VOLUME 2 CALIFORNIA LEGISLATURE AT SACRAMENTO 1977-78 REGULAR SESSION 1977-78 FIRST EXTRAORDINARY SESSION ASSEMBLY FINAL HISTORY © SYNOPSIS OF : ASSEMBLY BILLS, CONSTITUTIONAL AMENDMENTS, CONCURRENT, JOINT, AND HOUSE RESOLUTIONS Assembly Convened December 6, 1976 Recessed December 8, 1976 Reconvened January 3, 1977 Recessed March 31, 1977 Reconvened April 11, 1977. Recested June 24,1977 Reconvened August 1, 1977 Recessed September 15, 197 Reconvened Jonvary.3, 1978 Recessed March 16, 1978 Reconvened March 27, 1978 Recessed July 5, 1978 Reconvened August 7, 1978 ‘Adjourned September 1, 1978 ‘Adjourned Sine Die November 30, 1978 Legislative Days. HON, LEO T. MeCARTHY ‘Speoker HON. JOHN T. KNOX HON. VINCENT THOMAS ‘Speaker pro Tempore Assistant Speaker pro Tempore HON, HOWARD L. BERMAN HON. PAUL PRIOLO Majority Floor Leader Minority Floor leader Compiled Under the Direction of JAMES D. DRISCOLL Chief Clerk GUNVOR ENGIE History Clerk1977-78 REGULAR SESSION 1465 A'B. No, 2535—Fazio and Knox (Senators Greene, Presley, and Roberts, coauthors). An act to amend Section 9914 of, to repeal Section 9902.8, and to repeal Chapter 21.5 (commencing with Section 9999) of Division 3 of, the Business and Professions Code, and to amend the heading of Chapter 4 (commencing with Section 1700) of Part 6 of Division 2 of, to amend Sections 1700.2, 1700.3, 17004, 1700.5, 1700.6, 1700.7, 1700.9, 1700.41, 1700.12, 1700.13, 1700.15, 1700.16, 1700.17, 1700.19, 1700.20a, 1700.20b, 1700.23, 1700.24, 1700.25, 1700.26, 1700.27, 1700.28, 1700.30, 1700.31,’ 1700.32, 1700.38, 1700.34, 1700.35, 1700.36, 1700.37, 1700.38, 1700.39, 1700.40, 1700.4i, 1700.43, and 170045 of, to add Section 1700.47 of, and to repeal and add Section 1700.10 of, the Labor Code; relating to talent agencies. 1978 Feb. 15—Read first time. Feb. 16—Referred to Com. on L., E., & C.A. To print, Feb. 17—From printer. May be heard in committee March 19. (Corrected February 23.) April 5—In committe: Set, fist hearing, Hearing canceled atthe request of author. April 10—From committee chairman, with author's amendments: Amend, and te-refer to Com. on L,. E., & C.A. Read second time and amended April 12—Re-referred to Com. on L., Ea, & CA. April 12—In committee: Hearing postponed by committee. April 24—From committee chairman, with author's amendments: Amend, and te-refer to Com, on'L., E., & C.A. Read second time and amended, April 25—Re-referred to Gom. on L., E, & CA. April 95—In committee: Hearing pastponed by committee. y_1—From committee chairman, with author's amendments: Amend, and te-refer to Com, on L., E., & C.A. Read second time and amended. May 2—Re-referred to Com. on L., E, & GA. May 9—From committee: Amend, and do pass as amended, and re-refer to ‘Com, on W.&e M. (Ayes 10. Noes 6.) (May 3.) May 10—Read second time and amended. May 15—Re-referred to Com. on W. & M June 20—From committee: Amend, and do pass as amended. (Ayes 12. Noes 0.) Gune 9.) Read second time and amended. Ordered to third reading. June 22-—Read third une, passed, and to Senate, (Ayes 80. Noes 0. Page June 23—In Senate. Read first time. June 28—Referred to Com. on B. & P. ‘Aug. 11—From committee: Do pass, and re-refer to Com. on FIN. Re-referred to Com. on FIN. (Ayes 5. Noes 0.) Aug. 18Joint Rule 61 suspended. ‘Aug. 22—From committee: Do pass. (Ayes 8. Noes 1.) ‘Aug. 23—Read second time. To third reading, ‘Avg. 90—Read third time, passed, and to Assembly. (Ayes 39, Noes 0, Page Aug. 30—In Assembly, To enrollment. Sept. 12—Enrolled and to the Governor at 5 pm. Sept. 30—Approved by the Governor, Sept. 30—Chaptered by Secretary of State-—Chapter 1982, Statutes of 1978. A.B. No. 2536—Keene. ‘An act to add Section 15853.1 to the Government Code, relating to the state park system. 1978 Feb. "16—Read first tire, Referred to Com. on W.. P., & W. To print Feb. 17—From printer. May be heard in committee March 19. Nov. 30—From committee without further action.CALIFORNIA LEGISLATURE-1917-78 REGULAR SESSION ASSEMBLY BILL No. 2535 7 | Introduced by Assemblyman Fazio February 15, 1978 REFERRED TO COMMITTEE, ON LABOR, EMPLOYMENT, AND CONSUMER AFFAIRS | §| 1700.41, 1700.43, and 1700.45 i the Labor Code, relating to LEGISLATIVE [ agencies. ¢ (1) Existing law contains persons acting as a musician ment agencies. | An act to repeal Section 9902.8 of, and to repeal Chapter: 215 (commencing with Section 9999) ‘of Division 3 of, the Business and Professions Code, and to amend the heading of | Chapter 4 (commencing with Section 1700) of Part 6 of I Division 2 of, to amend Sections 1700.2, 1700.3, 1700.4, 1700.5, 1700.6, 1700.7, 1700.9, 1700.11, 1700.12, 1700.13, 1700.15, 1700.16, | 1700.17, 1700.19, 1700.20a, 1700.20b, 1700.23, 1700.24, 1700.25, 1700.26, 1700.27, 1700.28, 1700.30, 1700.31, 1700.32, 1700.33, P 1700.34, 1700.35, 1700.36, 1700.37, 1700.38, 1700.39, 1700.40, of, and to add Section 1700.47 to, talent agencies. COUNSEL'S DIGEST AB 2538, as introduced, Fazio (L., E., & @.A.). Talent extensive regulations governing booking agency, as defined. Such © agencies are specifically excluded from. the provisions of law dealing with employment agencies. This bill would (i) repeal the specific provisions regulating jnusician booking agencies; and (ii) delete the exclusion for | musician booking agencies from the law governing employ- (2) Existing law regulates persons acting as artists’ manag-AB 2535, —2— “ ers, as defined. ~ This bill would change the scope of such regulation from) artists’ managers to talent agencies, and define talent agen- cies. All references to artists’ managers would be changed to’ talent agencies. Personal managers would also be defined, and provision made for issuance of a license to act in such capacity, ‘This bill would also state the intent of the Legislature that those individuals and organizations previously licensed as musiciari booking agencies shall henceforth be licensed as: talent agencies. ; ‘Vote: majority. Appropriation: no.” Fiscal committee: yes, State-mandated local program: no. The people of the State of California do enact as follows: SECTION 1. Section 9902.8 of the Business and Professions Code is repealed. a a i i é i 12... SEC. 2. Chapter 21.5 (commencing with Section 13° 9999). of Division 3 of the Business and Professions Code 14 is repealed. ' 15 SEC.3._ The heading of Chapter 4 (commencing with 16 Section 1700) of Part 6 of Division 2 of the Labor Code is: 17 ‘amended to read: 19. CHAPTER 4. AnFists: MANAGERS TALENT AGENCIES 21: SEC, 4, Sectiori 1700.2 of the Labor. Code is amended 22 to read: “23: 1700.2. - As used in this chapter, “fee” means: “24: - (a) Any money or other valuable consideration paid or 125: promised to :be paid for services rendered or to be ta ee 99 0—3— AB 2535 rendered by any person conducting the business of an artists: manager a talent agency under this chapter. (b) Any money received by any person in excess of that which has been paid out by him for transportation, transfer of baggage, or board and lodging for any applicant for employment. ‘ (c) The difference between the amount of money received by any person who furnished employees, performers, or entertainers for circus, vaudeville, theatrical, or other entertainments, exhibitions, or performances, and the amount paid’ by him to such employee, performer, or entertainer. SEC. 5. Section 1700.3 of the Labor Code is amended to read: 1700.3. As used in this chapter: (a) “License” means a license issued by the Labor Commissioner to carry on the business of an artists? manager a talent agency under this chapter. (b).“Licensee” means an artists? menager a talent agency which holds a valid, unrevoked, and unforfeited license under this chapter. SEC. 6. Section 1700.4 of the Labor Code is amended * to read: 1700.4. (a) Aw artists? manager A talent agency is hereby defined to be a person or corporation who engages in the occupation of advising, counseling, or @ eontreet with such artist by whieh sueh person contracts to render services of the nature ebove mentioned te such artist: procuring, offering, promising, or attempting to ‘procure employment or engagements for an artist or artists: Talent agencies may, in addition, counsel or diréct artists in the development of their professional careers. 39}: actresses rendering services on the legitimate stage ard AO «in the production of motion pictures; radio artists; musical Bae oo The:word “artists” as used herein refers to actors and -AB 2535, —4— artists; musical organizations; directors of _— stage, motion picture and radio productions; musical directors; writers; cinematographers; | composers; lyricists; arrangers; and other artists and persons rendering professional services in motion picture, theatrical, radio, television and other entertainment enterprises. (b) Personal manager means a person who engages in the occupation of advising, counseling, or directing artists in the development or advancement of their professional careers. A person who procures, offers, promises, or attempts to procure employment or engagements for an artist in any way whatsoever is not a personal manager. SEC. 7. ‘Section 1700.5 of the Labor Code is amended to read; 1700.5. (a) No person shall engage in or carry on the occupation of en artists: manager a talent agency without first procuring a license therefor from the Labor Commissioner. Such license shall be posted in a conspicuous place in the office of the licensee. Licenses issued for artists? managers talent agencies prior to the effective date of this chapter shall not be invalidated thereby, but renewals of such licenses shall be obtained in the manner prescribed by this chapter. (b) The Labor Commissioner shall issue a separate personal manager’s license to all personal managers and shall adopt such rules and regulations as are necessary to administer and regulate such license. SEC. 8. Section 1700.6 of the Labor Code is amended to read: 1700.6. A written application for a license shall be made to the Labor Commissioner in the form prescribed by him and shall state: (a) The name and address of the applicant. (b) The street and number of the building or place where the business of the ertists: manager talent agency is to be conducted. : (c) The business or occupation engaged in by the applicant for at least two years immediately preceding the date of application.DWM NN VEER EE eee SSSSRSSSLESBRNBRRSBRSSENERESHESomIr UKE 40 5 AB 2535 (d) The names and addresses of all persons, except bona fide employees on stated salaries, financially interested, either as partners, associates or profit sharers, in the operation of the artists: manager talent agency in question, together with the amount of their respective interests. The application must be accompanied by affidavits of at least two reputable residents of the city or county in which the business of the