece of paper saying “I appoint X to be the Petitioner.”

Legal Issue of the Month:

Are non-compete/non-solicitation agreements a thing of the past?

Whether it’s a management company hiring an associate or a non-profit organization hiring a development director, its not uncommon in the arts and entertainment industry for employment contracts to include non-compete provisions which generally serve to prevent employees from taking jobs with an ex-employer’s competitors or clients for a certain period of time after they leave.

On Jan. 5, 2023, the Federal Trade Commission released a proposed rule that would bar employers from making workers agree to non-competes. The proposed rule is based on a preliminary finding that non-competes constitute a form of unfair competition in the labour market, lowering wages, and stifling innovation, among other issues, and therefore violate Section 5 of the Federal Trade Commission Act. The proposed rule, as written, would apply to independent contractors and unpaid interns as well as employees, and it would make companies retroactively rescind non-competes they’ve already secured.

Non-solicitation agreements, whereby employees are forbidden from soliciting existing clients, customers, or employees of their employers, as well as agreements that prevent ex-employees from using or disclosing the proprietary, non-public information of their ex-employers (such as engagement contracts, books and records, tour budgets, etc.) would continue to be valid provided they are narrow, targeted, and not silly. For example, presenter and venue contact information, or anything that could be found on its own just by asking someone else or through a google search is neither proprietary nor confidential.

As most courts will not enforce broad non-competes and non-solicitation agreements anyway, this new rule would prevent employers from bullying or threatening their employees with frivolous lawsuits by not allowing such provisions to be in a contract in the first place.

Dear Law and Disorder:

Actual questions we get asked and the answers people actually don’t want

“Manager/Agent Trust Accounts”

Dear Law and Disorder:

I am considering working with an agent, but almost every agent I speak with wants to collect my engagement fees on my behalf. Why can’t I collect my fees and just pay the agent? If an agent collects my fees, should I ask for a separate bank account? What about statements? Is it reasonable to ask for monthly accountings? When do I get paid? What’s standard?

First, and foremost, nothing in this business is “standard.” Yes, there are penchants and preferences, but if you took a poll of 50 people in our business and ask what is “standard”, you’d get 50 difference answers—with all 50 basing their definition upon their own self-interest. So, if anyone tries to force you into an arrangement you don’t want by claiming its “standard” or “this is what everyone does”, run away! If parties truly want to work together, everything is negotiable.

All that being said, it’s not uncommon for an agent or manager to prefer to accept fees on behalf of an artist. Among the very legitimate reasons for this, it allows artists to focus on performing and not bookkeeping, especially when on tour, and allows the agent to follow up on contracts, payments, and other logistical issues on an artist’s behalf. It’s also easier for an agent to collect fees, deduct commissions, and send the balance to the artist rather the agent having to issue an invoice or chase down an artist who, again, may be on tour or simply abstains from reading any emails that contain the subject line “balance due.”

Both licensed and un-licensed agents are legally required to keep all collected money in a separate account and issue statements accounting for all money collected and held on behalf of an artist. Keeping money in a separate account not only makes booking and accountings easier, but also helps to ensure than an artist’s money doesn’t accidentally get co-mingled with the agent’s own money. Also, in the event an engagement is cancelled, a deposit may need to be returned. Having the money held in a separate account ensures that the funds are not prematurely dispensed, or used for unrelated purposes, for which both the artist and agent could be liable.

Is There a Constitutional

 

Right To Poop Jokes?

The US Supreme Court is poised to address one of the most epochal issues on everyone’s mind: is there a 1st Amendment right to tell poop jokes?

Currently before the Supreme Court is Jack Daniel’s v. VIP Products wherein VIP Products, the nation’s second-largest maker of dog toys, is accused of infringing upon the whiskey maker’s trademarked bottle shape and label by manufacturing and selling squishy dog toys that resemble a bottle of Jack Daniel’s with the label showing a dog and the by-line “dropping the old No. 2 on your Tennessee carpet.” While traditional parody exceptions already in place would normally support VIP, Jack Daniel’s contends that the value of its trademark will be diminished if people begin to think its product makes dogs poop. So, VIP has responded by arguing that the 1st Amendment supersedes Trademark Law and allows parody to cross any lines or restrictions, regardless of how offensive or objectionable to the party being parodied—which would be a superfluous argument in most cases had not several lower federal courts agreed.

