Points & Authorities - Summer 2013: Companies Beware When Using Models and Spokespeople in Advertisement Campaigns

by Buchalter
Contact

Due to a recent increase in wage and hour claims in the entertainment industries, companies using models and spokespeople for their advertising campaigns need to be conscious of how they treat talent who are not covered under a collective bargaining agreement. (This excludes celebrity spokespeople and supermodels that are covered under a SAG-AFTRA agreement, or one with the American Association of Advertising Agencies and/or the Association of National Advertisers). Failure to do so may expose a company to unnecessary, costly California Labor Code claims.

Companies often retain the services of talent through a talent agency. At times, a company will rely on an independent contractor photographer, advertising agency or director to obtain talent for a photo shoot or commercial advertisement. Typically, a claim filed by the plaintiff’s bar will assert that the model or spokesperson who provided these advertisement services, even if only for a few hours, a day or a few days, was an employee of the company and not an independent contractor.  Thus, he is not only entitled to overtime pay and all pay by a date established under the California Labor Code for employees, but also penalties related to violations of the pay provisions of the California Labor Code.. 

A company that terminates an employee must pay him all wages on the day of termination under Labor Code section 201. If it can be established the “employee is engaged in the production or broadcasting of motion pictures” or whose “job duties relate to or support the production or broadcasting” and who is hired “for a period of limited duration” including on the basis of  one or more daily or weekly calls,” then the Company must pay the employee by the “next regular payday” under Labor Code section 201.5. Under Labor Code section 201.5, “production or broadcasting of motion pictures” is further defined to include “commercial advertisements.” Should an employer fail to make such payment, an employee is entitled to a continuation of wages for up to 30 days. Hence, if a model charges a fee of $1,000 per day and was not paid within 30 days of the end of the shoot, the model, if found to be an employee, arguably would be entitled to penalties in the amount of $30,000. 

Attorneys for models and spokespeople are using Labor Code sections 201 and 203 and 201.5 and even Labor Code section 204 (sets forth a limitation on how often and when pay days must occur), as tools to squeeze exorbitant penalties out of companies, often offering to “settle” these cases for a much lesser amount than the full amount alleged to be owed.  

To support their arguments, Plaintiffs rely primarily on a 1980 California Court of Appeal’s case, Zaremba v. Miller, which held that professional photography models generally render their services as employees. That case involved a model who was hired by a photographer for a photo shoot that lasted two hours. The model obtained the job through her agent and her agent billed the photographer for the services once the model completed the shoot. The photographer failed to pay the model for five months. In defense of the claim, the photographer argued the model was an independent contractor and that it was customary in the industry to pay the model once the photographer was paid by the company. The Zaremba court did not accept these arguments and awarded the model waiting time penalties.

Hence, companies that use the services of a model or spokesperson, directly or through a photographer, director, or talent agency, should take important steps to avoid or minimize a finding by a court, or the California Division of Labor Standards Enforcement, that the company is actually the employer of the model.

The most typical defense a company can assert is that the model or spokesperson is not an employee, but an independent contractor. In determining this, the most important factor a court or labor commissioner will analyze is whether the company had the right to control the means and manner of the job. In other words, if the company tells the model or spokesperson where to go, when to show up, what to wear, how to model or present whatever product the company manufacturers, what make-up to wear, what hairstyle to wear, and when to leave, it will be more likely that a plaintiff will be able to argue the company exerted enough control for it to be considered the employer.

Obviously, every case is different, so the decision will turn on specific facts. In some cases, a company will have very strong arguments the model or spokesperson truly is an independent contractor, and therefore, litigating the issue would be appropriate, particularly if the company sees this as an ongoing issue. In other cases, defense counsel’s role would be to make the best possible arguments with the hope of gaining as much leverage as possible to force a more palatable settlement. Since these cases are fact intensive and many could go either way, the results of the independent contractor analysis will be the primary factor in determining whether or not a company will be liable for wages still owed and/or waiting time penalties. Another defense companies can assert in waiting time penalty cases is that the failure to pay was not willful (i.e.Labor Code section 203 requires a “willful” failure to pay by the employer) and that they had a “good faith belief” that the model was not an employee of the company.  While asserting the “lack of willfulness” and “good faith belief” are proper defenses to penalties, labor commissioners who find that a company exerted enough control over a model or spokesperson to warrant a conclusion that they were, indeed, an employee are less likely to reduce or eliminate a sought-after penalty based upon these arguments. However, such defenses under the right set of facts are more likely to be given greater credence in a court proceeding.

In order to protect against these types of claims altogether, a company should exert as little control as possible over the model or spokesperson for an advertisement campaign. If that is not possible, a company should make arrangements with the talent agency or photographer to make payment to the model immediately or as otherwise required under the Labor Code (i.e. Labor Code section 201.3 allows for payment by a “temporary services employer” on a weekly basis and Labor Code 501.5, if applicable, the “next regular payday”).  Companies should also have written agreements with the talent agencies and photographers supplying them with the model or spokesperson. These agreements should contain indemnity provisions in the event they fail to make a timely payment to the model or spokesperson. 

Thus, the best practice is to make sure a company does not exert overly broad control over the model’s or spokesperson’s services. When this is unavoidable and a company could potentially be found to be an employer of the model or spokesperson, it is important to compensate them as quickly as possible upon completion of the assignment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Buchalter | Attorney Advertising

Written by:

Buchalter
Contact
more
less

Buchalter on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.