'Unlicensed Agent' Defense Won't Stop Suit By Manager

The New York Supreme Court, New York County, denied a motion to dismiss a complaint by a personal manager who seeks unpaid commissions from artists he managed. Washington v. Escobar, 103027/09. The defendants Nuttin But Stringz tried to block the suit by insisting that manager James Washington had acted as an unlicensed “theatrical employment agency” in violation of N.Y. General Business Law (GBL) '172.

The successful Nuttin But Stringz duo of Damien and Tourie Escobar were discovered by Washington while the artists were performing in a New York City subway station. Washington signed them to a three-year management deal in 2006 that the Escobars terminated in 2008. Washington then filed suit for $1 million alleging, among other things, breach of contract and intend to defraud.

“Theatrical employment agency” is defined in GBL '171(8) as “any person … who procures or attempts to procure employment or engagements for circus, vaudeville, the variety field, the legitimate theater, motion pictures, radio, television, phonograph recordings, transcriptions, opera, concert, ballet, modeling or other entertainments or exhibitions or performances, but such term does not include the business of managing such entertainments, exhibitions or performances, or the artists or attractions constituting the same, where such business only incidentally involves the seeking of employment therefor.” (Emphasis added.)

In response to the Escobars' motion to dismiss, Washington argued that language in the management agreement stating he was “to counsel and advise Artist in all matters relating to Artist's professional career” and to “further develop Artist's career in all branches of the entertainment industry” allowed him to negotiate with booking agents and other employing entities on his clients' behalf. For instance, Washington pointed to a spot he obtained for Nuttin But Stringz on the TV series America's Got Talent to increase the artists' national exposure as being “incidental” his overall role as manager.

New York County Supreme Court Justice Carol Robinson Edmead noted: “Contrary to defendants' arguments, the allegations of plaintiff's [c]omplaint do not indicate, at this juncture, that plaintiff operated as a 'theatrical employment agency' within the meaning of GBL '171(8), so as to require an allegation that plaintiff has an employment license pursuant to GBL '172.”

Edmead continued that “the [c]omplaint indicates that defendants also scheduled their own performances without informing plaintiff … (Complaint, ' '33-35). Therefore … defendants allegedly did not solely rely on plaintiff to find employment for them, which indicates that the employment secured by plaintiff for defendants was only incidental to plaintiff's management duties.

“Further, that the plaintiff alleges that he acted as 'a negotiator' on behalf of defendants, does not negate the allegation that he was defendants' manager. ' [P]laintiff alleges that he was authorized 'to engage' employment agents on defendants' behalf. ' Here, the Agreement explicitly states that it is a contract for management and that plaintiff is 'not an employment agency' (Agreement, '3). The Agreement also makes clear that plaintiff 'has not promised to procure employment or engagements for Artist, and shall not be obligated to do so.'”