May 17, 2019 LOS ANGELES DAILY JOURNAL

Is The Labor Commissioner’s

Enforcement Of The Talent
Agencies Act Defensible?
Part II
During oral argument in Marathon Entertainment v. Rosa Blasi, 42 Cal. 4th 974, 988 (2008),
Justice Katherine Werdegar noted that California’s Talent Agencies Act was enforced even
harsher than the California State Contractors Act and wondered aloud it that should be.
Without the written prohibitions and notice of penalty when non-licensees engage in a
restricted activity, the justice’s instincts were right; the penalties should not just be less severe,
there should be none.
“The Act is silent — completely silent — on the subject of the proper remedy for illegal
procurement.” Marathon, 42 Cal. 4th at 990. A Dec. 19, 2013, Daily Journal article, “A generation
of incorrect Talent Agencies Act rulings,” discussed the repercussions of the lack of a penalty
provision, including how state law bans administrative agencies “by its own regulations create a
remedy which the Legislature has withheld.” Dyna-Med Inc. v Fair Employment & Housing
Commission, 43 Cal. 3d 1385, 1388 (1987), quoting Morris v. Williams, 67 Cal. 2d 733, 748
(1967) (internal citations omitted).
Some argue that a prohibition of an activity implies a penalty. Even accepting that supposition,
there must be legislative guidelines as to what the consequence should be. With no penalty
provision, no statutory fine, penalty or consequence, no adjudicator has authority to penalize.
Creating statutory guideposts “is a task outside the bounds of judicial interpretation.” U.S. v.
Evans, 333 U.S. 483, 495 (1948). As the California Legislature did not give “the statutory
authority” to affect a TAA violator’s contractual rights, neither the Labor Commission nor a
court, “by judicial fiat, create such authority. That determination is a matter for the legislature.”
AFL v. Unemployment Ins. Appeals Board, 13 Cal. 1021, 1037 (1996).
Others claim that as the TAA remedies are civil and not criminal, a lower level of clarity is
required. Not so. “Engrained in our concept of due process is the requirement of notice. Notice
is sometimes essential so that the citizen has the chance to defend charges. Notice is required
before property interests are disturbed, before assessments are made, before penalties are
assessed.” Wolff v. Fox, 68 Cal. App. 3d 280 (1977) citing Lambert v. California, 355 U.S. 225, 228
(1957). While the “strict constitutional safeguards afforded to criminal defendants are not
applicable to civil cases … the basic protection against 'judgments without notice' afforded by
the Due Process clause [citation] is implicated by civil penalties.” BMW of America v. Gore, 517
U.S. 559, 574 (1996).
The labor commissioner finds the authority to void a violator’s contractual rights from
Buchwald v. Superior Court, 254 Cal. App. 2d 347 (1967): “Since the clear object of the Act is to
prevent improper persons from becoming artists' managers and to regulate such activity for the
protection of the public, a contract between an unlicensed artists' manager and an artist is void.
(See Wood v. Krepps, 168 Cal. 382, 386; Loving & Evans v. Blick, 33 Cal. 2d 603, 608-609; …
Contracts otherwise violative of the Act are void (see Severance v. Knight- Counihan Co., 29 Cal.
2d 561, 568; Smith v. Bach, 183 Cal. 259, 262.” Id. at 351.
The 2013 Daily Journal article examined Buchwald’s four California Supreme Court precedents
and found the court had misinterpreted each of the holdings. As the TAA’s statutory language
had no penalty for unlicensed procuring of employment, it should have upheld the non-licensed
representative’s contractual rights. Individually and as a group the precedents hold that
without a codified remedy, there is “no implication of prohibition” (Smith) and there is no
indication that the failure of getting a license “was intended to affect in any degree the right of
contract.” (Wood) It is the “imposition by statute of a penalty implies a prohibition of the act to
which the penalty” (Smith), not the other way around.
Besides the constitutional problems of the TAA’s vagueness as to what activities are regulated
and consequences of ignoring those regulations, there is a more basic question: Is there a
rational basis for the licensing scheme? In a world where so many are trying to make a living as
exotic dancers or in adult movies, is there really a risk of ingenues being unwantedly lured into
such professions? And why do all artists, of every age and conceivable gender, need that
protection; is there a risk of a middle-aged actor being lured into a life of prostitution? As these
are professions with 90 percent unemployment, that means approximately 90 percent of the
time these people are getting hired for positions without such protections. Why do they need
protection only when seeking out their dream jobs?
Quoting Marathon, the TAA is “a blunt and unwieldy instrument … of little use to unestablished
artists … and may well punish most severely those managers who work hardest and advocate
most successfully for their clients, allowing the clients to establish themselves, make
themselves marketable to licensed talent agencies, and be in a position to turn and renege on
commissions.”
The TAA was enacted to benefit artists. How does requiring a sportscaster renegotiating his
KNBC contract to spend 10 percent on an agent serve the protected class when an attorney, a
negotiation specialist, can be paid 5 percent or by the hour?
To abide by current TAA enforcement, when personal managers get clients work in another
state using a regional talent agency, the artist still needs to pay a California-licensed agency.
How does the need to pay another 10 percent to an in-state agency for out-of-state work the
agency had nothing to do with benefit the protected class, a burden that seems to violate the
dormant commerce clause of the U.S. Constitution? Alternatively, the procuring agency could
get licensed; however, requiring an out-of-state agency to get a license in order to hire a
California-based artist to work in their state has continuously be seen as an unconstitutional
barrier to interstate commerce.
There must be some regulation. Whether an agent, personal manager, attorney or publicist,
anyone who holds a client’s money should be bonded, but the current flat fee is $50,000. That
cost makes it impossible for a young entrepreneur to legally represent his bandmate friends.
More important, the large talent agencies can often be holding over $10,000,000 of their
clients’ earnings, rendering a $50,000 safeguard worthless. The bonds should relate to the
amount of monies the representatives hold.
Though doubtful, the state may want talent agencies to have a monopoly on procurement as
the labor commissioner currently enforces; it is the Legislature’s choice. But everyone needs to
know exactly what activities, if any, are going to be reserved for licensees, and what the
remedies will be for ignoring those prohibitions. In the meantime, the Labor Commission needs
to enforce the TAA uniformly, and that includes speaking out against packaging and agencies
having equity in companies that employ artists. Including, until there is a statutory guideline of
what the remedies should be, accepting that it has no authority to meet out any penalties.
Time after time the Labor Commission has been found unable to have the proper grasp on how
to enforce the TAA. The state Supreme Court, in Marathon, had to tell the commission it was
wrongly not incorporating severability into its decision-making process. The U.S. Supreme
Court, in Preston v. Ferrer, 552 U.S. 346 (2008), ruled the commissioner was wrongly accepting
petitions for controversy and ignoring arbitration clauses. For the good of the writers, lawyers,
personal managers and artists in general, it is time the administrative agency got one right.
Rick Siegel is a personal manager who is often engaged as an expert witness on the history,
construction and application of the Talent Agencies Act.