Notwithstanding the fact that so many of its customers apparently serve whiskey to their dogs that Jack Daniel’s is concerned with lost sales, should VIP prevail it would essentially eliminate trademark law when it comes to parody. It’s a classical example of an inane case brought purely because litigators are willing to litigate anything if you pay them enough, the outcome of which could have larger consequences: Does a 1st Amendment claim of parody automatically allow anyone to use another’s name, song title, or logos without restriction and under any circumstances, whether its by association with poop, porn, or politicians, regardless of the owner’s objections or concerns?

For those of you who feel so moved, you can read more about this here:

www.vox.com/politics/23650136/supreme-court-poop-jokes-jack-daniels-vip-dog-toy-trademark-lanham-act

Deep Thoughts

“With enough spizzerinctum, there’s almost nothing you can’t accomplish.”

Cynthia Bowes-Palmer

 

 

 

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GG Arts Law provides a comprehensive range of legal services and strategic support for the performing arts, including: Artist Visas, Taxes, and Touring; Rights & Licensing; Negotiations & Representation; Contracts; Business & Non-Profit Organization & Management; Project Management; and Strategic Consulting & Planning.

 

OFFICIAL LEGALESE:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a threatening email, filing a lawsuit, or basically doing anything that may in any way rely upon an assumption that we know what we are talking about or one size fits all!

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Posted in Contracts, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Trademarks, Visas | Comments Closed

A CORONAVIRUS VISA ROUNDUP FOR NON-US ARTISTS

Tuesday, March 31st, 2020

Cancelled Engagements, Unemployment, Layoffs, and Visa Renewals

March 31, 2020

By Brian Taylor Goldstein

As the tumbleweeds blow through Times Square and we begin to consider the viability of Easter peeps or even kale to supplement the dwindling toilet paper supplies, there is an understandable amount of angst and confusion on many fronts. Not least among them are non-U.S. artists who find themselves trapped inside the U.S. with no engagements, or with visas about to expire, or, like so many, laid off or unemployed.

There is a lot of conflicting information out there primarily because U.S. immigration policies are determined by the U.S. Government which has provided little or no direction on these issues; they are far too engrossed trying to quell the spread of the Coronavirus through sacrificing chickens, burning witches, assessing blame, and finding new and enthralling ways of praising and consoling Our Dear Beloved Leader and Perfect Incarnation of The Appearance That A Leader Should Have.

So, in no particular order, here is an update of what we know (or sort of know based on what we can surmise from what we know.) Premium Processing

1. Premium Processing
In case you have not already heard, USCIS suspended Premium Processing effective March 20, 2020. Until further notice, any future petitions filed with premium processing will automatically be sent to standard processing and your premium processing fee returned. Current standard processing times are ranging from 3 – 6 months at both of the paradoxically named USCIS “service” centers.

2. Artists Trapped In The U.S.
Due to the quagmire of travel restrictions, cancelled flights, and border closures, there are a number of artists who find themselves stranded in the U.S. with visas about to expire and who are unable to leave. Has USCIS has made any special exceptions or provisions for artists who may be forced to remain in the U.S. beyond the expiration date of their visa until they can fly home? Certainly, they will not be rounded up as enemies of the state? To the contrary, if an artist finds themselves in the U.S. in such situation, then before their current visa expires they will need to file a petition either to extend their current status and extend their stay, or change their current status to a different status and remain.

Here’s a real life question we received on this issue:

My O-1 visa expires in May. I was approved for a new one starting in August. My petitioner did not ask for an extension of stay because I was supposed to fly home for a summer festival, but that has been cancelled and now I want to stay in the U.S. What are my options?

If the artist has some engagements in the U.S. between May and August (which is unlikely, but possible), then prior to May she could file a new I-129 petition (which would basically be the old one re-copied and re-packaged) asking for an extension of stay. However, if she does not have engagements to justify her remaining in the U.S. on an employment visa, then prior to May she will need to file an I-539 petition to change her status from O-1 to visitor (B-1/B-2). Of course, to file a new I-129, she will need to pay the USCIS filing fee of $460. To file an I-539, she will need to pay the USCIS filing fee of $370, plus a biometric fee of $85. Biometrics consist of going to a local USCIS office to be photographed and provide fingerprints. However, all local USCIS office are all closed. So, presumably, the I-539 petitions will just get put on hold—which is probably a good thing as she can stay in the U.S. while the petition is pending. I should point out that in 99.99999% of cases, I-539 petitions are denied, so they are really only useful to buy time.

3. Consulates
Most of the U.S. consulates around the world have closed. London, for example, is currently not taking appointments until July. We do not know when they will re-open. We asked the U.S. Department of State and were told: “April! No, June? Wait! They’re closed? They’ve always been closed. I mean, open. They’re open now, just closed to the public. Temporarily.”

