‘COMICS UNLEASHED’: Looking for a Pay Day in Court

comics_unleashed_photo1Comics Unleashed Productions is living up to its name these days in the courtroom thanks to some comedians who have trouble with the way it does business. The production company is one of the entities under the umbrella of comedian Byron Allen’s company Entertainment Studios (ES), which produces shows for syndication and digital distribution. And from the look of things both sides have a fair amount of stuff to sort out before this thing blows over. But, first, here’s the story:

In December last year, in Los Angeles Superior Court, some two former employees of the company filed a class action lawsuit against Allen himself, Entertainment Studios and business entities affiliated with them, alleging breach of contract, unfair business practices and failure to pay them wages that were due to them. The plaintiffs, Bernadette Pauley and Thomas Clark, both comedians, claimed that they performed work on the syndicated show Comics.TV under a contract with Comics Unleashed Productions, and that they were not paid for their work. The plaintiffs also claim that they were owed ‘residuals’ as well as reimbursement for work-related expenses.

Before talking about the plaintiffs’ chances of winning the lawsuit, the first question to be answered here is whether this case can even survive as a class action. The typical class action lawsuit usually involves folks who have been injured in a similar or common fashion by a similar or common cause and are seeking a similar or common remedy. One good example here is the case of folks who have been injured by a bad product manufactured by a company, say, a defective drug. Or perhaps folks who have been injured in an accident owing to a defective gas pedal in an automobile.

However, our situation here is not your typical class action scenario: Pauley claims in the lawsuit that she hosted about four episodes of Comics.TV and that Clark appeared as a stand-up comedian in at least one of the episodes of the show. In all, the lawsuit claims that there are about 112 comics and actors who worked on various episodes of the show. Well, it is also safe to assume that these plaintiffs are asking for different kinds of payments from Allen’s side: for example, each person on the plaintiffs’ side likely has a different basis or ground for claiming to be entitled to either the salary or the residual payments or the reimbursements that he or she is claiming. So, given that the plaintiffs in the Pauley/Clark lawsuit worked on the Comics.TV show at different times and in different roles, we are actually dealing with a number of different issues or claims rather than with a similar or common cause of a similar or common injury or claim.

Long story short, all these factors will seriously increase the difficulty of managing the case as a class action. In the way class actions normally work, the plaintiffs in this case would have an easier time if they were hired at the same time or had performed the same kind of work and yet ended up not getting paid. This is because the whole point of having class actions is to make it easier for folks in the same boat to pursue the same kind of relief or remedy. Class actions also help the courts to save both time and tax payers’ money by avoiding having to deal with the same kinds of claims over and over again when they could be done in just one shot.

So, it turns out that the plaintiffs Pauley and Clark won’t have the easiest time mounting this case as a class action after all. But win or lose on the class action front, the plaintiffs are still very much in the game since they can always re-file their cases separately as individual claimants. Plus, their breach of contract claim is an entirely separate issue from the class action itself. Fortunately for the plaintiffs, they have a written agreement with their former employers, as they claim. Still, as with all written contracts, it is the ‘terms’ of the contract that make all the difference in the end.

Concerning the claims in the present lawsuit, it will be most helpful to the comedian-plaintiffs if their contract is written not only in clear language but also in as much detail as possible. For instance, exactly what does the agreement say about salaries, residuals, and reimbursement of work-related expenses? The more clearly the contract is written, the less they’ll have to deal with the hassle of lawyers bending and spinning the words used in the agreement to benefit their partisan points of view. Such a situation is never a good thing for somebody who is owed money or who is trying to enforce some right or benefit given to him or her under a contract. So, the clearer the agreement is on these disputed matters, the better will be the chance that the court will agree with the plaintiffs that the monies are indeed owed to them.