artists: manager talent agency is to be conducted that the applicant is a person of good moral character. SEC. 9. Section 1700.7 of the Labor Code is amended to read: 1700.7. Upon receipt of an application for a license the Labor Commissioner may cause an investigation to be made as to the character and responsibility of the applicant and of the premises designated in such application as the place in which it is proposed to conduct the business of the artists: manager: talent agency. SEC. 10. Section 1700.9 of the Labor Code is amended to read: > 1700.9. No license shall be granted to conduct the business of en artists: manager: 2 talent agency: (a) In rooms used for living purposes. (b) Where boarders or lodgers are kept. (c) Where meals are served. (d) Where persons sleep. (e) In connection with a building or premises where intoxicating liquors are sold or consumed. (f) In connection with pool halls or soft drink parlors. (g) To a person whose license has been revoked within three years from the date of application. SEC. 11. Section 1700.11 of the Labor Code is amended to read: 1700.11. All applications for renewal shall state the names and addresses of all persons, except bona fide employees on stated salaries, financially interested either as partners, associates or profit sharers, in the operation of the business of the artists? manager talent agency. SEC. 12. Section 1700.12 of the Labor Code isAB 2535 —6— amended to read: 1700.12. A filing fee of twenty-five dollars ($25) shall be paid to the Labor Commissioner at the time the application for issuance of an artists’ manager a talent agency license is filed. In addition to the filing fee required for application for issuance of en artists: manager a talent agency license, every artists? manager fa/ent agency shall pay to the Labor Commissioner annually at the time a license is issued or renewed: (a) A license fee of one hundred dollars ($100). (b) Fifty dollars . ($50) for each branch office maintained by the ertists: menager talent agency in this state. SEC. 13. Section 1700.13 of the Labor Code is amended to read: 1700.13. . A filing fee of twenty-five dollars ($25) shall be paid to the Labor Commissioner at the time application for consent to the transfer or assignment of ex artists: manager a talent agency license is made but no license fee shall be required upon the assignment or transfer of a license. The location of en artists: manager a talent agency shall not be changed without the written consent of the Labor Commissioner. SEC. ;14. Section 1700.15 of the Labor Code is amended to read: 1700.15. Am artists: manager A talent agency shall also deposit with the Labor Commissioner, prior to the issuancé or renewal of a license, a surety bond in the penal sum of one thousand dollars ($1,000). SEC. 15. Section 1700.16 of the Labor. Code is amended to read: > 1700.16. Such surety bonds shall be payable to. the people of the State of California, and shall be conditioned that the person applying for the license will:comply with this chapter and will pay all sums due any individual or group of individuals when such person’ or his representative or agent has received such sums, and will pay all damages occasioned. to any person by reason oflo AB 2535 misstatement, misrepresentation, fraud, deceit, or any unlawful acts or omissions of the licensed ertists? manager; lalent agency, or its agents or employees, while acting within the scope of their employment. SEC. 16. Section 1700.17 of the Labor Code is amended to read: 1700.17. If any licensee fails to file a new bond with the Labor Commissioner within 30 days after notice of cancellation by the surety of the bond required under Section 1700.15, the license issued to the principal under the bond is suspended until such time as a new surety bond is filed. A person whose license is suspended pursuant to this section shall not carry on the business of an artists: manager a falent agency during the period of such suspension. SEC. 17. Section 1700.19 of the Labor Code is amended to read: 1700.19. Each license shall contain: (a) The name of the licensee. (b) A designation of the city, street and number of the house in which the licensee is authorized to’ carry on the business of a artists? manager. a talent agency. (c) The number and date of issuance of the license. SEC. 18. Section 1700.20a of the Labor Code is amended to read: 1700.20a. The Labor Commissioner may issue to a person eligible therefor a certificate of convenience to conduct the business of an artists? manager a talent agency where the person licensed to conduct such artists” maneger talent agency business has died, or has been declared incompetent by the judgment of a court of competent jurisdiction, or has had a conservator appointed for his estate by a court of competent jurisdiction. Such a certificate of convenience may be denominated an estate certificate of convenience. SEC. 19. Section 1700.20b of the Labor Code is amended to read: 1700.20b..To be eligible for a certificate of convenience, a person shall be: be either: (a) The executor or administrator of the estate of aAB 2535 —8— CHURMROOH deceased person licensed to conduct the business of ex jatar #3 or a talent agency. (b) Ifno executor or administrator has been appointed, the widow or heir otherwise entitled to conduct the business of such deceased Heensee; or licensee. (c) The guardian of the estate of an incompetent person licensed as en artists: manager; a talent agency, or the conservator appointed for the conservation of the estate of a person licensed to conduct the business of an artists: manager: a talent agency. Such estate certificate of convenience shall continue in force for a period of not to exceed 90 days, and shall be renewable for such period as the Labor Commissioner may deem appropriate, pending the disposal of the artists: manager talent agency license or the procurement of a new license under the provisions of this chapter. SEC. 20. Section 1700.23 of the Labor Code is amended to read: 1700.23. Every artists? manager talent agency shall submit to the Labor Commissioner a form or forms of contract to be utilized by such ertists: manager talent agency in entering into written contracts with artists for the employment of the services of such artists” manager talent agency by such artists, and secure the approval of the Labor Commissioner thereof. Such approval shall not be withheld as to any proposed form of contract unless such proposed form of contract is unfair, unjust and oppressive to the artist. Each such form of contract, except under the conditions specified in Section 70045 of this eede; 1700.45, shall contain an’ agreement by the artists: manager talent agency to refer any controversy between the artist and the artists: manager talent agency relating to the terms of the contract to the Labor Commissioner for adjustment. There shall be printed on the face of the contract in prominent type the following: “This artists: manager talent agency is licensed by the Labor Commissioner of the State of California.” SEC. 21. Section 1700.24. of the Labor Code is amended to read: . 99 140—9— AB 2535 1700.24. ‘Every person engaged in the occupation of an artists: manager a talent agency shall file with the Labor Commissioner .a schedule of fees to be charged and collected in the conduct of such occupation, and shall also keep a copy of said such schedule posted in a conspicuous place in the office of such artists: manager: talent agency. Changes in the schedule may be made from time to time, but no change shall become effective until seven days after the date of filing thereof with the Labor Commissioner and until posted for not less than seven days in a conspicuous place in the office of such ertists* manager: talent agency. SEC. 22. Section 1700.25 of the Labor Code is amended to read: 1700.25. Before making any theatrical engagement, 5 other than an emergency engagement, every person doing business as en artists’ manager; a talent agency, shall prepare, sign, and keep in his files a verified statement setting forth how long the applicant employer has been engaged in the theatrical business. Such statement shall set forth whether or not the applicant employer has failed to pay salaries or left stranded any companies, in which the applicant employer and, if a corporation, any of its officers or directors, have been financially interested during the five years preceding the date of application and, further, shall set forth the names of at least two persons as references. If the applicant is a corporation, the statement shall set forth the names of the officers and directors thereof and the length of time the corporation or any of its officers have been engaged in the theatrical business and the amount of its paid-up capital stock. If any allegation in the statement is made upon information and belief, the person verifying the statement shall set forth the sources of his information and the grounds of his belief. The statement shall be kept 5 for the benefit of any person whose services are sought by any such applicant employer. SEC. 23. Section 1700.26 of the Labor Code is amended to read: 1700.26. Every artists: manager talent agency. shall> BS ee et ee RRSERNREEGHE Soni aaa oDe Bowe eeeyeNyEepnyy SSSLSRLSBESBBAGARS 2535 —10— keep records approved by the Labor Commissioner, in which shall be entered: (1) the name and address of each artist employing such artists: managers talent agency: (2) the amount of fee received from such artist; (3) the employment in which such artist is engaged at the time of employing such artists: manager; talent agency, and the amount of compensation of the artist in such employment, if any, and the employments subsequently secured by such artist during the term of the contract between the artist and the artists? manager; talent agency, and the amount of compensation received by the artists pursuant thereto; and (4) other information which the Labor Commissioner requires. No artists? manager; his talent agency, its agent or employees, shall make any false entry in any such records. : SEC. 24, Section 170027 of the Labor Code is amended to read: 1700.27. All books, records, and other papers kept pursuant to this chapter by any artists: meaneger talent agency shall be open at all reasonable hours to the inspection of the Labor Commissioner and his agents. Every artists: manager talent agency shall furnish to the Labor Commissioner upon request a true copy of such books, records, and papers or any portion thereof, and shall make such reports’as the Labor Commissioner prescribes. SEC. 25. ‘Section 1700.28 of the Labor Code is amended to read: \ 1700.28. Every artists? manager talent agency shall post in a conspicuous place in the office of such artists? manager talent agency a printed copy of this chapter and of such other statutes as may be specified by the Labor Commissioner. Such copies shall also contain the name and address of the officer charged with the enforcement of this chapter. The Labor Commissioner shall furnish to artists: meneagers talent agencies printed copies of any statute required to be posted under the provisions of this section. SC. 26, Section 1700.30 of the Labor Code is” 99 170-—l— AB 2535 amended to read: 1700.30. No licensee shall sell, transfer or give away any interest in or the right to participate in the profits of the artists? manager talent agency without the written consent of the Labor Commissioner. A violation of this section shall constitute a misdemeanor, and shall be punishable by a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500), or imprisonment for not more than 60 days, or both. SEC. ..27.