4. What Happens To A Visa If An Artist Is Laid Off?
Here’s another real life scenario:

We are looking for information about the impact of layoff on our O-1 visa holders. The remainder of our performance season has been cancelled. At this time we are continuing to pay our performers as per the schedule that is in their contract. Unfortunately the possibility of a layoff is looming. How would this impact the O-1 visa holders? Are their visa’s invalidated if we have to do layoffs?

Fortunately (sort of), as non-US artists are required to have artist visas to perform in the U.S. regardless of whether or not they are paid, a layoff, per se, does not impact the validity of their O-1 visas. Rather, the issue is whether or not the artist’s services will be required at all. In other words, are we dealing with a cancelled performance or a re-scheduled performance?

If an artist was approved for an O-1visa to perform in a specific engagement or production, and that engagement or production is cancelled, then they are required to leave the U.S. as, unless they were approved for a multi-employer visa, they no longer have a reason to be here. However, if the scheduled performances are merely being re-scheduled for a later date during the validity period of the artist’s existing visa, and the artist’s services will still be needed, then I would argue that they can remain in the U.S. regardless of whether or not they are paid—they just won’t be able to work. In other words, a layoff means they are still employed, just not getting paid.

Whether or not the artist can afford to remain in the U.S. without being paid is another issue entirely…and which leads to the next question.

5. What Is The Impact On A Visa If an Artist Applies for Unemployment or Medicaid?
Here’s a hard one:

As you probably already know, all of my concerts until June have been cancelled, thus putting me into a difficult situation financially. I wanted to consult with you whether it would be a good idea for me to apply for unemployment benefits, or is that going to jeopardize my current O-1 status and future potential status?

Unfortunately, this creates two not insignificant problems:

  • (a) Under Trump’s recently enacted “public charge rule,” applying for any kind of public assistance (unemployment, Medicaid, etc) could be used to deny and/or delay future visas or green cards. When the artist next needs to obtain a new O-1, if he elects to remain in the U.S. and seeks an extension of stay, he would need to disclose that he applied for and/or received public assistance. This will lead to his being required to explain why and seek a waiver. USCIS has indicated that they will be “reasonable” in light of the Covid-19 situation, but we have no idea what that means. I trust USCIS about as much as trust my mother when she asks for my honest opinion. Alternatively, the artist could avoid this question by leaving the U.S. when his current visa expires, applying for a new visa at a U.S. consulate, and then re-entering. However, should at some point in the future he want to apply for a green card, he would need to disclose the public assistance and request a waiver at that time.
  • (b) The other problem is that O and P visas are “employment-based” visas, which means an artist is only authorized to be in the U.S. on such a visa if the artist has employment. If an artist becomes unemployed, they are not authorized to remain in the U.S. and look for work. They are required to leave. So, applying for unemployment benefits equates with admitting the artist is here illegally.

6. Requests for Evidence and Notices of Intent to Deny
USCIS has announced that any petitioner who receives a Request for Evidence (RFE) or Notice of Intent To Deny (NOID) between March 1 and May 1, 2020, will be given an additional 60 calendar days to respond after the response deadline set forth in the RFE or NOID. However, USCIS will continue its policy of employing rabid ferrets to write the RFEs.

7. Can A Visa For A Cancelled Concert Be Reissued?
Here’s a question from a dear soul who believes that if we just clap hard enough, Tinkerbell will grow her wings back:

We got an artist approved to perform for us in June. That date, of course, has now been cancelled. However, we have rescheduled the concert for the 20/21 season. Since we already applied for the visa and got it approved, and given that we only had to cancel because of the coronavirus, will USCIS re-approve the visa for the new date without having to file a new petition and go through the process all over again?

As my mother would say: “Bless his heart,” which, in the South, is the kind of thing one says when Charlene gets her head stuck in the fishbowl again…for the 3rd time. No, he will need prepare and submit an entirely new petition, and pay all of the costs and fees again. Because of all the cancellations due to the Coronavirus, the Performing Arts Visa Task Force (a long established coalition of leading arts organizations throughout the field—from the League of American Orchestras to the Association of Performing Arts Presenters) has asked the U.S. government to consider allowing approved visas to be re-authorized to cover re-scheduled dates without having to pay any new filing fees or costs. However, just to be on the safe side, I have added the same request in my letter to Santa Clause as I have greater faith in him making my wishes come true than I do USCIS.

Ok, folks. That’s all I got. Until everything changes tomorrow. As always, continue to check our website and Musical America for more frequent updates.

Stay safe and well!

