Cass Elliot of The Mamas and the Papas gave voice to the lament of some performers when she sang:
“Broke, busted, disgusted, and agents can’t be trusted . . .”
Some agents and managers are a lot like tattoos that are acquired in one’s youth: You want one very much, until you’ve got one. After that, both agents and tattoos are difficult and painful to get rid of.
An agent is nothing more nor less than a person (the agent) who acts in the place of, and for the benefit of, another person (the principal). Although capable of simple description, the legal relationship of agent to principal is intensely regulated by law.
Every agent owes his or her principal a fiduciary duty, the ultimate duty of trust in a business relationship. There is no greater legal duty owed by one person to another than that of a fiduciary, an obligation to treat the principal’s interests as deserving a greater degree of protection than the agent’s own interests. Agents owe their principals a duty to act with the highest level of integrity, honesty, fair dealing and dedication.
Does this sound like your agent?
Employing agents is traditional in the entertainment business, where agents receive a percentage of the compensation they are able to negotiate for their clients. Beyond the clear obligations imposed upon agents by the legal definition of the fiduciary relationship, each state also closely regulates the conduct of agents representing talent, requiring that they be licensed, and stipulating the maximum commissions they can charge.
Notwithstanding the intense regulation of agents and the fiduciary duty they owe to their clients, stories about predatory agents acting in their own interests, rather than those of their clients, are legendary.
In the motion picture and television business, where it is effectively impossible to get a job without an agent, the unions representing talent have developed different, but equally complex and sophisticated relationships with talent agents, who also represent union members.
The unions representing actors focus on protecting the actor from the agent, and closely regulate what the agent can and can’t do. The immense amounts of money generated in that business, coupled with a powerful agent’s ability to “package” a team consisting of their own clients (a director, a writer and any number of actors) for a movie or television program, accords the talent agencies much greater clout within the industry than the unions currently wield.
The director’s union and the writer’s union adopted a somewhat different approach. The unions are able to regulate some aspects of the relationship between agents and union members, through their power to have agents “authorized” or “sanctioned” by the union. But these unions recognized a more basic reality: The unions and the agents generally share the common goal of negotiating the best possible deals for the artists they each represent. Yes, the agents had the ability to control the industry by withholding individual services, but only the unions had the legal right to arbitrate against the employers and to quickly and inexpensively enforce the conditions of the basic agreement upon which the deals negotiated by the agents were predicated. And the unions fulfill that function without charging any legal fees to their own members or the agents.
The mutual recognition of this symbiotic interest led to a relationship in which, to a significant extent, the agents and the unions collectively enhanced their individual abilities to represent their principals. The agents and the unions became more effective and were in turn better able to make deals for the artists they both represented.
In the opera business, however, for many years the formal relationship between AGMA and the agents representing its solo artist members was pretty much nonexistent. An Eisenhower-era document called the “AGMA Authorized Agents Agreement” existed, but it was more an historical anomaly than a binding agreement. Agents were, if anything, antagonistic to AGMA and were completely unable to recognize the joint goals that AGMA shared with them.
Problems between AGMA-represented solo singers and their agents were rampant, but few if any members asked AGMA for help. Allegations of double-dealing, inappropriate conduct, monthly retainers that produced no jobs, bills for monthly expenses that were never expended, and complaints about unethical behavior were commonplace with regard to the smaller agencies and some individual agents.
Some of the larger agencies eventually recognized that AGMA could be of help to them, and some years ago AGMA began a series of meetings with them to explore the concept of common interests. AGMA needed assistance in protecting contractual staffing requirements. and the agents needed help from AGMA to collect unpaid commissions. They tried to find a common ground upon which to build a more lasting relationship.
AGMA also asked its lawyers to review the law in the state of New York with regard to the regulation of talent agents. That research led to some surprising discoveries: First, all talent agents and agencies in New York are required by law to be licensed. Second, an unlicensed agent may not sue in the New York courts to collect unpaid commissions. Third, any attempt by an unlicensed agent to collect an unpaid commission is a misdemeanor.
The principal court case that dealt with these issues held that simply calling oneself a manager, or even actively managing an artist’s career, was irrelevant. If the manager’s primary responsibility or primary activity was to find jobs for an artist, the law deemed that person to be an agent. In turn, the court said, any such agent must be licensed or cannot collect commissions, regardless of what they call themselves and without regard to the language of the contract between the agent or manager and the artist.
This case was crucial to the interests of our members because of another discovery we also made: Most of the major agents, and almost all of the minor agents, and managers representing opera singers, are not licensed and, as a practical matter, could not easily become licensed.
That fact, we believe, ultimately will result in a revolution in the relationship between agents, AGMA, AGMA’s members and the way in which agents represent those members.