- Section 1700.31 of the Labor Code is amended to read: 1700.31. No artists: menager talent agency shall knowingly issue a contract for employment contaifning any term or condition which, if complied with, would be in violation of law, or attempt to fill an order for help to be employed in violation of law. SEC. 28. Section 1700.32 of the Labor Code is amended to read: 1700.32, No ertists: manager talent agency shall publish or cause to be published any false, fraudulent, or misleading information, representation, notice, or advertisement. All advertisements of an artists: manager a talent agency by means of cards, circulars, or signs, and. in newspapers and other publications, and all letterheads, receipts, and. blanks shall be printed ‘and contain the licensed name and address of the ertists? manager talent agency and the words “artists? manager “talent agency.” No ertists: manager talent agency shall give any false information or make any false promises or. representations. concerning an engagement or employment: to any applicant who applies for an engagement or employment. SEC. ,29...Section 1700.33 of the Labor Code is amended to read: , 1700.33. ..No, artists: manager talent agency, shall send. or. cause to be sent, any woman or. minor.as an employee to any house: of. ill fame,. to any house or .place of amusement for immoral purpose, to places resorted to for. the purposes of prostitution, or to gambling houses, the character; of which placesthe artists? maneger talentAB 2535 SEC. 30. 1700.34. any minor liquors are SEC. 31. 1700.35. knowingly talent agen SEC. 32. 1700.36. accept any 1700.37. meee RPRBRRSEASAREHEESomiSaaoDr 25 during the 26 such contract or at any time thereafter, with a duly / 27 licensed artists: manager talent agency as defined in 28 Section 1700.4 to ‘secure him engagements to render ‘| 29 artistic or creative services in motion pictures, television, | 30 the production of phonograph 'records, the legitimate or | .31 living stage, or otherwise in the entertainment field agency could have ascertained upon reasonable inquiry. amended to read: 5 amended to read: amended to read: behalf of any child, or shall place or assist in placing any | such child in any employment whatever in violation of Part 4 (cominencing with Section 1171) of this division. (J SEC. 33. amended to read: otherwise valid, entered into during minority, either —i2— Section 1700.34 of the Labor Code is | No ertists: maneger talent agency shall send to any saloon or place where: intoxicating — sold to be consumed on the premises. Section 1700.35 of the Labor Code is No artists? manager talent agency shall - | permit any persons of bad character, prostitutes, gamblers, intoxicated persons, or procurers to 4 frequent the place of business of the artists: manager | cy. Section 1700.36 of the Labor Code is No artists? manager talent agency shall application for employment made by or on Section 1700.37 of the Labor Code is | A minor cannot disaffirm a contract, 4 actual minority of the minor entering into 4 32. including, but without being limited to, services as an \ 33 actor, actress, dancer, musician, comedian, singer, or 34 other performer or entertainer, or as a writer, director, ’ 35 producer, 36 composer, production executive, - choreographer, conductor or designer; the blank form of 37 which has been approved by the Labor Commissioner 38 pursuant to Section 1700.23, where such contract has 39 been approved by the superior court of the county where ‘ 40 such minor resides or is employed.—B— AB 2535 Such approval may be given by the superior court on the petition of either party to the contract after such reasonable notice to the other party thereto as may be fixed by said court, with opportunity to such other party to appear and be heard. SEC. 34. Section 1700.38 of the Labor Code is amended to read: 1700.38. No artists: manager talent agency shall knowingly secure employment for an artist in any place where a strike, lockout, or other labor trouble exists, without notifying the artist of such conditions. SEC. 35. Section 1700.39 of the Labor Code is amended to read: 1700.39. No artists: manager talent agency shall divide fees with an employer, an agent or other employee of an employer. SEC. 36. Section 1700.40 of the Labor Code is amended to read: 1700.40. In the event that an ertists: manager a talent agency shall collect from an artist a fee or expenses for obtaining employment for the artist, and the artist shall fail to procure such employment, or the artist shall fail to be paid for such employment, such artists talent agency shall, upon demand therefor, repay to the artist the fee and expenses so collected. Unless repayment thereof is made within fertyleight {48} 48 hours after demand therefor, the artists: manager talent agency shall pay to the artist.an additional sum equal to the amount of the fee. SEC. 37. Section 1700.41 of the Labor Code is amended to read: 1700.41. In cases where an artist is sent by am artists” maaneger a talent agency beyond the limits of the city in which the office of such srtists* manager talent agency is located upon the representation of such artists: e artist has been otherwise so reimbursed: SEG. 38 Seetion 1700-43 of the Labor Geode is amended te read: : 470043. When a ieensee has departed from the State state with intent to defraud creditors or to avoid service ea 910> oe ie ee BENRRRRERNRSESRRRESHESOmIAaRoDH 2535 = of.summons in an action brought under this chapter, service shall be made upon the surety as prescribed in the Code of Civil Procedure. A copy of the summons shall be mailed to the licensee at the last known post office address of his residence and also at the place where the business of the ertists: manager talent agency was conducted as shown by the records of the Labor Commissioner. Service is complete as to such licensee, after mailing, at the expiration of the time prescribed by the Code of Civil Procedure for service of summons in the particular court in which suit is brought. SEC. 39. Section 1700.45 of the Labor Code is amended to read: 1700.45. Notwithstanding Section 470044 of the Leber Gede; 1700.44, a provision in a contract providing for the decision by arbitration of any controversy under the contract or as to its existence, validity, construction, performance, nonperformance, breach, operation, continuance, or termination, shall be valid: (a) If the provision is contained in a contract between em artists’ manager a talent agency and a person for whom such artists: manager falent agency under the contract undertakes to endeavor to secure employment, (b) If the provision is inserted in the contract pursuant to any rule, regulation, or contract of a bona fide labor union regulating the relations of its members to an artists” - a talent agency, oe (c) If the contract provides for reasonable notice to the Labor Commissioner of the time and place of all arbitration hearings, and (d) If the contract provides that the Labor Commissioner or his authorized representative has the right to attend all arbitration hearings. Except as otherwise provided in this section, any such arbitration shall be governed by the provisions of Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure. If there is such an arbitration provision in such a contract, the contract need not provide that the artists? waanager talent agency agrees to refer any controversy—b— AB 2535 between the applicant and the artists: manager talent agency regarding the terms of the contract to the Labor Commissioner for adjustment, and Section 1700.44 shall not apply to controversies pertaining to the contract. A provision in a contract providing for the decision by arbitration of any controversy arising under this chapter which does not meet the requirements of this section is not made valid by Section 1281 of the Code of Civil Procedure. SEC. 40. Section 1700.47 is added to the Labor Code, to read: 1700.47. Any persons who held: an unrevoked or unsuspended license as a musician booking agency ninety days prior to the effective date of the repeal of the musician booking agency license law may apply for and be issued a talent agency license for the remaining term of such license without examination or fee. Any musician booking agency application pending ninety days prior to the effective date of such repeal shall be reprocessed as a talent agency application upon written request of the applicant. Any fee on file will be applied to the talent agency application; the application shall meet all other requirements, including investigation, for a talent agency license before a talent agency license may be issued. SEC. 41. It is the intent of the Legislature that those individuals and organizations previously licensed as musician booking agencies shall henceforth be licensed as talent agencies.i Dawid Chavlos., nut sermon 626-1335 : G26 . 