For additional information and resources on this and other legal, project management, and business issues for the performing arts, as well as to sign up for our newsletters and follow us on social media visit ggartslaw.com

THE OFFICIAL LEGALESE:
THIS IS NOT LEGAL ADVICE!
The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Artist Management, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Uncategorized, Visas | Comments Closed

CAN A U.S. ORCHESTRA REFUSE TO PAY A NON-U.S. MUSICIAN?

Tuesday, February 27th, 2018

By Brian Taylor Goldstein

Dear Law and Disorder:

I am a musician on an O-1 visa that my agent got for me. It covers multiple engagements. Last September, I was hired to be a section musician with an orchestra. They have been paying me up until now, but now they are saying that legally they have to withhold my paycheck and can’t pay me because they just realized my visa does not name them specifically and I have to get another one just with their name on it if I want to get paid for the last two weeks. If I don’t, they say they have to fire me. They checked with their lawyer and he says its because their musician contracts require them to pay me as an employee and that my visa only covers independent contractors, not employees. He says that according the USCIS regulations [8 CFR 214.2(o)], employers must be listed on separate O-1 petitions where it says “employer” on the form. Is this true? I thought the O-1 allowed me to work for whomever I wanted because it was a multiple-employer O-1.

Sadly, we get this question a lot. To be fair, U.S. tax and immigration laws and regulations are a huge, big, stinking pile of insanity. Fortunately, most of the folks in our industry who work regularly with foreign artists make at least a valiant effort to figure out the rules as best they can, either by consulting experts or colleagues or through their own research. Unfortunately, there are others, be they forgotten in the bowels of a hugely complex institution or trapped in their own dark worlds of paranoia, anal retention, and over-simplicity, who do not. These include most, but, by no means all, of the following: (1) the international student officers and offices of most schools and universities; (2) the personnel directors of small orchestras; and (3) any non-profit with a volunteer attorney who only practices insurance law, but claims to be an expert on all subjects.

It appears that you have been dragged into the dark world of numbers (2) and, perhaps (3).

The O-1 visa category is not only available for artists, but also for the field of business, science, education, and athletics. Technically, the sodden-witted pignut at your orchestra is correct that, in most instances, an individual with an O-1 visa who works for more than one employer must file a separate petition for each employer. HOWEVER, he or she is ignoring the fact that USCIS regulations 8 CFR 214.2(o)(2)(iv)(D) provides an exception for artists (and ONLY artists) as follows:

In the case of a petition filed for an artist or entertainer, a petitioner may add additional performances or engagements during the validity period of the petition without filing an amended petition, provided the additional performances or engagements require an alien of O-1 caliber.

Moreover, for purposes of work authorization, USCIS does not make distinctions either between full-time and part-time employment or between employees and independent contractors. Why? Because as we try to remind everyone again and again and again and again and again: U.S. law requires anyone who “provides services” in the U.S. to have work authorization regardless of whether or not they are paid for such services. So, as a work visa is required even if an artist performs for free, the manner in which they are paid is irrelevant for immigration purposes.

Admittedly, what adds to the confusion is that USCIS requires the same USCIS form (i-129) to be completed not just for O-1 visa petitions, but for a whole alphabet of other visa petitions as well: E, H, P, L, M, R and Q, among others. Because of the government’s “one-size-fits-all” mentality, the i-129 form uses the broad term “employer” to cover every possible scenario in which one person can engage the services of another. In other words, USCIS does not use the term “employer” to refer exclusively to an “employer/employee” relationship.

The issue of whether or not an individual performing services for another should be paid as an “employee” or “independent contractor” is determined by various federal and state regulations, laws, and authorities, such as the Department of Labor and the IRS. USCIS is part of the Department of Homeland Security. Once it authorizes someone “to work”, it simply doesn’t care about how, or even if, they are paid. That’s not in its purview. Which means that, so long as your O-1 authorizes you to provide services to more than one entity, then you can be paid either as an employee or independent contractor. Your orchestra is not violating U.S. immigration law by paying you as an employee.

Amusingly, your orchestra is actually finds itself in even greater peril by refusing to pay you for work already performed. The same state federal and state regulations, laws, and authorities that determine whether or not someone is an employee or an independent contractor, also make it explicitly clear that it is illegal to refuse to pay someone for work already performed based on a claim that they violated immigration law. Its perfectly acceptable—nay, required—to refuse employment to or fire someone who is not legally authorized to work in the U.S. However, that does not apply retroactively. If the work has been performed, even illegally, the worker must be paid. Otherwise, unscrupulous employers would just hire foreign workers and then refuse to pay them. Work authorization and payment are to very different things!

