Thursday, March 3, 2016
Music Business/Law Tips - "7 Year Statute"
Recently, Rita Ora filed a lawsuit against her label Roc Nation to get out of her record deal based on the so called "7 Year Statute". In California, this Labor Code stipulates a court cannot enforce a personal service contract after seven calendar years from when the deal began. Ora signed the contract in 2008. Her underlying gripe is that she claims the label has neglected and failed to properly promote her. Of course, Roc Nation disputes this and argues they have spent millions on branding her. The problem with invoking this statute is that there a lack of solid case precedents in music. Although Olivia Newton-John successfully sued MCA Records for violating the law in the late Seventies, thereafter the recording industry lobbied the California legislature to establish rules allowing labels to sue artists for "lost profits" if they didn't fulfill album commitments or other components of their contract, so such a claim can backfire. As such, most record industry disputes involving the "seven-year rule" have ended in a settlement or a renegotiated deal. Well have to stay tuned to see what happens. Ben McLane Esq benmclane.com