For creatives in California, a recent employment law case may raise concerns over copyright ownership

For creatives in California, a recent employment law case may raise concerns over copyright ownership

This story was first published for the 1709 Blog, where I regularly write about copyright law in entertainment, technology and media. 

A California court ruling from April has raised concerns regarding its potential impact on copyright ownership. In Dynamex Operations West, Inc. v. Superior Court of Los Angelesthe matter before the court was a wage dispute, which required the court to consider the standard to apply in determining whether workers should be classified as employees, or as independent contractors.

Nowhere in the 85-page judgement is “copyright” or even “intellectual property” mentioned. However, in a state with so many media and software companies, the new ruling could affect whether a creator or a company gets to claim ownership as the original author of a work. In deciding if a worker is eligible for statutory employment protections, Dynamex replaced a complex multi-factor consideration with a simple three-part “ABC” test. Now, Californian companies are burdened with the requirement to prove that all three parts weigh against an employment relationship.

What does this mean for copyright law? The rise of the gig economy, which is characterised by short-term contracts and freelance work, poses new questions for intellectual property ownership. To determine if someone is an employee for purposes of copyright authorship, American Federal courts currently use a test in the US Treasury Department’s Internal Revenue Service code.

If, however, the courts start looking to the Dynamex case for guidance, people’s expectations might change. Speaking to Bloomberg Law, music industry lawyer Michael S. Poster explained: “If, under California law, a lot more people are going to be treated as employees rather than as independent contractors, chances are that a lot of their work product that they would have retained a copyright interest in might belong to their employer.”

Although the Copyright Act of 1976 provides authors with initial copyright interests, under the work-made-for-hire doctrine, it is the employer that is considered to be the author. (Section 201(b)). On the other hand, if the author is an independent contractor or freelancer – rather than an employee – ownership is retained by the individual creator, unless there is a contractual agreement to the contrary.

For participants in the gig economy, the Dynamex ruling could simply prompt media and software companies to hire fewer independent contractors, and instead only hire people as employees. Although the copyright implications of Dynamex are unknown, the decision underscores the need for employers and workers alike to ensure that any contract for services includes a carefully drafted intellectual property rights clause – especially for those in creative industries.

Lights, camera, data protection.

Lights, camera, data protection.

Cannes: movie stars, auteurs, glamour, the French Riviera, and… data privacy?

Before the cameras start rolling, a film production company will need to agree service contracts for cast and crew.  In honour of the Cannes Film Festival happening this week, let’s consider how data protection issues need to be addressed for an actor’s contract.

A standard Actor’s agreement will cover payment, travel and residence allowances, box office bonuses, and of course, intellectual property.  But if the production company intends to process a significant amount of personal data about the Actor – such as dates and locations of filming, and details of travel arrangements and accommodation –  the agreement should also contain a data protection clause.  Remember that “processing” is widely defined, and covers any activity involving personal data, including storing, sharing, or reading.

Related image
The Cannes 2018 poster, featuring an image from Jean-Luc Godard’s 1965 film “Pierrot le Fou.”

“The Actor agrees and hereby give her consent to the holding and processing of personal data relating to the Actor in any form, whether obtained or held in writing, electronically or otherwise, by the Producer.”

The above clause may be acceptable under the UK Data Protection Act 1998, but is problematic under the incoming General Data Protection Regulation (GDPR).

Consent. As worded above, the Actor is providing the Producer with blanket consent to process her personal data.  Under the GDPR, consent means “freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her” (Art. 4(11)).

Given that this is a contract between a prospective employee and her boss, there is an imbalance of power between the parties. Accordingly, the Actor’s consent statement is unlikely to be considered “freely given” as is required under the GDPR.  Furthermore, personal data processing should neither be disguised nor bundled with the provision of a contract (Art 7(4)).

Even in other contexts, it would be unwise to rely on the Actor’s consent for processing, as this can cause difficulties if consent is withdrawn at a later date.  It is therefore advisable to rely on another lawful basis.

Another lawful basis? “Lawful basis” is just another way of saying “reason to do something.” Consent is just one of the six lawful bases permitted (Art. 6 GDPR). As the conditions for consent are very strict and unlikely to be met in this scenario, the Producers should consider their other options:

  • Contract: Processing is necessary for a contract with the person. Employment contracts are certainly applicable in this instance: for example, the Producers must process the Actor’s bank details to pay her.
  • Legal obligation: Processing is necessary for the Producers to comply with the law. This could include their tax obligations for HMRC, or complying with money laundering regulations.
  • Legitimate interests: The Producers must process the data for their legitimate interests. This could include business purposes such as sending out publicity emails with the Actor’s name and contact details, posting her image on social media, and so on. This is the most flexible basis to rely upon, but requires the Producers to demonstrate (inter alia) that their objectives are not unreasonable, and do not harm the Actor’s human rights (Recital 47).
  • The other lawful bases of protecting vital interests and carrying out a public task are not applicable in our scenario, but worth noting for completeness.

To be GDPR compliant, the clause could be amended to something like:

The Producers will collect and process the Actor‘s personal data in accordance with the Privacy Notice annexed to this Agreement. The Actor will sign and date the Privacy Notice and return it to the Executive Producer within 10 days of signing this Agreement.

The purpose of the Policy Notice is to provide the ActorActor with the information she is entitled to receive as a data subject (Articles 13 and 14). The Privacy Notice, likely to take the form of a letter, will explain how the Producer obtains, uses, and retains the Actor’s personal data. It will also set out the relevant lawful bases for each type of processing, and explain how the Actor can exercise her rights (Articles 15 through 22 inclusive).

Of course, the work doesn’t end once the agreement is signed. The Producers will need to make sure anyone who handles personal data within their organisation understands the new requirements under the GDPR. Having clear policies is only part of the story: those policies will need to be followed.

It’s a common misconception that the GDPR is just about IT security and marketing emails filling up your inbox. In reality, the legislation will provide enhanced rights for data subjects, and it’s important to remember that employees are data subjects too.

The price of talent: new California law seeks to address gender pay gap

The price of talent: new California law seeks to address gender pay gap

“I knew I was being paid less and I still agreed to do American Hustle because the option comes down to do it, or don’t do it. So you just have to decide if it’s worth it for you. It doesn’t mean I liked it.” — Amy Adams

From January 2018, employers in California will be prohibited from asking job applicants about their previous pay.  Guidance for the new Labor Code 432.3 states “closing the wage gap starts with barring employers from asking questions about salary history, so that previous salary discrimination is not perpetuated.” If asked to do so, employers must also provide the “pay scale” for the position being filled. The Code does not prohibit applicants from volunteering their salary history, nor does it prohibit an employer from using that information to determine their offer.

How does this compare with equal pay laws in England? Before the Equal Pay Act 1970 and Sex Discrimination Act 1975, businesses did not hide the fact that men and women who performed the same job could be paid different wages, or that certain lower-paid jobs were explicitly reserved for women. The current legislation, the Equality Act 2010, states that men and women should receive equal pay for equal work, as prescribed by Article 157 of the Treaty on the Functioning of the European Union.

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