So, there’s your answer. However, getting your orchestra to understand or accept this reality may not be easy. People in the aforementioned categories prefer simple answers to complex questions and are often loathe to accept nuance. So, here’s simple suggestion: Are you or your orchestra a member of the American Federation of Musicians? If so, stop reading this and call AFM now. Trust me, they will be more than happy to make this matter very simple for the orchestra indeed!

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For additional information and resources on this and other legal, project management, and business issues for the performing arts, as well as to sign up for our newsletters and follow us on social media visit ggartslaw.com

To ask your own question, write to lawanddisorder@musicalamerica.com

All questions on any topic related to legal, management, and business issues will be welcome. However, please post only general questions or hypotheticals. Questions will be answered ONLY in future blogs. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously and/or posthumously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

 

 

 

 

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Posted in Arts Management, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Visas | Comments Closed

When To Negotiate A Contract

Tuesday, April 30th, 2013

By Brian Taylor Goldstein, Esq.

Dear Law and Disorder:

A successful duo I represent has recorded a CD which is being released by a record company. Although the artist made attempts to obtain a contract, because of time restraints, according to the record company, it was only possible to give a contract AFTER the recording was made. The terms include exclusivity universally for several-year options, and although the company paid for the recording and manufacture of the cd, these costs will come out of the royalties.  The company controls the cd universally with power of attorney from the artists. To obtain copies, the artists buy the cd at a reduced price.  The company insists these are normal terms which are standard practice and always given after the recording is made.  This is news to me.  Can this be true?

In my ideal world, among other things on my wish list, every artist, manager, agent, presenter, producer, arts lawyer, and arts administrator would have a sign above their desks stating: “Nothing is Standard!” While it is true that there are many terms and practices which are more common than others and while it is also true that certain financial arrangements and commitments will necessarily lend themselves to certain expectations in return, everything is negotiable. This does not, of course, mean that you will get everything you want. Rather, depending on the negotiating strengths of the parties, everyone is free to ask and propose whatever they want. Think outside the box. Get creative.

However, while creative proposals may be limitless, the time to propose them is not. The time to negotiate is before services are rendered, significant time is spent, or money changes hands. Thus, the real issue at the heart of your question is your comment that “because of time restraints, according to the record company, it was only possible to give a contract after the recording was made.” In my experience, I have yet to encounter a situation that was so dire and immediate that at least some basic understandings of key terms could not be mutually agreed upon ahead of time.

Sadly, it’s not uncommon in the arts and entertainment world for the artistic aspects of a project to proceed on a completely separate track and pace from the administrative and business details. New works are created or composed before the commission agreements are in place. Recordings are made before the recording contracts are signed. Engagements are scheduled and sometimes even performed with no engagement agreements. I’ve even known artists to collaborate with one another and then try, almost always unsuccessfully, to negotiate a collaboration agreement after the work has been optioned for production.

Of course, some of this is understandable. Contractual terms can be confusing, especially when the parties are unfamiliar with business practices and terminology. Also, it can take such considerable effort just to coordinate the funding, schedules, and parties that no time is left for negotiating contractual terms. Also, its not uncommon for different individuals and departments within a large organization or institution to address artistic planning and scheduling separate and apart from contractual and business planning without communicating or coordinating with one another. But, whatever the reason, this phenomenon is unfortunate because it makes it much harder to negotiate favorable terms or, at the very least, to manage expectations, avoid potential conflicts, and make informed decisions.

The biggest—and, often, only—power an artist has in a negotiation is the power of “no”—that is, the power to say: “I’d rather pause for a moment, even it means losing the deal or opportunity, than enter blindly into a relationship where I may have no control over my creative services.” Of course, it can be equally bad for record companies, producers, and presenters who can find themselves investing both time and money without getting the rights or return they anticipated. While saying “no” or “stop” can sometimes cause a lost opportunity, the alternative is a bad or unfavorable deal that, ultimately, could prove worse.

Without a doubt, legitimate practicalities, including artist availability and opportunity costs, can often make it difficult for a formal contract to be drafted up in advance of every occasion. However, there is rarely a legitimate reason why parties cannot at least mutually agree upon basic terms, with a more formal agreement to follow. Remember, a contract is a written memorialization of an existing agreement. Until an agreement exists, there is nothing to memorialize. Without terms agreed upon ahead of time, there is no contract to draft.