While AGMA’s professional staff and its outside lawyers were reviewing the various ways in which we could use this information to help our members, two fortuitous events occurred at the same time that made it possible for us to take action. A solo artist of name-recognizable stature, who had never before been involved with AGMA in anyway, received two letters simultaneously: his dues bill from AGMA and a letter from his agent’s lawyer threatening to sue him for unpaid commissions. Angry and frustrated, and thinking of AGMA because of the dues bill, the singer called to see if we could help.
First, we inquired as to why the artist had not paid the commission. The artist told us he had discovered that his agent had been offered a job for him, had falsely told the prospective employer that the artist was unavailable, then accepted the same job for another of his clients at a higher fee (and, thus, a higher commission)—and then actively concealed all of this from both clients.
Moreover, the singer complained, the agent charged him a monthly fee for “expenses,” yet refused to provide any accounting of those expenses. Finally, the singer was upset because the agent had not secured any other bookings for him in many months. When the singer advised the agent that he was terminating their relationship and that he would no longer pay the monthly “expenses,” the agent’s lawyer threatened to sue.
We investigated further and found that neither the individual agent nor the agency itself, both in New York, were licensed, despite the fact that they represented scores of singers and had been collecting commissions from those singers for years. Having established a prima facie argument that the agent had breached his fiduciary duty, we explained the law to the singer, told him what AGMA could do to help him, assured him of a vigorous defense of his rights, and also explained the potential risk if he stood up for those rights.
With his permission, we advised the agent and the agency’s lawyer that since the agent was not licensed, he could not collect commissions and could not collect any expenses unless he could actually account for them, and that no AGMA member could be bound to any contract by an unlicensed agent or by a licensed agent who breached his or her fiduciary duty to that AGMA member.
When the lawyer claimed that the agent wasn’t an agent but was, instead, a manager, we advised the lawyer that since the alleged “manager’s” principal responsibility was to find jobs, and since the finding of jobs was principally what the supposed “manager” did for all of our members that he represented, both the “manager” and the agency were “agents” under New York law and could not evade the licensing requirement by claiming to be only managerial.
Wrong about the facts and the law, that lawyer was right about one thing: He claimed that the entire agenting industry worked in this manner, with unlicensed agents and managers routinely representing singers, suing for commissions and claiming to be managers rather than talent agents. He was right about the widespread industry practice, but industry practice is no defense against the mandates of the law.
More to the point, this gave us an opportunity to help our members by re-examining the overall relationship between singers and their agent. It allowed AGMA to create a strategy to eliminate all of the inappropriate practices that permeate that relationship and change the way in which all the agents work.
We reached out to our other solo artist members and asked them to tell us what issues they found to be the most troubling in their relationships with their agents. Foremost among their complaints was the allegation that all agents (large agencies, small agencies and solo agents) inappropriately took commissions on per diems, travel allowances and housing stipends. Next, the singers complained that because agents had greater bargaining power, they locked singers into exclusive contracts but failed to deliver sufficient work opportunities. Other members complained about being charged for unspecified expenses—and many members complained about being charged monthly retainers but receiving little, or no, guidance, jobs or help.
In response to these issues, we decided that the best approach would be to draft a completely revised version of an agreement pursuant to which AGMA would grant its approval to a group of “AGMA-Authorized Agents and Managers.” Such an agreement would prohibit the sort of problems and abuses reported by our members and, as a quid pro quo, would make it easier for agents to collect commissions when those commissions were appropriately due, through an expanded system of arbitration.
Ultimately, once we negotiate the final version of that agreement with the major agencies, AGMA plans to amend its Constitution and Bylaws so as to mandate that AGMA members can be represented only by such AGMA-Authorized agents and managers.
AGMA is now in the midst of negotiating the details of such an agreement with several of the major agencies. Once a mutually agreed upon version is drafted, smaller agencies, individual agents, and opera managers will be given an opportunity to become signatories to its provisions. When the AGMA-Authorized Agents and Managers Agreement becomes the industry standard, and when AGMA has amended its Constitution so that members must use authorized agents and managers only, the relationship between agents, managers and AGMA members will become highly regulated and effectively monitored. Inappropriate practices, unfair commissions, illusory expenses and uncancellable contracts will become a thing of the past.
Although the specific details and enumerated prohibitions must still be worked out, the agreement will define the word “agent” very broadly, and it will include “every agent, manager, personal representative, person and business entity that represents artists who are members of AGMA for the purpose, in whole or in part, directly or indirectly, of securing performance bookings or other employment for such artists and who conduct compensation negotiations with regard to the employment or services of such artists.”
Thereafter, every contract, agreement or understanding between an agent and an artist would be deemed to incorporate and include all of the provisions of the agreement. In the event of a conflict between the provisions of such contracts, agreements or understandings and the provision of the agreement, the provisions of the AGMA Authorized Agents and Managers Agreement would take precedence.
