Bill Text: CA AB2926 | 2021-2022 | Regular Session | Introduced

California Assembly Bill 2926 (Prior Session Legislation)

Introduced

Bill Title: Employee obligations: exclusivity options.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-03-31 - From committee: Do pass and re-refer to Com. on A.,E.,S.,T., & I.M. (Ayes 4. Noes 2.) (March 30). Re-referred to Com. on A.,E.,S.,T., & I.M. [AB2926 Detail]

Download: California-2021-AB2926-Introduced.html

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 2926

Introduced by Assembly Member Kalra

February 18, 2022

An act to amend Section 2855 of the Labor Code, relating to employment.

LEGISLATIVE COUNSEL'S DIGEST

AB 2926, as introduced, Kalra. Employee obligations: exclusivity options.

Existing law, except as specified, prohibits enforcement of a personal service contract beyond 7 years from the commencement of service under the contract. Under existing law, an employee who is a party to a contract to render personal services in the production of specified phonorecords is prohibited from invoking this provision without first giving written notice to the employer that the employee, from and after a specified date, will no longer render service under the contract by reason of the above provision. Existing law specifies that a party to a contract to render personal services in the production of specified phonorecords may still pursue an action for certain damages.

This bill would eliminate that provision requiring an employee who is a party to a contract to render personal services in the production of specified phonorecords to give written notice and would also repeal the provisions related to damages.

This bill would instead prohibit a contract for the exclusive personal services of a music talent, as defined, from containing a term that includes option periods that extend more than 9 months after the initial commercial release of the applicable music product. The bill would authorize a music talent, if their option has not been formally exercised within that time period, to terminate at any time their personal services agreement by sending notice to the contracting party. The bill, if a music talent willingly renegotiates an existing recording contract with a record company, would deem a new 7-year period to commence on the execution date of such renegotiated recording contract, if it meets prescribed criteria.

This bill, except under prescribed circumstances, would prohibit a contract for the personal or professional services of an employee from prohibiting an employee from working for multiple employers.

This bill would prohibit the waiver of any of its provisions in an individual contract negotiation, a collective bargaining agreement, or other agreement. The bill would provide that it applies to existing and future recording agreements and employment contracts. The bill would provide that it voids any provision in a contract that would deprive an employee or recording artist of its protections.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 2855 of the Labor Code is amended to read:

2855.
~~(a)Except~~

2855.

(a) For purposes of this section:

(1) “Music product” means a phonorecord or sound recording, as defined in Section 101 of Title 17 of the United States Code.

(2) “Music talent” means a person engaged in the creation of music product.

(3) “Separate royalty account” means a new royalty account which is in no way connected or cross-collateralized with the music talent’s existing royalty account.

(b) Except as otherwise provided in subdivision ~~(b),~~ (d), a contract to render personal service, other than a contract of apprenticeship as provided in Chapter 4 (commencing with Section 3070), ~~may~~ shall not be enforced against the employee beyond seven years from the commencement of service under it. Any contract, otherwise valid, to perform or render service of a special, unique, unusual, extraordinary, or intellectual character, which gives it peculiar value and the loss of which cannot be reasonably or adequately compensated in damages in an action at law, may nevertheless be enforced against the person contracting to render the service, for a term not to exceed seven years from the commencement of service under ~~it.~~ the contract. If the employee voluntarily continues to serve under it the contract beyond that time, the contract may be referred to as affording a presumptive measure of the compensation.

~~(b)Notwithstanding subdivision (a):~~
(1)Any employee who is a party to a contract to render personal service in the production of phonorecords in which sounds are first fixed, as defined in Section 101 of Title 17 of the United States Code, may not invoke the provisions of subdivision (a) without first giving written notice to the employer in accordance with Section 1020 of the Code of Civil Procedure, specifying that the employee from and after a future date certain specified in the notice will no longer render service under the contract by reason of subdivision (a).
(2)Any party to a contract described in paragraph (1) shall have the right to recover damages for a breach of the contract occurring during its term in an action commenced during or after its term, but within the applicable period prescribed by law.
(3)If a party to a contract described in paragraph (1) is, or could contractually be, required to render personal service in the production of a specified quantity of the phonorecords and fails to render all of the required service prior to the date specified in the notice provided in paragraph (1), the party damaged by the failure shall have the right to recover damages for each phonorecord as to which that party has failed to render service in an action that, notwithstanding paragraph (2), shall be commenced within 45 days after the date specified in the notice.
(c) (1) A contract for the exclusive personal services of a music talent shall not contain a term that includes option periods that extend more than nine months after the initial commercial release of the applicable music product.
(2) If a music talent’s option has not been formally exercised within the time period specified in paragraph (1), a music talent, at any time, may terminate their personal services agreement by sending notice to the contracting party.
(d) If a music talent willingly renegotiates an existing recording contract with a record company, a new seven year period, as described in subdivision (b), shall be deemed to commence on the execution date of such renegotiated recording contract, if the renegotiated contract meets the following criteria:
(1) The renegotiated contract provides for a separate royalty account for the music product delivered by the music talent during the term of the renegotiated contract.
(2) The renegotiated contract, both financial and otherwise, provides a material improvement from the existing recording contract and the renegotiated terms are consistent with, or better than, the terms applicable to artists of similar commercial success or industry market value.
(3) The renegotiated contract does not add more than one additional album to the delivery obligation of the existing contract before the renegotiation.
(e) Notwithstanding any other provision of law, a contract for the personal or professional services of an employee shall not prohibit an employee from working for multiple employers, except as follows:
(1) (A) The contract may prohibit working for a different employer where the employment would pose a direct conflict for the existing employer or materially interfere with the employee’s performance obligations to the existing employer.
(B) Employment as an artist in connection with the production of motion pictures, irrespective of medium, radio programs, television, podcasts, and other audiovisual entertainment content, shall not be a direct conflict unless the employer can show that the employment would pose a direct scheduling conflict or the employer can show that it would materially interfere with the employer’s business.
(2) The contract may require the employee to disclose to the existing employer any additional employment, provided the existing employer shall not take any adverse action against the employee based solely on the employee having taken additional employment.
(3) The contract may include protections for trade secrets and confidential business information and nothing in this section shall supersede any rights the employer may have under any other section with respect thereto.
(f) No part of this section may be waived in an individual contract negotiation, a collective bargaining agreement, or other agreement.
(g) This section shall apply to existing and future recording agreements and employment contracts.
(h) Any provision in a contract that would deprive an employee or recording artist of the protections of this section shall be void.