429? (meas An artists’ manager is defined in § 12000 oF ‘the California Administrative Code as follows: "(b) A person who, for a consideration, advises, counsels or directs artists in the development ‘ or advancement of their professional careers and who, in fact, either procures, offers, prow Or attempts to procure employment, . ments for an artist shall bé deemed to Us an a engage-Under this definition, the artists’ manager has (Tia tat to artist, that of advising and directing the artistsin the advancement of their careers, and that of procuring or attempting to procure employment for the artists: [f.a person is engaged for a fee solely for the purposes of advising, counseling and directing artists in the advancement of their professional careers, such person does not come within the definition of ‘artists’ : manager", although he or she may be classified as a personal manager. Likewise, if a person is engaged solely to procure or attempt to procure employment, such person does not cone within the definition of “artists' Manager", although he or she may be class- — ified as £1 ee) ee Lt 48 important to note that under tne above definit.on @ person may be found to be acting as an artasts’ manager notwithstanding a contractual provision to the contrary. ‘This is significant because under @ Licensing requirementsof the Labor Code, the Labor Commissioner is given original jurisdiction to determine disputes between 3 artists and artists! managers. The Perso: "Many artists don't have the ability of the inclination to do business, If an artist is bright enough to avsorb the business and not take away from his creative energies; fine. iie's fortunate. . . dut if an artist can't absorb the knowledge, the real challenge i's to find someone he can trust who ean do it all, so that the artist can eat, sleep, RTE and do nothing but his creative work + + « The primary function of the performing artist is to entertain." (Bill Graham, Music Works magazine, Nov. 1977) | “Tey are neither fish nor fowl and up to now nobody hi ver been able to get to thea," (Spokesperson for A.f. of M. at Zenovich Hearings of 1975) The personal nager is one who, for a fei advi. counsels and directs artists in the advancement and dev-elopment of their professional careers.’ Such activities may include acting as liaisorf between the artists and ‘the business world upon which the artist 1s @ependont for his or her success, such as negotiating recording deals, advising as to vhich employment offers to accept, and dealing with booking agencies and artiste! managers. The personal manager is involved in concert promotion, coordinating tours and hiring road personnel, and rep- resenting the artist and handling his or her financial affairs. ‘The personal manager assumes a fiduciary obligation to the artists, and trusteo and agency principle: apply. The personal manager in Califomis is not required ‘ to be licensed, and is free to enter into any contract= ual arrangement with the artist not inconsistent with the law,LEGLSLATIVE HISTORY Under early California statutes, all persons engaged in « Ahan fora fee ¢ occupation of procurement of eapl: vere regatst~ ——_—=C=rs ulating employnent agents existed as early as 1903, there were no Licensing requiresents enacted until 1913. Section 2 of the Employment Agents Act of 1913 stated: “A person shall not open, keep, maintain or carry on any enploynent agency, . . . unless he shall have first procured a lic- onse therefor as provided in this article from the coms- sioner of labor." The term “employment agency" was defined in $1 to include “theatrical employment agency" and other businesses conducted "for the purpose of procuring or attempt- Ang to procure help or employment or engagements for persons seeking employnent or engagement, or for giving information to where and from whom such help, employment or engage. ment _may be procured, where a f or other valuable consid- eration 1s exacted . . ." (Emphasis added), To obtain aaggheeuts weve raqusvad 4 Stoboit conse written application accompanied by affidavits of atleast two reputable local residents stating the applicant's good moral character. (§3) 4 fee of up to fifty dollars and bond of up to two thousand dollars was also required, and every licensee was required to keep certain records of their activities, subject to inspect- ion by the Commissioner. Theatrical agents were required to keep records concerning transactions with employers, as wll applicants, and the form contract.to be used by the agent for employer-applicant agreements first had ‘to be approved by the Commissioner. ‘The Comnissioner was Person acting in violation of the statutes. In 1923, § 19 of the Act was amended to read:"In all cases of controversy arising under this act the parti Anvolved shall refer the ter in dispute to the comm s- stoner of labor, who shall hear and determine the sane[abe (datiertul 1937 subject to an appesl within ten days to the Superior Court where the same shall be heard de move." This gave the comissioner original juriodiction over al) such controversies, and the determination by the con- missioner was a prerequisite to any action in a court of law. Under the Employment Agencies ‘Act of 1937, Section 19 was expanded to allow the Gomissioner "to promigate rules and regulations . . . for the purpose of enforeing and aduinistering . . ." the provisions of the Act ($1646), and a bond requirement to stay and award for money was added to allow for an appeal for trial de novo ($1647). In 19394 §1647.5 was added to the act, which allowed for enforcenent of a provision in @ contract providing for arbitration of controversi In 1943 provisions were added to the imployment Agencies Act which defined and regulated the activities of artists’ managers. ‘The artists! manager was defined as one who! “engages in the occupation of advising,counseling, or directing artists in the development or advancement of their pro- fessional careers and uho procires, offers, Promises or attempts to procure employzent or engagements for an artist only in con- nection with and as a part of the duties and obligations of such person under a contract with such artist by which such Person contracts to render services of the nature above mentioned to such artist." Under this definition, the artists' manager was required to assume (Qe toa ation of sheng the artist in ‘the advancement of his or her professional career and the procurenent of employment for the artist, Recog- niging for the first time that the functions of the artists’ manager varied significantly from that = other employnent agents, and that the relationship between artist and manager was long term due to the nature of the employment, the new statute also provided that the form contract to be used between artist and manager first be subhitted for approval, and that a schedule of fees to be chargedIn 1959, 0 naw chapter was added to the Labor Code entitled “Artists' Manager Act". Under the new section, + the provisions governing employment agencies in general which had previously been applicable to artists' managers and the statutes added to the Labor Code in 1943 regulating artiste! managers were combined, The new Act did not add anything of significance that was not covered by earlier statutes, but rather nade the earlier provisions specifically applicable to artists and artists! managers. The Labor licensing Commissioner's authority and requirenente vere later developed in more detail by the statutes added to the California Administrative Code in 1970 In 1967, the Labor Code sections regulating employment agencies were repealed , and replaced by Business and Pro- fessions Code Sections 9900 to 9995. Under the new provisions, Jurisdiction over persons engaged as employment agencies vested with the Bureau of Employment Agencies. This is significant in that persons acting as booking agents Ncwere regulated by the Burem, even though performing cne of the sane functions as the articts'manager, that of pro- caring employment, In addition, under the definition of “employment agency", the personal manager could also be subject to the Burem's licensing requirement if the statute wore strictly construed, even though engaged in the other function of the artists' manager, that of advising, counseling and directing the artists in his or her career. The result was an unnecessary bifurcation of jurisdiction over persons The provisions found in the Artists’, Manager Act are essentially the same as those governing employment agencies Aa 1937, and to a certain extent those in effect in 1913. There have been no significant changes in the provisions contained in the Act since 1943, when the artiste’ manager first designed and separately regulated by the Labor Comm ssioner.The Artists’ Manager Act is a remedial statute. The pro- visions of tha Act were originally intended to protect the artist from exploitation by their agents, and to give art! stc ‘@ remedy for such exploitation. The requirement of a written contract between artist and manager, containing a statement of the managers duties of advising, couneeling and directing the artist and of procuring or using all reasonable efforts ‘te procure, has been for the benefit of the artist rather ‘than the manager. The bonding requirenents, affidavits showing good moral character, investigations accompanying application for license, and provisions for handling disputes have all been for the protection of the artist. Today, most of these same protections are afforded the artist through between ‘the franchising agreements with the various guilds and unions representing the artists and the artists’ manager. For ex- ample, the By-Laws of the A.F. of M. prohibit the artist from retaining an artists' manager or booking agent unless such agent has entered into an agreement with the A.F. of H.in which the agent agrees to be bound by the provisions in the A.P. of M.'s By-Laws regulating agents. These Provisions limit the commission percentage which the agent may charge the misician,limit the duration of contracts entered into between agent and musician, and provide for termination of the contract if the agent does not . Procire employment within a given period of tine, there the union agresnent provides for arbitration in the event of dispute, the provision prevails over the jurisdiction of the Labor Commissioner. ‘The Artists! Manager Act allows the Labor Commissioner Jurisdiction over persons acting unlawfully as unlicensed artist managers, and a growing number of at oputes between artiste and thetr personal managers have come before the Commissioner in the last ten years. since there are at present no licensing requirements for the personal manager, Af At can be convincingly shown that the personal manager Procured or promised to procure enploynent for the artist, the commissioner has the power to void the contract.When the statutes regulating artists! managers were first enacted in 1937 and 1943, the personal manager was nit an important consideration. Even in 1959 when the Artists' Manager Act was enacted, it was unforeseeable that the entertainnent industry, and especially the mic industry, would grow to the proportions it now assumes, At that time At was reasonable to expect the artists' manager to assune ‘the responsibility of guiding the artist in the advancement. of his or her career as well as procure employment, for the two functions went hand in glove. Today, however, either one of the two functions of guidance and seeking employment is a full time endeavor. With concert promotions now on ‘the national and international scale, and the energence of the large agenci: such as Willian Morris agency, procuring employment for the misical artist hi become a big, complex business, Still, the artists’ manager has a contractual duty to advise and counsel his client in furtherence of his or her professional career, on top of ‘the duty to procure ecploynent, Even if the artists! manager is willing‘to allow the personal manager to assune tne role of advising ané counseling the artist(the-avtiste' manager — (Ge ‘red both by the statute and by the contract to_ fulfill this function. ‘The well established artists' manager agencies will not enter into a contract with a msical artist unless that artist has first obtained a recording contract. Yet the eee Act prohibits anyone else from procuring a recording con~ aan. tract without firet being Leenghd, Sines the personal eee manager is often in the best position to obtcin sucn a contract, he or she should be allowed to do so, as part of his role in the advancenent of the artist's career. The artists! manager is primarily interested in the finished product, a!groomed, fully developed and established artist who can be successfully promoted. It is the personal manager's task to develope the artist to the point that he has something to offer, and this usually include a record- Ang contract.