As stated in its preamble, the objective of the AGMA-Authorized Agents and Managers Agreement is to “enforce and monitor the area standards and industry standards gained through collective bargaining and to do so by establishing the highest degree of professional competence, conduct and integrity in the representation of artists who are members of AGMA, including concert and operatic singers, dancers, choreographers, stage directors and their assistants, stage managers and their assistants, and other live performers and production personnel within the scope of AGMA’s jurisdiction as established by the AFL-CIO or otherwise.
“In carrying out its authority as the exclusive collective bargaining representative of artists, AGMA notes the industry practice of allowing agents to perform a specific and limited aspect of AGMA’s federally protected exclusive rights, specifically the authority to negotiate certain ‘wages, hours and terms and conditions of employment’ of individual artists employed by employers who are parties to collective bargaining agreements with AGMA. In exercising that authority, an agent must conduct himself or herself at all times as fiduciary of the artist. AGMA expects that each and every agent who is a signatory to the agreement will strive to attain, achieve and maintain the most exemplary levels of quality, honesty and integrity. At a minimum, each agent would be expected to become knowledgeable about the applicable AGMA collective bargaining agreements, basic negotiation strategies and techniques and those areas of the law relevant to the professional duties of an Agent.”
The essence of the agreement will consist of the several basic understandings outlined below, which will be more fully described within the agreement itself. The basics are:
An agent’s relation and obligation to artist shall be that of a fiduciary.
An agent shall not represent any artist employed by employers who are parties to collective bargaining agreements with AGMA, unless the artist is or becomes a member of AGMA within the time period prescribed by law and remains a member of AGMA in good standing during the term of this agreement.
An agent may not charge any artist a monthly retainer or other regularly recurring fee.
An agent is entitled to receive and collect commissions from artists in accordance with the schedule and provisions contained in the agreement, for any and all employment secured by the agent for and performed by the artist.
An agent is not entitled to collect commission from artists for per diem, transportation, travels, housing, or other advances or reimbursements made to the artist by others for the artist’s expenses.
An agent is entitled to enforce his or her right to collect such commissions pursuant to the arbitration provisions contained in the agreement, and neither the artist nor AGMA shall be entitled to raise the agent’s license status or lack thereof as a defense to an otherwise valid claim for payment of a commission.
Any and all disputes arising under the agreement or arising otherwise between an agent and an artist (including but not limited to claims for commissions, allegations of bad faith dealing by either the agent or the artist, the refusal of AGMA to authorize an agent, or the withdrawal of such authorization) shall be exclusively resolved pursuant to the arbitration provisions of the agreement and any arbitrators award may be, per se, enforced in any court of competent jurisdiction.
An agent is entitled to be reimbursed by the artist for all reasonable expenses incurred with the artist’s consent on the artist’s behalf, but must account to the artist for all such expenditures.
Neither the agent nor AGMA shall discriminate against or in favor of any artist because of his or her race, sex, age, national origin, sexual orientation, or membership in AGMA or any other labor organization.
The agent agrees to perform in such a manner so as to ensure the effective representation of the artist and at all times to protect the best interests of the artist.
The artist shall fully, fairly and completely abide by all of his or her obligations to agent; and
Any artist may terminate his or her agreement with any agent if the agent breaches his/her fiduciary duty to the artist, rejects any offer of employment for the artist without the artist’s informed consent, or fails to secure employment for the artist within a reasonable period.
The scope of the agreement will “cover the activities of agents and the employment of AGMA-represented artists in live performances and the simultaneous or subsequent release of artists’ work product in any and all media now existing or hereafter discovered or invented, including but not limited to release of such work product on television, radio, CD, DVD, VHS, over the internet or electronically and distributed in any other form or by any other means, or otherwise.” Reflecting the recent recapture of AGMA’s jurisdiction from AFTRA, the agencies will agree that no union other than AGMA has any right to negotiate any aspect of such compensation for AGMA members.
The standard for becoming an AGMA-Authorized Agent will also be specified. AGMA will grant authorization to agents who apply to be AGMA-Authorized Agents if such agents:
• Are licensed by the city or state of New York or the states of California or Illinois to act as theatrical booking or entertainment or employment agents, or
• Are already authorized to act as agents by Equity, SAG or AFTRA,
• Are employed by CAMI or one of the other, established multi-agent agencies, or
• Represent at least 10 current members in good standing of AGMA, or
• Otherwise demonstrate an ability consistent with the principles set forth in this agreement, unless in AGMA’s opinion the application, or investigation thereof, discloses facts that show the applicant should not be authorized.
When an agent applies for authorization from AGMA, the agent must agree not to evade, circumvent or violate, or seek to evade, circumvent or violate, any of these regulations or any part thereof, either directly or indirectly, nor will the agent permit such evasion, circumvention or violation through channels of any controlled, allied or affiliated firm, corporation or person.
