Carter v. Helmsley-Spear, Inc.
71 F.3d 77 (1995)
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Rule of Law:
A work of art is considered a 'work made for hire' under the Copyright Act, and is therefore excluded from protection under the Visual Artists Rights Act (VARA), if the artist is determined to be an employee under the common law of agency test rather than an independent contractor.
Facts:
- In December 1991, SIG Management Company (SIG), the manager for a building's lessee, hired three artists, John Carter, John Swing, and John Veronis (collectively 'the artists'), to create and install a large sculpture in the building's lobby.
- The agreement stipulated that the artists would work approximately 40 hours per week for a weekly salary and would perform other related services as assigned.
- The lessee (through SIG and its successors) paid the artists' payroll and social security taxes, provided them with employee benefits including life, health, and liability insurance, paid vacations, and contributed to unemployment and workers' compensation funds.
- The artists retained significant artistic freedom and control over the design and creation of the sculpture, which was a large, walk-through installation made from recycled materials.
- In addition to the main lobby installation, the lessee assigned the artists other art projects in different parts of the building, which they completed without additional compensation.
- On March 31, 1994, the lessee's lease was terminated, and the building was surrendered to its owner, 474431 Associates, managed by Helmsley-Spear, Inc.
- The new management team informed the artists they must cease their work and vacate the premises, and expressed their intent to remove the sculpture from the lobby.
Procedural Posture:
- John Carter, John Swing, and John Veronis sued Helmsley-Spear, Inc. and 474431 Associates in the U.S. District Court for the Southern District of New York, seeking to prevent the removal of their artwork.
- The district court granted the artists a temporary restraining order, followed by a preliminary injunction.
- Following a bench trial, the district court ruled in favor of the artists, granting a permanent injunction protecting the artwork for the artists' lifetimes, holding that the work was protected by VARA and was not a 'work made for hire.'
- The district court also dismissed the defendants' counterclaim for waste and the plaintiffs' claim for tortious interference.
- The defendants, Helmsley-Spear, Inc. and 474431 Associates, appealed the grant of the permanent injunction to the U.S. Court of Appeals for the Second Circuit.
- The artists cross-appealed the dismissal of their other claims.
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Issue:
Is a large-scale sculpture created by artists who receive a weekly salary, employee benefits, and can be assigned other tasks by the hiring party, considered a 'work made for hire' under the Copyright Act, thereby excluding it from the protections of the Visual Artists Rights Act (VARA)?
Opinions:
Majority - Cardamone, J.
Yes, the sculpture is a 'work made for hire' and is therefore excluded from VARA's protection. The court applied the multi-factor test from Community for Creative Non-Violence v. Reid to determine whether the artists were employees or independent contractors. Although factors such as the high skill required and the artists' creative freedom weighed in favor of independent contractor status, the court found that the balance of factors indicated an employment relationship. The court gave significant weight to the fact that the artists were paid a weekly salary, received extensive employee benefits (insurance, paid vacation), had their payroll taxes managed by the employer, and that the hiring party had the right to and did assign additional projects. Because these factors demonstrated an employment relationship, the sculpture was legally a 'work made for hire' as defined by the Copyright Act and was thus ineligible for the moral rights protections afforded by VARA.
Analysis:
This decision significantly clarifies the application of the 'work for hire' doctrine to the Visual Artists Rights Act, establishing that the traditional common law factors of employment can override an artist's creative control in the legal analysis. It creates a critical precedent for commissioned art, demonstrating that even creators of unique, monumental works may lose VARA's protections if their working relationship contains sufficient indicia of formal employment, such as salary and benefits. The ruling highlights a potential conflict for artists, who may be forced to choose between the financial security of an employment relationship and the moral rights protections available only to independent contractors. Consequently, this case underscores the importance for artists and patrons to meticulously structure their contractual agreements to reflect their intentions regarding ownership and moral rights.