‘Existing Legislation shonid be amended to bring all Persons engaged in the activities of @ither adeiine, ‘erisdiction as it now stands, the funetions and duties of artists’ managers, personal managers, and booking agents need to be defined with ‘specificity, and the provisions cssary part of the artist's career, and should be Licensed an artist 15 not faced wth the Hobson's cholee of violatingmanager could also be Fequirenent if the statute we The Strat attemt to "eulate Personal wanagers came in 1 1973, under Senate PLLL 838, Personal manager under the Surtedietion of the Division °F Consuaer Services, The tome “personal manager" wag defined as follows:of teatning, edueation, and Srooming, and } Tendering such other asai stance ag may ba appropriate," artiots! manager; ¢ (2) Te promotion of an artist's Sareer through sdverti ning and purnsetty, (@) ™e procuring, ottering, Promising or atteapt.cnploynent or engagenents, or oe for such services,# BL ree i 1 mA!hinder the Jurtsdtetion o¢ the However, the 2111 was amended toSwmerc,or employees shall be an officer, director, stockholder, partner, exployes of, or have omnes ship in or control of, any other Person, firm, 9999.32. Wo misical booking agency shall engage Although the artiste! manager was specifically exempted from ‘the Act, both Personal managers and booking agents were awversely affected by the provisions, and there was consid. erable uncertainty {0 who else might come within the overbroad definition of “xusical booking agency". While the definitions of both "misical booking agency* and “musical |artist" have been criticized as overbroad, the main objection to the Act is aimed at the provisions intend~ ed to prevent conflicts of interest. In the misio indast:” At Ls commonplace for persons engaged in the occupation of Personal manager to also be engaged in other activities “Within the industry which would bring then wthin the Prohibitions of $§ 9999.91 and 9999.32, such as music ——— publishing, record production and even artists! management, 7 eee Under the Act, such persons could no longer perform in a dus capacity and would be forced to chocse whether, for scamle, to represent the artist as a mesic publisher OF personal manager, thus depriving the artist of the full benefit of the manager's knowedge, dud aby(itiey. The Whetaore Act has further been ort ticted as unnece essary, the opponents arguing that between existing leg- Lalation and the regulations imposed ty the AF. of He, all areas covered by the Act are already regula| As 4 result of the problems created by the Act, an injunctionagainst its enforcement was ised the day before the Act was to take effect (Steve Gold v. Bureau of Baployment Agencies)CONTROVERSIES ANISING UNDER THE LEGISLATIVE ACTS ‘he first judicial interpretation of the statutes regulating artists’ manager activities was in Collier & Wallis, Ltd. v. Astor, (1937) 9 C. 2d 202. in that ca: plaintiff, a Licensed employnent agent had obtained a Jndgenent against defendant, a notion picture artist, in an.action to recover upon a contract whereby plaintiff was authorized to, and did, obtain engagements for defendant. Defendant appealed the judgement, contending that the action was prematurely brought in that plaintiff below failed to comply with ¥ 19 of the Labor Code, which provided for a hearing and determination by the labor Commissioner of all artist-agent controversies. In revérsing the judgement, the court stated: “The provision of $19 of the Private Employment Agency Law providing for a reference to the Labor commissioner of controversies arising under said act for hearing and determination by such official being a valid legislative enactment, any action . brought in the superior court without first makingsaid reference and securing said determination 4s prenaturely brought and cannot be maintained." fet pe 206) | In 90 holding the court confirned the Labor Commissioner's | jurisdiction over all controversies and disputes arising betwoon artists and their licensed managers, The court went on to discuss the appeal from the Com sstoner's determination: “Er ]t wai be noted that the provision in question provides for a hearing de novo in the superior court after the matter has been 'appealed' to that court. i Ahearing ge novo literally means a new hearing, or i @ hearing the second time. (18 Cor, Jur. 486) Such a hearing contemplates an entire trial of the con- troversial matter in the same manner in which the sane was originally heard. . . The court hears the matter, not ‘an appellate court, but as a court of original jurisdiction, ‘wth full power to hear and determine it as if it had never been before ‘the labor commissioner." (at p. 205) ‘The first judicial interpretation of the Labor Code definition of “artiste! manager" was in Haden vs Laurie, (1953) 120 C.A.24 778, Plaintiff had a written contract Amu with defendant \ known professionally as Piper Laurie, andher mother, also a named defendant. ‘The contract provided that plaintiff was to receive a feo of 10% of all the pro~ fessivnal earnings of Piper Laurie, as compensation for services as “advisor and counsel and business manager* for Piper Laurie. The contract further stated: "It 1s expressly agreed that you shall not be | required to devote your entire tine and attent- ion to the rendition of your services hereunder, and that nothing herein contained shall be deamed to require you or authorize you to seek or obtain employment for the undersigned." Plaintiff tued to recover fees due under the contract, and the lower court granted defendant's motion for summary Judgement upon the ground that plaintiff was either an un- Aicensed artists! manager or employment agent, and the con- tract was thus unenforceable ty plaintiff. Although plaintiff had admitted taking Piper Laurie to places where si might find employment, he contended that it was done “for the general development and education" of defendant. ‘The Labor Commissioner filed an amicus brief, contendingthat the contract was “a sham and subterfuge designed ‘to conceal the fact that plaintiff was acting as an artists! Dh versing Sy manager." ATie court stated:"In the absense of any evidence ‘that the July 30th agreement vas a more subterfuge or other wise invalid the court was roquired to give effect to its clear and positive provisions. . . since plaintiff was employed only to counsel and advise Rosetta and to act as her business manager in ustters not relating to obtaining . eaploynent for her, he was not acting as an"Employnent Agency* as defined by Section 1551, Labor Code." alo Te Raden dectsion(aade it clear that one was not subject to the Artiots! Manager Act unless engaged in both the advising and directing of artiste in thelr careers and progirenent or atteapted or promising of procurenent of employnent, Unless the artist could offer clear and convincing proof ‘that the manager had procured, attempted to procure, or Prom.sed to procure employment for tne artist, the Labor Commissioner had no jurisdiction over the dispute.Raden v. Laurie was the first judicial determination ‘that one could act as a personal manager and engage An advising and counseling the artists in the furtherence of their careers without being licen and established @ precedent that was later to be relied on smmmeicuntions as a defense to actions to void a contract for failure to have a license. It is interesting to note that the court @id not choose to desl with the wording of the statute defining employment agencies; “. . . or for giving informat~ ion as to where and from whom such help, employment or en= gagenent may be procured” since plaintiff had admitted tak- Ang defendant to places of employment for educational pur- Aaboe ve - poses. Had the statute been construed, as required of regulatory statutes, the decision might well have gone ‘the other way.‘The most important case arising under the statutes was Bubtiiald-v, Kats, hereafter referred to as The Jefferson Airpliané Case. In September of 1966, a dispute arose between the named plaintiff, leader of the rock group a etablished The Jefferson Mrplane, and defendant, ‘am aks@hewr personal, ‘anager ‘by:name of Matthew Katz. Plaintiff and other meabers ‘of the-band had signed a contract with Katz in 1965 whereby defendant yas to act as personal manager for the band. The contract read in parts ®E engage you and you agree to act for a period of (5) five years from. date as ay exclusive personal representative, advisor and manager in the enter- teinment field, primarily to advise me with respect te contracts and offers of employment and other Imsioess and professional aspects of oy oareers « «hei peor edusal that yr ave wi ¢ lic. Sh 3 You are authorized and empowered for me and in my behalf and in your discretion to do the follow ing: - + -exeoute for me and in sy nase and/or in my behalf any and all agreements, docunents and contracts for ny services, talents and/or artistic literary and msical materials; collectand receive sums as well as endorse ny name upon and cash any and all checks payable to me Sor ay services, talents and literary and artistic materiale and retain therefrom all suns oving to yous engage as well as discharge and/or direct for me, and in ny name, theatrical agents and employment agencies well as other persons, firms and corporations who may be retained to obtain contracts, engagenents or employment for me... "It 4s clearly understood that you are not an employment agent @r theatrical agent, that you have not offered or attempted or promised to obtain emp- loyment or engagements for ne, and you are not oblig- ated, authorized, or expected to do so." ‘At the tine of execution of the contract, plaintiff’ s were virtually unknown as misicians, living hand to mouth an often