Ripoff Reminds Union to Get Money First

Volume CIII, No. 1January, 2003

Recent recording dates in mid-November that were cancelled without sufficient notice stiffed 45 musicians – including instrumentalists, arrangers and copyists – for a total of $40,000, including benefits. The loss reinforced 802’s longstanding policy to get an advance deposit from new signatories.

At first blush, Nanette Norwood seemed to do the right thing. She wanted to make a demo CD promoting herself as a lounge singer. So she signed off on the AFM’s Sound Recording agreement. She hired a producer/arranger who in turn hired a well-known union contractor to find musicians. The payroll company would be Entertainment Partners, a reputable payroll company.

But the deal went sour fast when the contractor and producer ended up canceling the gig altogether, on three-days’ notice, because Norwood in fact had no means of paying for the engagement. (The Sound Recording agreement requires a week’s notice of all cancellations.)

Not only did the producer, contractor and 45 musicians go unpaid but Manhattan Center never saw any money for time or space rental.

When 802 went after the employer, the union discovered that she had no assets from which to collect.

The events drove home the reasons that the union typically requires a deposit when all new signatories sign for a recording project. Normally, the union will do a credit check or bank discovery when a new individual or company approaches 802 wanting to do a union project. If the individual is backed by a major label or there is a clear money trail behind the project the union is often satisfied that money will come through.

However, for independent production companies, single individuals or nonunion labels, 802’s policy is to require a bond for the engagement, to cover all session wages, music preparation charges, non-wage payments (such as cartage) and all benefits, including health and pension, in advance of the engagement.

The bond may be satisfied with prepayment for the project through Legit 802, the union’s payroll service. Or, if the employer wants to use his or her own payroll company, the union lets the payroll company know that this is an unknown employer and that full prepayment is necessary. This is similar to the strategy that 802 takes with Broadway shows, where the last two weeks of a show are required as prepayment.

In the case of Norwood, she presented an urgent last-minute request. Normally, such urgency is not enough to get past the union’s screening process for new signatories. But since she had hired one of the city’s largest performance venues, a big-name producer, a well-known contractor and a reputable payroll company, 802 gave her the green light.

“In a contracting economy, it’s clear that the union has to step up its vigilance of new signatories,” said Jay Schaffner, Assistant Supervisor of National Contracts. “Even bright prospects must be looked at carefully.”

Schaffner said the union could spend thousands of dollars and years of time litigating Norwood to get a judgement. He’s recommending that a more cost-effective and quicker approach is for each musician to file a separate small claims court case against Norwood. Union reps will accompany all musicians to court. Most likely, each will win a default judgement that will ultimately allow a court marshal to attempt collection from Norwood and any assets that she may have hidden.

And Schaffner said that if you are called in the future to do a recording date, even if the date is covered by an AFM signatory, it’s best to check with the union. New signatories can be a lot less than meets the eye.