In any situation, if time is of the essence, never wait for the other party to provide a contract or propose terms. You may need to make the first move. In your situation, if the record company refused to provide a contract, then your artists could have proposed their own terms or set out their own requirements for proceeding with the recording. If your artists are truly as “successful” as you indicate then chances are the record company would have agreed to an outline of reasonable terms. When you say that your artists “made attempts”, that should have included writing:

“Dear Record Company, while we are very excited about the prospect of working together, unless we can arrive at a mutual agreement of some basic terms, we will be unable to proceed with the recording as scheduled. Thus, we are proposing the following…..”

Contractual terms do not, and should not be, a confusing quagmire of legalese. Write your proposals in clear, understandable language. The key is to be detailed, not convoluted. As even the most experienced artist managers can find themselves daunted by the prospect of proposing terms for recording contracts and other multi-media deals and transactions, you would be wise to bring in some specialized help.

Ultimately, in your situation, if the record company paid for the recording without negotiating the contract, then they took the risk that no agreement would be reached and that your artists could simply refuse to permit the recordings to be released. That would leave the recording company with a worthless product. Of course, your artists wouldn’t own recordings they didn’t pay for, so they would have nothing to show for their time. Everyone loses. Hopefully, the potential of mutual self-destruction will force the parties into coming up with the reasonable compromise that should have been agreed to ahead of time.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ggartslaw.com

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Agents, Artist Management, Arts Management, Contracts, Copyrights, For Profits, Independent Contractors, Law and Disorder: Performing Arts Division, Licensing, Music Rights, Non-Profits, Presenters, Publishing, Recordings, Touring, Venues | Comments Closed

Independent Contractors or Employees: What’s In A Name?

Wednesday, April 3rd, 2013

By Brian Taylor Goldstein, Esq.

Dear Law and Disorder:

I hire musicians to perform, with me. Are they employees or independent contractors? I do not deduct taxes from what I pay them. Should I also make them sign a contract stating that they are independent contractors?

Contrary to what many believe, the distinction between who is an independent contractor as opposed to an employee is not as simple as merely making them responsible for their own taxes (and issuing them a 1099) or making them sign a contract or other document in which they affirm that they are an independent contractor. Like many legal relationships in the arts, “titles”, while not entirely irrelevant, do not in and of themselves carry any legal significance. Instead, determining whether a hired musician (or anyone you hire to provide services for you) is an employee or an independent contract requires an analysis of both state and federal regulations.

A person is an independent contractor only when free from control and direction in the performance of their services. As independent contractors are not covered by unemployment insurance laws, labor standards, or safety and health regulations, each state, as well as the federal government, have established various “factors” concerning the nature of the relationship between the parties which are used to determine whether or not a person is an employee or an independent contractor. These factors include how a person is paid, the amount of control you have over them, where their services are performed, how their services are performed, whether or not they are part-time or full-time, and even whether or not the person you are hiring is “incorporated” as a business or merely uses a “dba” and is a sole proprietor. All factors concerning the relationship between the two parties must be taken into consideration. No one single factor is controlling, nor do all factors need to be present to establish the nature of the relationship.

Not surprisingly, the “factors” can differ from state-to-state, with some states applying a more liberal analysis than others. Whereas, in some states, its almost impossible for anyone to hire an individual as an independent contractor unless the individual is incorporated as a C-corporation, S-corporation, or a limited liability company, other states afford more discretion to the employer to determine how to classify the people they hire. And the federal government has its own set of factors and guidelines. As a result, its not uncommon for the same person to be classified as an independent contractor for federal purposes (IRS, US Department of Labor, etc.) and an employee for purposes of state unemployment law and state taxes.

While all the various factors must be considered, in almost all cases the most significant factor is whether the party contracting for the services exercises, or has the right to exercise, supervision, direction or control over someone they hire. In the case of musicians and other performers: do you hire them to show up and perform their own music in whatever manner they want? Or do you direct them? Do you require them to attend rehearsals? Can they wear whatever they want or do you require specific costumes or clothing? In general, musicians or other performers who are paid to perform and are told/directed what to perform, how to perform it, where to perform, and what to wear are almost always considered “employees”, if not by the federal government, then by most state governments.

The only way to answer your specific question is to apply the applicable state and federal factors and guidelines to your specific circumstances. However, the New York State Department of Labor actually has specific guidelines and factors for determining whether performers are employees or independent contractors. You can find them at http://www.labor.ny.gov/formsdocs/ui/ia318.17.pdf Whether or not you are in New York, this is a good place to start.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ggartslaw.com

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Contracts, Employees, For Profits, Independent Contractors, Insurance, Law and Disorder: Performing Arts Division, Liability, Limited Liability Companies, Non-Profits, Venues | Comments Closed

Do We Need Visas For Orchestra Support Staff?

