Monday, July 08, 2013

Independent Contractors and "Work For Hire"

If you've worked in the cartoon biz for any length of time, you know the "work for hire" dance. Most Personal Service Contracts, most deal memos, make sure that there is language tucked inside one or more paragraphs that make sure the company for which the employee or sub-contractor is doing work owns the copyright.

But there is, apparently, a bit of a wrinkle for artists and writers laboring as "independent contractors:"

Producer beware: “Work Made For Hire” agreement creates a “statutory employee” relationship.

... [A] common practice in Hollywood is to treat many of the creative personnel in the film, television and music business as Independent Contractors, but requiring that the creative work they do belong to those who hire them, under the copyright act's definition of “work made for hire”. ...

[But] the Employment Development Department of the State of California (EDD) has taken the position that “work made for hire” language included in an agreement that otherwise provides for consultant or independent contractor services, nonetheless renders the contractor a statutory employee. ...

What this means for producers and businesses in the Entertainment Industry is that if a writer, director, performer, or anyone else working on your project is otherwise an independent contractor, and if the contract with that person provides that any “results and proceeds” are considered “works made for hire” (thereby vesting ownership of copyrights in the producer or company) each of those “contractors” would be deemed a statutory employee, and the Producer would be required to satisfy Unemployment Insurance, Disability and Worker Compensation requirements. ...

Here in Cartoonland, I've thought the "Independent Contractor" label was mostly a dodge by companies eager and happy to avoid taxes and stiff artists since the time of paint, cels and actual brushes. (You know, back when U.S. Grant was President?) I've just had my nose rubbed in How Reality Works In The Actual Workaday World to believe any different.

If artists are being supervised and reworking things that don't meet a company's exacting standards, then they are being treated as employees. At least, that's my take after traipsing around studios for a few decades. But get five or eight lawyers in a room and half of them will conjure up some different answer. (There's a surprise.)

Attorney Gordon Firemark lines up with me, but I guess the lawyers who really count are the men and women of SCOTUS. When they weigh in, we'll have more clarity. But right now, things are still up in the air.

But go read Mr. Firemark's analysis at the link up on top and draw your own conclusions. If nothing else, it will cause you to pause ... and reflect.


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