MANAGER ATTEMPTING TO OPTION SCREENPLAY VIOLATES LABOR CODE

February 8, 2002

MANAGER ATTEMPTING TO OPTION SCREENPLAY VIOLATES LABOR CODE

Agents are licensed by the California Department of Labor. Managers are not. Agents can procure employment for artists, while managers cannot. It is not always clear, however, when a manager’s activities are considered procuring employment. One might think that selling a writer’s finished script is not procuring employment because the writing services have been completed. But a recent decision by the California Labor Commissioner has come to a different conclusion.

A manager attempted to sell two of his client’s screenplays. After the manager left the management business, the writer optioned the works the manager had previously submitted. The writer didn’t pay the manager a commission on these deals, as the writer was obliged to do under the terms of the management contract. The manager sued. The suit was stayed while the Labor Commissioner determined whether the manager had acted illegally because he was not a licensed talent agent.

The Labor Commissioner concluded that absent compelling evidence that no future services of the writer are contemplated, a manager shopping scripts is procuring employment and violating the labor code if he is not a licensed talent agent. The commissioner noted that screenwriters who sell spec screenplays usually want to be hired to do any rewrites needed, and often they are hired for that purpose. Indeed, in this case, the writer was employed to render additional writing services.

Because the manager acted in violation of the Talent Agencies Act, the management agreement was unlawful, and the manger is unable to enforce its provisions.

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