Wednesday, July 18th, 2012

By Brian Taylor Goldstein

Dear Brian:

We are touring an orchestra in the United States next season and have been grappling with the idea of whether the staff from the concerts team need to have visas for this tour, regardless of whether they are employees or freelance (we’ve had different opinions expressed). In the past, we have always included our orchestral manager on the visa petition because she is a full time employee, but the concerts team staff are rather different, not least because they are usually hired only for the tour, nothing else, and will not be on tour for the whole time and are therefore not an intrinsic part of the artistic production. They receive no payments or salary in the US and, thus, earn no income in the US. Do you have any thoughts on this? If we get them visas, would they all have to travel together? Would we need two separate petitions? Does this cost more depending upon the size of the concerts team?

The need for a US work visa (O or P) is triggered by work, not payment. Anyone who provides services in the US, whether on the stage as a performing artist, or behind the scenes as part of the technical crew, administrative staff or tour support team, all require work visas–regardless of whether or not they are paid in the US or whether or not they are even paid at all. Whether or not they are an intrinsic part of the artistic production doesn’t change this.

In the case of orchestras, each of the musicians will require a P-1 visa and each of the non-performing support staff require a P-1S visa. To obtain these visas, you will need to file two visa petitions: a P-1 petition for the performers, conductor, musicians, etc. and a P-1S petition listing the technical crew, management team, administrative support, etc. Filing fees are charged “per petition”, so it costs the same whether the P-1S petition contains 2 people or 20 people. Once approved, each individual listed will need to appear personally at the US consulate and pay a visa fee before being issued his or her visa by a brusque and surly consulate official. P-1 and P-1S visas are valid for the duration of the approved classification period. So, the support staff is free to travel in and out of the US during the tour as needed. Everyone neither has to travel together nor do they have to remain for the duration of the entire tour.

Without exception, in the visas we prepare for our orchestral clients, we simply put all the musicians on a P-1 and all non-musician staff on a P-1S and eliminate the ability of a border guard to frustrate a process already fraught with enough risk and unpredictability from other areas.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Artist Management, Independent Contractors, Law and Disorder: Performing Arts Division, Touring, Visas | Comments Closed

Are We Liable For A Backstage Brawl?

Wednesday, July 11th, 2012

By Brian Taylor Goldstein

Our stage manger slapped one of our actresses during a rehearsal. Are we liable?

Anyone who understands the unique stresses and pressures of the performing arts should expect a certain degree of screaming, emotional meltdowns, tantrums, and other inappropriate behavior. Welcome to the theater. However, physical violence crosses the line and, among other things, can most certainly get your organization sued!

Anytime an individual provides services on your behalf—regardless of whether or not they are an employee, independent contractor, or even a volunteer—you can be liable if they hurt or injury someone “in the course of performing their duties.” Let’s say, for example, that one of your volunteer ushers decides to forcibly eject a patron who refuses to shut off his cell phone, injuring the patron in the process. Your organization could be liable because the usher was performing services on your behalf and was not properly trained or supervised. (The usher could be sued, too, but your organization would be included in the lawsuit.) On the other hand, let’s say you arrange for a volunteer to pick up an artist from the airport and drive him or her to the theater. If, on the way, the volunteer decides to stop and run a few personal errands and gets into an accident, you would not be liable. Once the volunteer deviated from his or her job by running a personal errand, he or she was no longer working on your behalf. Get it? These things are very fact specific.

In the case of your stage manager, was this a personal fight? Just because the stage manager slapped the actress doesn’t necessarily mean your organization is liable if he or she wasn’t acting in the capacity of a stage manager at the time. However, let’s say that the actress refused to follow the stage manager’s directions, a fight ensued, and the stage manager decided, out of frustration or poor anger management skills, to slap the actress. You could most definitely be sued because the stage manager was clearly acting in his or her capacity as a stage manager.

If you had strict written policies prohibiting physical violence, assaults, battery, etc, you could always argue that (1) you had no reason to believe that your stage manager was violent or had assaulted others in the past and (2) that he or she was violating strict company guidelines and procedures. (The stage manager could still be personally sued for assault and battery, but these arguments might get your organization off the hook.) However, now that this has happened, you would most definitely be liable if this ever happened again and you took no steps to prevent another similar incident.

You would certainly be warranted in dismissing the stage manager and refusing to let him or her work with you again. Short of that, at the very least, you should ensure that there are written policies and procedures for all volunteers, employees, independent contractors, and any one else who provides services for your organization. You need to make sure everyone understands that this kind of behavior will not be tolerated.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Liability | Comments Closed

Is A Choral Group Required To Have Workman’s Compensation?