perforuing as strest mslclans 10 onder to survive. Kate bought equipment for the band and fed and clothed than, taking then into his own hone, Kate was able to procure a recording contract for the group with RCA recorda, and shortly the: fter plaintiff's gave written notice of their intent to rescind the contract, alleging mistake, undueinfluence and duvess as a basis for rescission. Katz immediately began arbitration proceedings against the gro 89 provided for in the contract, and The Airplane thereafter filed with the Labor Com sstoner, ‘contending that Kats had Aoted unlawfully as an unlicensed artiste! manager by procuring ‘and promising to procure employment for the group. Kats object- oa to the Labor Comuissioner's juriedietion elting Baden.ve lumurke, supra. The Airplane then filed in San Franc 200 Superior Court for an order to restrain arbitration, and Kats moved for the court to order The Airplane to arbitrate ‘as provided by the contract, and to hava the Labor Coin. eston- er's proceeding restrained, The trial court, relying upon Baden, gupra.granted Katz' motions and plaintiffs appesied. ‘The Court of Appeals annulled the lower court's order, and ordered that the case be heard before the Labor Commi sel on- er. The court based its decision on the fact that plaintiffs had prosonted « prima facie shoving to the Labor Count sstoner that Kate had agreed to and did act a9 an artiste! manager, sufficient to give tne Labor Conti ssioner jurisdiction todetermine in the first instance whether the controversy was within the grant of jurisdiction of the Artists! Manager Act. The court distinguished Raden, supra, in that no such showing that defendant had acted as an artists' manager had been established. The court stated: "Remedial statutes should be liberally construed to effect their objects and suppress the nichief at which they ate directed. (Citations omitted) It would be unreasonable to construe the Act as sp- plying only to licensed artists' managers, thus allowing an artists' manager, by nonsubmission to the licensing provisions of the Act, to ex- clude himself from the restrictions and regulations enacted in the public interest. . . We conclude that artists’ managers (as defined by the act), whether they be ligensed or unlicensed, are bound and regulated by the Artists’ Managers (sic) Act." Discussing the arbitration provision in the contract, the court went on to stater "since the clear object of the Act is to pre« Vent improper persons from beconing art! sts’ man= agers and to regulate such activity for the pro-tection of the public, a contract between an unlicensed artists' manager and an artist is void. (see Woods vs Kreps, 168 602.382, 386 (rug P. 691 Lena. 19158) asi). oe If the agreement is void no rights, including the claimed right to private arbitration, can be dorrived from it." The case wae subsequently brought before the Labor ComeLssioner in 1970 (#AMSF 00017), ‘The Labor Commissioner determined that Kats had breached his fiduclary duty owed plaintiffs by mak-ng representations that RCA would not grant a recording contract to the group unless the Group signed Kate as their manager, when in fact Kate tid not know what ROA's policy was; that Kate obtained the Feconding centract for a fee; that Kate did soltelt and obtain engageasnts for the group at The Fillmore in San Franciseo; and that the contract between The Airplane and Katz was mere subterfuge to avoid the licensing re- guirenents of the Act. in reaching these conclusions thd Hearing Comittes placed great emphasis on testimony |of sill Graham, ower and operater of The Fillrore, Granam t.stified that Katz had jnvited him to his hone, where @ contract was negotiated and signed whereby The Airplane was to perform at The Fillmore. Thereafter Katz would make periodic calls to Graham, advising Graham of the free dates The Airplane had open, and asking “What 1s availability!™ of bookings. As firahan ‘testified: “When he needed something fron me, ne would call me, When { needed something from him, i would call nin." (200 L.C, transcripts, lines 16, 17) Based on the foregoing conclusions, the Hearing Conuittes found the contract between The Airplane to be void, and ordered Katz to retum all. comissions, totaling almost $50,000. A publishing agreesent between individual menbers of The Airplane and Katz was also found vold for mistake, undue influence and breach of fiductary duty. Katz appealed the determination to the San Francisco Superior Court for a thial do nove as provided by the Act» Pursuant to a notionby The Airplane, the court t the anount of the required bond to stay execution of the Labor Comissioner's sion- etary avard at the amount of the award, and ordered it filed within fifteen days or the appeal would be dismissed, When Kate failed to file the bond, the appeal was di suissed, ‘The Supreme Court reversed the order of dismissal and remand- od the cause for a trial de novo, holding that the filing of bond under $1700.44 of the Labor Code was not a prereq- uisite to a trial de nove, but merely a deviee to stay an ‘Sward of money damages, However, since Katz did fail to file the requisite bond, The Airplane was free to enforce ‘the money judgenent. Because of the complexities of the issues involved in tne case, the trial de povo was bifurcated, wth only four issues to be determined in the first portion of the proceedings: Did Kats act, or agree to act, as an artists! manager? 8. Were the management contracts wth the individual Group menbers void because of violation of the licensing requirements of the Artisto' Manager Act?C. Were the publishing agreenents between individual members of the group end Kats void or unenforce- able beca of any alleged violation of the Artists! Manager Act or other statutest D. Were the management contracts and publishing con ‘tracts separate and severable agreenentst Throughout the pre-trial proceedings, the most litigated issue was the meaning of the tern “procure” under the Act. While plaintiff argued that the tern enoompaiised: negotiating employment, or engageaent agreements regardless of vho made ‘the initial contact, defendant contended that "procure" ‘neant “to solicit," and did not apply to accepting unsol- iclted offers of employment. Katz adaitted that all job offers to The Airplane were submitted through him in tne form of a written "eamial contract blank” provided by the AF. of He, and that after sucn offers were accepted by the group, all paperwork was rechanneled through Kate. In answer to plaintiff's interrogatories Kate stated: "Ag the group's manager, it was my principle Fesponsibil ty to advise then .n the developmentand enhancement of their professional careers, Ancluding giving them advise on which job offer 2 to acvept, and which to reject for what reasons. + + on the other hand, it was not my Sinction to procure, of attempt to procure employment or ‘engagenents on behalf of the group, nor was it ay function te make the ultimate decision as to whether or not to accept a particular job offer." (Prefatory Statasent to Plaintiff's interrogatories, June 21, 1976) Plaintiff attempted to show that even activities such as ‘these were sufficient to show that Kate was acting ar an artists' manager, relying.heavily on Deane v. Rivpy, (1976) 63 CoAe3d 978, & cane ironically decided under the precedent’ set by Buchwald v. Superior Court, gupra. In Deane, plaintire brought @ declatory action to enforce the provisions of a Personal management contract with Rodney. Rippy, a minor, and hie mother, whereby plaintiff was to receive a percentage of the.minor's earnings during the term of tne contract for her services in advising, counseling und directing defendant: > yr. Defendant filed a cross-complaint for failure to scoount, and alleged that plaintiff was acting unlavfully ——e eeeas an artists' manager. The contract stated in rebevant part: “Your Lappellant's) duties will be to adyis: we uith respects to contracts and offers of employment and other business and professional aspects of said minor's career, It is understood that you are neither to devote your full time to minor nor to function as ‘an euploymént agency. (.talics added)" “Betty Deane:resorves the right to decide on which licensed agent said minor snould sigh with, and 1 ‘agree to consult with her and got her written consent defore signing.” The court held that where the contract gave the manager total control over the artist's employment opportuni ties it was mffictent to make the manager an artists! manager, and avimed the trial oourt!s judgouent for defendant. The court furtner stated tat under the definition of “employnent agency" in Susiness and Professions Code ‘9902, plaintiff might alternatively be required to be licensed as an eaploynent agent. Shortly after the commencenent of The Jefferson Airplane trial, Deane v. iippy was decertified, based on the findingfiduciary responsibility oved Plaintifes, At this writing the second portion of the trial de novo has not commenced. issues remaining to be resolved include whether mistake, fraud, or undue influence were invoived in Raking the contracts void or Voldabler-Atee~to-be-debermined— and ree danages to the parties, and the legal Gispute enters its twelfth year, neither party has any Adea shon the controversy 411 be finally resolved,Relying on the precedent established by The Jefferson ‘Airplane Gass. the Dapartaent of the Labor Commissioner recently found the standard contract used by ths Confese.c of Personal Managers, West, to be void. In durlesque v._ ‘The Management Tree, (LC. #HPt29 AM~211-HC) the Hearing Committee stated in their determination: “Te written contract upon which respondents rely in support of their unlicensed activity is wracked with inconsistency and ie bot a rus when viewed in context of vhat was actually intended y beth parties. . . We further deen there to be no malice or conspiratorial fraud in thie matter but rather view the Conference of Personal Managers! contract to be a clever in terpretive attempt to avoid a governmental lic~ onsing requirenent . . . a shan not worthy of ‘enforcenent under the laws of the state of California.” ‘The Conni tee. interpreted "rider* provisions incorporated into the contract as authorizing defendants to veek a recording contract for the group and to accep’ >ffers of employment made t+ the group, In dlecussing the firstcreer Point, it was stuted: At various times throughout the cours of the contractual relationship respondents did prom se to obtein a record deal for the petitioner group. This promise, of course, being again in contra vontion of the Mcensing requirenents of Labor Code $ 1700 et seq. and inconsistent with the written contract's provisos relating to the duties of the ‘personal, managers.' * ‘The determination was slop significant in that