Many of our country’s record labels are based in the state of California, which is of no surprise since California is where people travel to make their dreams come true. However, many are not aware that California has specific labor laws that establish a seven-year rule for contracts. In 1944, the actress Olivia de Havilland sued Warner Brothers after they kept extending her contract even though they suspended her when she rejected roles they gave her. The California Court of Appeals held that de Havilland did not have to perform under the contract after seven years had passed. This case led to the California Labor Code §2855 being established.
The California Labor Code §2855 generated a huge power shift in the entertainment industry because studios no longer had the power to force performers to be bound by terms they were unhappy with. This resulted in less contract disagreements, which led to more time being spent on what mattered: the creative innovation of an artist. The problem is that many musicians have had a hard time applying this labor law to their art form. In the late 1970s, the California legislature allowed record companies to sue for lost profits when an artist did not accomplish all of their commitments under their contracts. This has given the recording industry back their power and resulted in settlements or renegotiations for the artist.
Rita Ora is a recording artist that signed to Jay Z’s record label, Roc Nation, in 2008 when she was just 18. Her first album had huge hits in both the United States and the UK and she went on to be a coach on The Voice UK. While she has had wild success due to her first album, she is claiming that she has not been allowed to release any other albums under Roc Nation. In her suit, she states that when she first signed with the label, they were very involved with her and her success. Now, she does not have a relationship with anyone in the company and wants to leave since they are no longer promoting her as an artist. She has funded her own performances and Roc Nation has taken 20 percent of her profits. The seven years of her contract has gone by and she wants to use California Labor Laws to rid her of her contract.
Roc Nation has returned with a countersuit claiming breach of contract. They state that the contract required five albums and Ora did not deliver. Roc Nation countersued in the state of New York where the seven-year rule does not exist. Roc Nation acknowledges the seven-year rule under California Labor Laws, but believes that they are entitled to the money they spent on promoting Rita. It is possible that Jay-Z may settle and let Ora out of her contract.
While it still unclear whether either of the two suits will settle, Ora’s case brings up an important issue in regards to the entertainment industry. It could determine whether the seven-year rule should be applied to recording artists as well as actors. Roc Nation’s countersuit will allow the New York courts to consider whether California’s seven-year rule should be extended to another state. Whether this case goes forward or not, it could change the way that recording artists are seen in the eyes of their employers.