With writers firing their agents en masse in the ongoing battle between the WGA and the Association of Talent Agents over packaging and agency-affiliated productions, the burden of keeping the wheels of the TV and film business turning has fallen on attorneys and managers.
The situation has created a legal dilemma for lawyers — can they continue to negotiate deals for writers without working in tandem with a franchised representative, which only agents are? Based on my conversations with multiple entertainment attorneys who have analyzed the issue, a number of them believe they could despite the “pencils down” strategy other Hollywood lawyers and the ATA are advocating.
This is a crucial issue which, depending on the outcome, could either allow for dealmaking to continue with agent-less writers or paralyze Hollywood. Since there is so much confusion and uncertainty in the entertainment business right now, we are trying to cover multiple points of views and provide as much information as we can from all sides. But before I lay out those lawyers’ case, here is the issue.
The core controversy stems from California’s Talent Agencies Act, which has been a focus of dispute since it became law in 1978. The act declares that “no person shall engage in or carry on the occupation of a talent agency without first procuring a license therefore from the Labor Commissioner.”
The WGA, which recently proclaimed that it would deputize lawyers and managers to take over agent duties in representing their writer clients, earlier this week claimed that any concerns about the legality of their action “are based on a misunderstanding of the Talent Agencies Act.”
“Nothing in the Act limits writers’ right to receive necessary representation, including from the managers and attorneys who have long provided representation services separate and apart from the services provided by agents,” WGA West president David A. Goodman said in the letter.
ATA hit back yesterday.
“The law is crystal clear,” ATA executive director Karen Stuart wrote in a letter of her own. “There are multiple decisions from the California Labor Commissioner holding that no one other than a licensed talent agent — not a manager, not an attorney — can procure employment on behalf of an artist. It is important to note that ‘procure’ in this situation includes all negotiations on behalf of an artist.”
One of the most prominent among the cases cited by the ATA was the California Labor Commissioner in 2013 declaring an engagement contract between KNBC-Los Angeles sports reporter Mario Solis and attorney James Blancarte was “illegal under the state’s Talent Agencies Act.” (You can read the entire letter by the ATA attorneys to the WGAW board with their legal arguments under the post.)
“By negotiating the KNBC agreements on petitioner’s behalf, respondent attempted to procure and procured employment for petitioner. As a consequence, respondent engaged in and carried out the occupation of a talent agency,” the ruling said.
The other disputes all had similar outcomes. But despite that, the attorneys I spoke with are pretty confident they can make a case for lawyers negotiating clients’ deals without the involvement of agents. That refers to the actual deal-negotiating only, not WGA’s alleged right to delegate authority by empowering attorneys and managers.
The attorneys note that all the decisions in the area have been made by the Labor Commissioner, but the cases had not gone in front of a judge. (There is no record of any going to appeal.) They characterize them as “not good” legal decisions because the Labor Commissioner did not perform the required statutory construction analysis, and believe those decisions would likely be reversed on appeal.
The attorneys also argue that the Talent Agencies Act, in which lawyers are literally not mentioned, does not apply to lawyers, a point of view that is the subject of much debate in the Hollywood circles right now and no consensus. Here is more of their statutory interpretation (focused on California):
Attorneys are exclusively authorized to practice law in the state of California by the State Bar Act, established in 1927. The practice of law has been interpreted over and over again by many courts over the years to include the negotiating of an agreement.
Does the Talent Agencies Act have the power to restrict what a lawyer can do with the practice of law by stipulating that only agents can procure work, including negotiations?
According to the lawyers I spoke with, there is nothing in the Talent Agencies Act — created decades after the State Bar Act and most recently enacted and extended in 1986 — or in the legislative history that expresses or implies any intention to repeal or modify the rules applicable to lawyers. The rules in California stipulate that you have to presume the Talent Agencies Act did not make any changes to what the State Bar Act allows, the attorneys say.
On the other hand, the Labor Commissioner’s argument has been that lawyers are covered by the Talent Agencies Act; it does not list an exception for lawyers, therefore they cannot procure work/negotiate deals.
The attorneys I spoke with interpret the lack of mentioning of lawyers in the document differently. They argue that, in order for the Talent Agencies Act to enact any kind of change in what the State Bar Act permits, limiting the scope of the practice of law for attorneys so they no longer can negotiate an agreement, it would either have to contain an expressed declaration that was trying to change the State Bar Act or the court would have to find that the State Bar Act and the Talent Agencies Act are so inconsistent they can’t operate at the same time without contradicting one another.
According to the attorneys, a way you can interpret the two statutes so they don’t contradict one another is that the Talent Agencies Act regulates persons who want to engage in the occupation of being a talent agent, but when lawyers are representing clients in the negotiation of an employment agreement, they are engaging in the occupation of practicing law, not in the occupation of a talent agency.
For decades, it’s been recognized that lawyers, as part of their professional obligations and rights as licensed attorneys, are allowed to negotiate agreements on behalf of their clients, and there is nothing in the legislative history of the Talent Agencies Act that suggests lawyers have to be covered by the Talent Agencies Act on that issue. So, according to the lawyers I spoke with, the ultimate goal of construing two statutes some say may conflict is to try and interpret them in a way that avoids an “absurd result.”
In order to avoid an absurd result, you have to find that the Talent Agencies Act is inapplicable to lawyers because otherwise it would be authorizing agents to practice law without a law license, and would be prohibiting lawyers from engaging in their profession in one specific area for which there is no articulated policy why that makes any sense. (Some agents have legal backgrounds.)
Any interpretation that would say lawyers can’t represent clients in the negotiation of an agreement, which is a central part of the practice of law, would wind up producing that absurd result where agents who aren’t licensed to practice law can do it but lawyers can’t, the lawyers I spoke with say. Because of that, they believe that there is “a good chance” a court would ultimately come to the conclusion that lawyers are not covered by the Talent Agencies Act.
Their theory may be tested soon.
ATA on Thursday stated that they “are evaluating all legal options to address” WGA’s “unlawful conduct,” referring to several issues — including other reps besides agents negotiating deals.
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