the Committee concluded that procurement involved more than the initial overture, and that mere acceptance of euployment offers Without use of an artiste! manager or booking agent was in contravention of the act. Suprisingly, even though the contrast was found to be void, respondents ware allowed to retain the fees previously paid under the contract on a theory of quantum merit,ANALYSIS OF THR PROBLEM “The personal manager in California today Ae runing a trenendous risk by Delng alive,* (Woward Thaler, Conference of Personal Managers West spokesperson, at ‘Zenovich hearings)There is also a conflict between the findings and con- Glusions reeehed in the triad de nove of Ihe Jefferson Airplane Case and the determinations of the Labor Gow se joner, in that case as well as in Burlesque. While the ge court found Katz had not acted as an unlicensed artists’ manager even though procuring the RCA recording contract for the group, the Labor Commissioner found in both Ihe Jefferson Airplane and Burlesque that such activity constituted procurement under the Act, thus requiring an artists! manager's 11 cen: » The de nove court also found that accepting unsolicited offers of employment on behalf of the group did not come within ‘the mening of "procure", although * the Labor Commissioner s0 neld in both The Jefferson Aixlane and Burlesque. As a result of the above ca: and the uncertainty as to their precedential : value, personal manage: questioning the validity of their personal managenent contracts, and artists are finding it increasingly easy‘the artiste: The artiste’ managers Woilld, of course prefer that the personal manager be Pronibi ted from procuringemployment, including record contracts. The A.F. of M, would like to see the personal manager brought with- in the Moeneing requirenents of the Act, and likewise feel he should be prohibited from seeking empsoyment for the artist The personal managers want the protection of being licensed, but also want to be able to engage in _ Procurement of engagements to a limited extent, and to be able to seek recording contracts for their clients without restriction: The-Labor Comissioner wuld like to see all persons engaged in the occupation of either advising and oounseling the artist or procuring or attempting to procure employaent or ongagexents for the artists brought within the Labor Commissioner's Jurisdiction, and subject to similar ree strictions and regulations. Although there is general agreement between the various factors of the entertainnent industry as to the need for Licensing of personal managers, the problem i trying to satiafy all parties involved, and at the sane time notbe An conflict wth existing legislation, os well as the *y-Leus of the various unions and guilds to wich artists must adhere,PROPOSED LEOISLATION Asoembly 6412 2535 On February 15, 1978, Assembly ‘BL11 2535 was introduced by Assemblyman Fazio of sacramento. ‘ne Hill, which was the result of combined efforts of the A.F. of M. and Artiste! Manager's Guild, provides for the repeal of the Whetaore act, guprg, the licensing of both msical booking agenaies and personal managers by the Labor Comms. seLoner, and changing the classification “artists manager* to “talent agencies." in so doing, ¥ 1700.4 would be changed as follows: 1700.4 (a) A talent agency is hereby defined to be a person or corporation who engages in ‘the occupation of procuring, offering, promising, or attempting to procure employnent or engage- nents for an artist or artists. Talent agencies may, in addition, counsel or direct artiste in the development of their professional careers. (b) Personal manager means a person who engage An the occupation of advising, counseling, or directing artists in the develop. ment or advancement of tueir professional car~ A person who procures, offers, promises, oF attempts to procure employment or engagementsfor the artist in any way whatsoever is not a personal manager. ‘The following provision is to be added to 1700.5 of the Acts (b) The Labor Commissioner shall issue a separ= ate personal manager's license to all personal managers and shall adopt such rules and regulat= ions as are necessary to administer and regulat such license. ‘The other provisions of the Artiosts' Manager Act are to be left as they are, other than the suostitution of ‘the term "talent agency" wherever “artist ranager 1s presently used. Analysis of the Proposal The proposed amendments to the Artists’ Manager Act would accomplish three necessary and needed ends. First, the Whetmore Act would be repealed and the booking agency would ve brought under the jurisdiction of the Labor Commissioner, thus allowing for more efficient regulation. Second, personal managers would also velicensed by the Labor Commissioner and brought vith‘ n ‘the jurisdiction of that departaent.. Third, the “artists' manager" would no longer.be required to assume ‘the dual function of guiding the artist in the advancesent of his or her career and procuring employment for the artist. When viewed in light of the existing problems mentioned earlier, it becomes clear that the proposed changes do not reflect the needs of the personal man~ ager, but rather would benefit the artiste’ manager, whose duties and functions have already been specifically spelled out in the Artist: Manager Act. Overali, the proposal hi only two goals: to bring the musical book- Ang agency within the jurisdiction of the Labor Commission= er and to prevent the personal manager from engaging in procurement activities “in any way whatsoever.” The proposed anendaents are reflective of the attitude toward licensing personal managers vhich nas existed(aw skunk since the original enactment of the Artists’ Manager act. fnat is, everyone agrees that personal manzers should be licensed and regulated, but no one can come up with proposals for such regulation. Under the Proposed amendments, the task of developing rules and regulations governing personal managers is delegated to_ ‘the Labor Commissioner, thue leaving the personal man- ager's already uncertain fate to the mercy of the slow turning wheels of governmental bureaucracy. In fact, there is no guarantee, either to the personal manager or to the artiste’ manager, that the Labor Commissioner will act according to the needs of either. ‘The making of laws and enactnent of statutes are the function of the legislature, and not a governmental body such as the Labor Connissioner. If the proposed anendnents ware adopted and tne Labor Comm saioner given the power to regulate personal managers under rule: dev- oloped by tiat agency, the personal wanagers would neve:have had the opportunity to volee an opinion as to what his or her neods are. In sunmary, Ab 2535 is not representative of tne entertainnent industry nee nor of the personal manager’ s needa. It is a short-sighted attempt to pronibit the Personal manager from procuring employment, without substantive value or purposs. If a Ail] is to be Antroduced which will provide for regulation of the person- al manager, the bill should be reflective of the person- al manager's needs, as well as those of the indiatry. The Hew York Approach. At the Zenovich Hearings of 1975, doward Thaler, spokesperson for the Conference of Personal Managers, Proposed that California should adopt a provision sim- ilar to that of New York General Business Law $ 17), which states as followa: Definitions 8. “Theatrical Employment Agency" means any person. . . who procures or attempts to procure employment or engagenents for«+ sperformanoes, but such term does not Anclude the business of mmaging sich enter- teiments, exhibitions or performances, or the artists or attractions constituting the Anvolves. f en * (Eephasis added) Under the New York approach, @ person engaged as & personal manager who procires employment for the artist, "{nokdentally"is not required to be Licensed. Lf California wore to adopt this spproach, or modify it so that a Licensed personal manager could procire employment "incidentally", (See S¥ 838 and SB 1771, supra) this would allow the personal manager to seek roo ording contracts for the artist, and prevent actions such as Burlesque, supra. sowaver, such a proposal: would be opposed by the Artists’ Manager's ana as the AF. of Ns Although the AMG has stated that they do not oppose licensing of personal managers so long as the personal manager is subject to the sane regulationsas the artists’ manager, the AMG's support of proposals prohibiting the personal manager from procuring employment for the artist makes it clear that any legicistior. wilct allows the personal manager to procure employment or eng- agenents for the artists, even where only “incidentally”, i will be opposed. ‘The A.F.of H.'s concern in the Licensing of person al managers is for the protection of the artist from paying excessive fees. The maximum amount that the AvP. o f M, would authorize the artist to pay is 256 for any one engagement. Any legislation which would regulate fees charged by personal managers should toke thir into account. Proposal for Bedefining “Aptists’ Mansger” ‘As mentioned earlier, under the present wording of § 1700.4 of the Labor Code, a personal manager cane not be licensed as an artists! manager without eaming the duty of procuring or attempting to procure employment for the artist. it has been suggested that thewording be added to the statute: "A personal. manager or other person who engages in the occupation of advising, counseling, or directing artists in the deve! opment or advancenent of their professional careers ‘but who does not agree and is not contractually obligeted to procure or attempt to proture ‘employment for an artist may, but shall not bbe obligated to, obtain the license provided | for in § 1700.5 and, having obtained such license, such personal manager or other person may Procure or attempt to procure employment for the artist." (Letter fron Walter i. M. Lorimer to Senator Zenovich dated November 19, 17754 page 4-20 Zenovich tlearings Transcript) If this approach were to be adopted, tne personal manager would be able to act as a licensed artists! man- ager without assuming the duty to procure or attempt to procure employment, and would be subject to the sane regulations as the artists! manager. The .nly possible eriticisn the AMO could have to such a proposal i» that At Ln discriminatory in that it allows persons engaged eee ores ease reser eeehaving to assume the dual obligation of the artists’ manager. ‘hic suorteoming could be overcome by combining ‘the proposed anendnent suggested in AB 2535, gupra, with the above-suggested provision, As combined, the propos- al would read something like this: 1700.40) A talent agency is hearby defined to be a 6 Person or corporation who engages in the occupation of procuring, offering, promising