Wednesday, June 20th, 2012

By Brian Taylor Goldstein

Dear Law & Disorder:

We have a non-profit choral group. Our of local public television stations has sent us a contract to record and broadcast one of our concerts this December and they have an item that requires us to have workman’s comp on our entire group. We currently only have 3 staff employees (all part-time) and the performers themselves are not employees. As a non-profit, are we required by law to carry workman’s comp on members of our group?  We are wondering if we can sign this agreement if we don’t carry workman’s comp insurance.

First, and foremost, your non-profit status is unrelated to the issue of workers compensation. Non-profits are subject to the all the same laws, statutes, and regulations as all other businesses. Whether or not you are required to carry workers compensation depends on whether your staff and chorus members are considered independent contractors or employees. This requires an analysis of both federal law as well as the laws of your state. However, in this particular case, such an analysis may be irrelevant.

If you were to enter into a contract with the television station in which you are required to have workers compensation, then you would be agreeing to provide workers compensation whether you are legally required to do so or not. That’s really the whole point of a contract: two parties are agreeing to do things for each other they would not normally be required to do. So, regardless of what the law does or does not require, you cannot just sign the television agreement unless you plan to comply with their requirement. Otherwise, if you signed such a contract and then failed to obtain the workers compensation insurance, you would be in breach.

I suspect that, like many institutions, the television station is using form contracts and boilerplate terms that they themselves probably do not understand. Do not always assume that the other party knows more than you do! Before you do anything, I’d call the station and discuss your situation/concerns with them. Perhaps they will waive the requirement. Perhaps they can agree to allow you to purchase a general liability policy to cover your group in lieu of a workers compensation policy.

However, regardless of whether or not you are “required” to have workers compensation either as a matter of law or by a contract, consider the possibility that if a staff member, a chorus member, or a volunteer were to be injured during a performance or in providing some other service for your organization, your organization could be liable. So, I’d strongly recommend that you obtain a general liability policy to cover injuries to any of your performers, staff, or volunteers who provide services to your organization.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Contracts, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Liability, Non-Profits | Comments Closed

How Do I Draft An Engagement Agreement For My Trio?

Wednesday, May 16th, 2012

By Brian Taylor Goldstein

Dear FTM Arts Law,

I am a manager who will be writing contracts on behalf of a trio. They don’t have a corporation and there is no “leader.” They just get together and perform together. How do I handle their engagement fees so that I do not look like their employer? None of the three wants to collect the money on behalf of the others. So, that leaves me to disperse the money.  I know I must be careful not to appear as a producer or employer, so I want to be sure that I write my contracts properly, as well, handle the payment of fees.  So, when writing the actual contract, do I make it out between all three musicians and the presenter?  What if one of them is paid to his/her corporation? Does this make sense?

This makes absolute sense…and the answer is pretty easy! You want each engagement contract to be between the presenter and each of the individual members of the trio. Something like this: “Presenter hereby engages Musician 1, Musician 2, and Musician 3 to perform at ___________.” The same engagement contract would also specify that the engagement fee would be paid directly to you “as the agent of Musician 1, Musician 2, and Musician 3.” You can even sign the engagement contract, provided it is clear that you are signing “as the agent of Musician 1, Musician 2, and Musician 3.” (I know, you said you were their “manager”, but “manager” is a title that describes your duties. For purposes of determining liability, fiduciary duties, and other legal obligations, managers and agents are both legally considered to be “agents”).

Once you collect the fee, you can pay each of the artists directly. For you purposes, it doesn’t matter whether you pay an artist individually or pay the artist’s corporation. Nonetheless, you must issue a 1099 for the FULL FEE. In other words, if the total engagement fee is $3000, and you take a 20% commission, and everything is split evenly, then you would pay each artist $1000 and deduct a commission of $200 from each payment—but you would also issue a 1099 to each artist for $1000. Why? Because you are working for the artists, they are not working for you. If you don’t want to be perceived, either for liability or tax purposes as their employer or producer, then you need to set up the transaction so it is clear that it is the artists are paying you and you are not paying them. Technically, each artist should issue you a 1099 to reflect that they paid you a commission of $200. However, in my experience, as artists are even more adverse to paperwork and forms than managers and agents, it is highly unlikely that the artists will actually issue you the 1099. It doesn’t matter. You would hardly be the first person who received a payment without an accompanying 1099.  So long as you have issued a 1099 to each artist for $1000 and report your commissions on your income taxes, you are fine. It may drive your accountant a bit nuts, but they’ll deal with it!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Agents, Artist Management, Contracts, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Taxes | Comments Closed