The commission structure under the agreement will reflect current industry practice, with the understanding that no commission is due for any fee that is not at least AGMA scale plus 10 percent:
1. No artist shall be required to pay any agent or agents an aggregate commission in excess of the maximums set forth in the agreement. No agent may arbitrate or otherwise attempt to collect a commission in excess of the maximums set forth.
2. The maximum commissions that Agent may receive from the fees of the Artist for all engagements shall be as follows:
• Operatic engagements 10%
• Dance engagements 10%
• Regular concert engagements including recitals given at
risk and expense of Artist), symphony orchestra and
oratorio 20%
• Live/Live to tape engagements for television 10%
• Civic and community engagements 15%
• Release in other media (of all additional over-scale compensation received by the Artist for such release) 15%
3. Except where the artist fails to appear without just cause, commission shall be payable by the artist to the agent only when, as and if such monies are received by the artist or by anyone on the artist’s behalf. The agent may reserve the right to collect all monies payable to the artist on which commissions are payable to the agent, and the agent shall use his or her best efforts to collect any and all monies due the artist on which commissions are payable to the agent.
4.The agent’s commissions shall be based on the fees actually received by the artists for their actual services, performances or engagements, or amounts received under their contracts for such services, and shall not be based upon any amounts received by the artists as reimbursement for per diem or other expenses, advances for or prepayment of, expenses such as cost of transportation.
In establishing this agreement, prior problems with supposedly “uncancellable” contracts will be eliminated. The agreement will provide that (subject of course to the continuing obligation to pay the agent for any work previously booked by the agent for the artist) any artist may terminate his or her agreement with their agent, if:
• The agent’s authorization is withdrawn by AGMA.
• The agent has (in the opinion of the artist) an excessive number of persons in the artist’s category under its management and the agent, therefore, is no longer able to manage the artist properly, or
• The agent has booked the artist for an engagement that is in any manner injurious to the artist’s career or in places that are not appropriate to the standing of the artist or in furtherance of the career of the artist, and the artist desires that his Standard Agent-Artist Contract be terminated; or the agent has refused a bona fide written offer for the artist’s services for reasons other than the best interests of the artist or without the artist’s knowledge or informed consent; or the agent has not secured a significant booking for the artist’s services for a period of more than ninety (90) days.
In the event of the artist’s termination of his or her agent, the artist shall in good faith nonetheless fulfill all of his or her obligations for engagements secured for the artist by the agent prior to the effective date of such termination and shall, unless otherwise decided by arbitration, pay the commissions thereon and all other sums owing by the artist to the agent.
In addition to the broad scope and coverage of the agreement, the enforcement of all rights under the agreement will be pursuant to a very broad arbitration provision:
“As a part of the essence of this agreement, it is the intention of all parties that the arbitration process set forth be the sole and exclusive method for resolving any and all disputes that may arise from the provisions, interpretation, application or enforcement of the agreement, as well as for disputes arising out of AGMA’s refusal to authorize any agent, or AGMA’s decision to withdraw such authorization. The arbitration process will be governed by the Labor Arbitration Rules of the American Arbitration Association, except where this agreement provides otherwise.” This will ensure that those disputes—which involve essentially internal matters concerning the relationship between the individual artists, AGMA in its capacity as their exclusive bargaining representative, and agents performing certain delegated representative functions relating particularly to individual artist compensation negotiations—will be handled and resolved expeditiously by the arbitrator, without the need to resort to costly and time-consuming adjudication by the courts. As a condition of entering into this agreement and as a condition of membership in AGMA, the agent and the artist herewith consent to entry of judgment against them by any court of competent jurisdiction for the enforcement of any arbitrator’s award rendered in any arbitration conducted pursuant to this agreement.
The agreement will also provide that the parties to disputes should have the freedom to explore compromise and settlement and to assess the possibilities for resolving contested matters, and, accordingly, all evidence of statements or conduct made in compromise or settlement negotiations will not be admissible.
Likewise, the fact of whether the agent is licensed cannot be raised before an arbitrator, and the fact that the agent is not licensed shall not be a defense to the collection of commission or a change to the enforcement of an arbitrator’s award, by any party, if the commission is otherwise appropriately due.
This new agreement and its sweeping coverage will be the cornerstone of a revised industry-wide relationship among agents, AGMA and all of the artists AGMA represents.
Thanks to the willingness of a few AGMA members to stand up for their rights and those of their co-workers, coupled with the exceptional legal and negotiating skills of AGMA’s staff, the dawn of a new relationship between agents and artists is at hand.
Any singer, current AGMA member or potential future member, should feel free to contact AGMA (at AGMANY@aol.com) for help, guidance or assistance with regard to this or any other employment related matter. AGMA is vigilant in its defense of members’ interests, the protection of equality of employment opportunities, and the prohibition of any form of illegal discrimination.