or attempting to procure employment or engage= ments for an artist or artists. Talent agents may, in addition, counsel or direct artiste in the development of their profesvional careers. (b) A personal manager means a person who engages in the occupation of advising, counseling, or directing artiste in the development or advancement of their professional careers but who does not agree and is m+ contract ually obligated to procure or attempt .. procure employment for an artist. Such Person may, but is not obligated to, obtain the license provided in $ 1700.5 and, having done so, such personal manager may procure or attempt to procure employment for artisThe adoption of the above proposal would resolve the present dispute between artista! managers and persons. managers by requiring the personal manager to obt ia 2° artists' manager's (or talent agency's) license before procuring, promising to procure, or attempting to procure employnent for the artist. At the same timo, the arteists! manager would be relieved of the dity of advising and counseling the artist, but allowed to do s if he so desired. Such an arrangement would be acceptable to the A.F. of He, since the personal manager could te required to enter into a franchise agreement with the union before procuring employment for the artist, and ‘the unlicensed personal manager would be prevented from charging a fee in excess of the anount the urtist was allowed to pay by the union since the personal manager would be in breach of the fiduciary obligation owed the artist were he to do so.CONCLUSION vada, It is imperative that the legislature react! to the recent judicial and administrative detersinations affecting personal activities immeiterwiy, and that ‘the personal manager be licensed and his activities defined and approved. ‘Ine Whetaore Act should be - repealed, and all persons secagediice artists’ managers, booking agencies, telent agencies, ox personal managora should be governed by a single governmental agency, pref- erably the department of the Labor Commissioner. ‘The function of procurenent of employment or engag:- ments for the artist rest primarily with t:e artists! manager or booking agent, The persona. manager should be free to obtain the necessary licensing to engage in this activity should he so desire, but he snould nit be obligated to do so, a8 is the case at present. In developing such legislation, the interests of tne ee ete eee Saale foc oreeeeeeeesould be allowed to give the srtid the full cenofit of his oo her knowledge and sbilitios.April 2, 1976 Sengtor George N. Zenovich, Chairman Industrial Relations Committee State Capitol Sacramento, California 95814 Dear Senator Zenovich: The Guilds and Unions listed below hereby present td you their recommendations for legislation relating to Booking Agents and Personal Managers as follows: 1, All Theatrical Employment Agencies, otherwise known as Booking Agents, and including Musician Booking Agents shall be required to be licensed as Artists’ Managers by the Labor Commissioner under existing rules and regulations presently regulating Artists’ Managers. 2. Personal Managers, who in addition to advising, counseling or directing_artists in the development or advancement of their profes- sional careers, desire to procure or solicit employment for artists on either a primary or incidental basis shal] be required to be licensed as Artists' Managers under existing rules and regulations regulating Artists’ Managers, and as provided herein, Theatrical En- ployment Agencies. 3._ Personal Managers who engage in the occupation of advising, coun- seling or directing artists in the development or advancement of their careers and who agree not to procure or solicit employment for the artist under any circumstance , and who in fact do not do so, shall be licensed by the Commissioner under a separate section and under regu- lations promulgated by the Labor Commissioner. Such regulations shall provide, among other regulations, (a) for the submission of all con- tracts with artists for approval, (b) a prohibition against conflicts of interest such as employment of the artist in any capacity, (c) a prohibition against the procurement or solicitation of employment for the artists. In the event the Personal Manager shall nevertheless solicit or procure employment such activity shall be a misdemeanor. The groups recommending this legislation urge you to sponsor same and to arrange for Legislative Counsel to draft an appropriate amendment to your bill SB1822. The amendment should also contain provisions for the rescission of $B733. American Federation of Musicians American Federation of Television and Radio artists American Guild of Variety Artists Artists’ Managers Guild Directors Guild of Anerica Screen Actors Guild Writers Guild of America (West)RATISTS’ MANAGERS GUILD MARVIN Fania paesioeny November 22, 1977 Mr, James L. Quillin Labor Commissioner Division of Labor Law Enforcement 455 Golden Gate Avenue San Francisco, Calif. 94102 Dear Mr. Quillin: This letter is in response to your invitation’ of October’ 17 to submit suggestions for legislation which would provide legislative or ad- ministrative relief to meet the failure of current. laws to. adequately regulate persons representing performing artists in the entertainment ‘industry ; Basically the position of the members of the Artists' Managers Guild is and Tong has been that anyone who substantially performs the same functions as we do should be subject to the same statutory obligations and regulations as licensed Artists' Managers. .In furtherance of that position AMG, together with certain Guilds and.Unions, has successfully opposed législation offered on behalf of Personal Managers on three separate occasions, and only last year again successfully opposed a “fourth attempt by Personal Managers to have leg{slatfon introduced. All of these efforts by Personal Managers. have been to license per- sonal managers without their being subject to any state supervision or control of any kind and to allow them to procure "incidental" em- ployment for artists without being subject to franchise requirements of the varfous Guilds and Unions. Obviously these efforts clearly indi- cate that some Personal Managers do procure employment and indeed it was adnitted they do at the hearing before the Industrial Relations Committee of the Senate two years ago. So long as they maintain a friendly relationship with their clients they run no risk of being subjected to a suit to return conmissions under the Jefforson Airplane decision, That they have been successful in maintaining such a posture is shown by the fact-that there have been few, if any, direct applica- tions of Jefferson. One of the reasons Personal Managers have not been deterred from seeking employment is that there has been little risk of penalty in so doing. Not one Personal Manager of any stature in our sphere of the industry has been prosecuted fom operating as an Artists’ Manager without a license even though they secure employment for their clients, in large part because investjgative personnel has not been available. Further, however, in the event a Personal Manager was found in violation, he would probably pay a relatively small fine and’still have his Personal Manager contracts which do not obligate him to seekAUVemwer coy ba employment, ANG members have in recent years found that they are increasingly in competition in the market place with Personal Managers in seeking en« Ployment. Artists’ Managers who follow professional standards in regulations promulgated by the Labor Commissioner and Guilds and Unions are being discriminated against when compared to Personal Managers who suffer no regulation. Unlike Artists' Nanagers ,. Personal Nanagers are allowed to sign clients for up to seven years with no right of termina~ tion except failure to perform. Most such contracts provide no right to terminate unti] the artist.gives notice in writing describing the exact service required and then only in the event the Personal Manager shal] fail for a period of time to commence such service. A Personal Manager may charge whatever fee he can negotiate, generally from 15% to 50% whereas Artists' Managers must file a fee schedule and under Union and Guild franchises are limited to a 10% fee, except in the AFofM jurisdiction where the fee is 15% for engagements of three days or more and up to 20%.for short engagements. Personal Managers can and do enter into agreements which give them the right to appoint and discharge the Artists' Manager, provide for automatic extension of the agreement 17 the client fafis to timely notify the manager, and Provide for no recourse ‘for settling disputes except in court.” At the same time the Personal Managers’ obligations are limited to advising and counseling. In, fact, many Personal Managers sign clients to their = ° own record or publishing company, become promoters of concerts’ and employ their clients, become producers of motion picture or televisfon shows, etc., none of which Artists’ Managers are allowed to do either by ‘the Labor Commissioner or the Unions and Guilds. The menbers of the Artists! Managers Guild, who live with these problems dafly, have given considerable thought to the subject and, after consultation with affected Guilds and Unions, have concluded that the solution lies in legislation licensing Personal Managers under the Labor Commissioner. The legislation should provide. that the Labor Conmissioner, license all Personal Managers under a separate Personal Managers license, under which license Personal Managers shall be pro- hibited from procuring or soliticing employment for artists, either incidentally or otherwise, "unless they become licensed as Artists’ Managers. The Labor Commissioner should, after appropriate public hearings, adopt such other rules and regulations as are reasonably. Necessary to implement such licensing of Personal Managers. We believe the adoption of rules and regulations would afford all Parties the right to be heard with respect to. appropriate restrictions, taking into account whether certain present activities of Personal Managers, enumerated hereinabove, constitute, conflicts of ‘interest which should be prohibited.. The Personal Managers, and the Guilds and Unions who have first hand knowledge of possible abuses, could offer their views. An example. of clear cut conflict of interest has recently come to ANG!s attention, It involves some fReelance casting directors doubling as Personal Managers. This can be documented by us. One such casting director/personal manager is listed as representing over thirty actors,’ an excessive number by any standard in the Personal Nanager field. . The regulations should prohibit such activity.as: being a conflict of interest. | i