Then again, it may be that the agreement is more complicated than that, especially with matters like the right of the plaintiffs to collect residual payments or reimbursement for work-related expenses. For instance, if as sometimes happens, the agreement contains a couple of things that must be done first before payment can be made (such things are called ‘conditions precedents’), then the person being sued could start a fight on another front by claiming that the conditions precedents have not yet been fulfilled.

Speaking of work-related expenses, the plaintiffs are claiming reimbursement for things like air-travel, car rentals, wardrobe, and gasoline expenses. Usually, these kinds of expenses are required to be reimbursed so long as they are not already included in the employees’ regular compensation. Also, in situations where the staffers use their own phones or cars on their job or lay out their own monies for training or educational materials, they are usually reimbursed for them. But contracts aside, the laws of most states protect the employees’ right to reimbursement of these expenses anyway. In California, where Allen does business, the labor code protects this right even more strongly than in many other states: in that state, once the employee is entitled to reimbursement, it is difficult to see how an employer can avoid paying it, even if the employee makes his claim rather late or miscalculates the amount of the claim. Even where he has already agreed to waive the claim, he can still turn around and collect it.

Yet, getting reimbursement money in these situations is not automatic. For instance, as already noted, if the expenses are already included in the staffers’ compensation, then it cannot be claimed separately. Also, it may be important to see how Allen’s side classified folks like Pauley and Clark in the course of their operations. If folks like the plaintiffs were considered as ‘independent contractors’ rather than as employees, then they would not have the right to reimbursement of work-related expenses. Unlike an employee, an independent contractor does his job as required under the contract but is not subject to the control and supervision of the person who hires him when it comes to the way and manner in which he performs the work. So, because an independent contractor works for himself and decides on his expenses all by himself, the question of the reimbursement of his work expenses usually does not arise.

With respect to the reimbursement claim in this case, if there is a dispute as to whether Pauley and Clark were regarded as independent contractors during their work for Comics.TV, the question can be answered by simply looking at the terms of their written agreement. And if it is not clear from the agreement itself, then one can look at the way the parties either worked with each other or treated each other during the time the plaintiffs worked on the show to see if they acted as though they were independent contractors.

There is one more thing in this case: Pauley and Clark reportedly claim that they were told by their union and their agents that they would be receiving residual payments from Allen’s side. Well, if the agreement they signed with Allen’s company does not provide for residual payments, then it won’t help that their handlers and associates promised them they would receive such monies. That just won’t cut it, unless it emerges that their union or their agents had signed a separate agreement with Allen’s side in which the plaintiffs were given the status of ‘third party beneficiaries’ with respect to residual payments.

A third party beneficiary is an outsider to a contract who is given a benefit by the parties making the contract. Because such an outsider has been given some right or interest under the contract, he can actually file a lawsuit to claim the benefit he has been given under the contract even though he was not one of the parties who had made the contract. The typical example here is the beneficiary of a life insurance policy. In our case here, Pauley and Clark can sue for residual payments if they can somehow qualify as third party beneficiaries, assuming, of course, that there is a contract between their union and agents and Allen’s side.

In the end, this case will go forward either as a class action or as a regular breach of contract action being pursued by separate plaintiffs. Yet, because it has been filed as a class action, the outcome of this case will be watched by folks other than just the parties involved. At the minimum, one can imagine that the producers of the many successful comedy and entertainment shows on TV who enjoy big production budgets will be interested to see how things shake out here. What usually happens in real life is that when going up against such big money TV shows, aggrieved staffers would much rather do such heavy lifting in the form of a class action than as individuals. One big reason here is that class action folks are often in a great position to attract lawyers who are willing to represent them on a contingency basis, especially if the money numbers make sense to lawyers.

In any event, regardless of how things move forward here, given that there is a written agreement between the parties, if the case doesn’t settle before the trial, the question of who wins or loses will depend on what the actual terms of the contract are. As always, in situations like this, the devil is in the details.

Please stay tuned for my upcoming book “Comedy Under Attack…” Coming out soon!

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