Motown Record Corp. v. Brockert
160 Cal.App.3d 123, 207 Cal. Rptr. 574, 1984 Cal. App. LEXIS 2526 (1984)
Rule of Law:
Under California Civil Code section 3423, subdivision Fifth, an exclusivity clause in a personal services contract cannot be enforced by injunction unless the contract itself, from the outset, guarantees the performer minimum compensation of not less than $6,000 per annum; an option clause allowing the employer to later elect to pay this minimum does not satisfy the statutory requirement.
Facts:
- In 1976, Tina Marie Brockert, known professionally as Teena Marie, then an unknown artist, entered into recording artist and songwriter contracts with Motown Record Corporation and Jobete Music Company, Inc., respectively.
- Each contract was for an initial one-year period and granted the companies six one-year options to renew, containing an exclusivity clause preventing Teena Marie from performing similar services for another employer during the contract term.
- The contracts further provided each company with an option, exercisable at any time, to pay Teena Marie "compensation at the rate of not less than $6,000 per annum."
- Between 1979 and 1980, Teena Marie recorded four successful albums for Motown, with her fourth album, 'It Must Be Magic,' achieving gold record status, and also wrote songs for Jobete.
- In May 1982, Teena Marie informed Motown and Jobete she would no longer perform under the contracts and provided written notice of rescission.
- In November 1982, Teena Marie informed Motown and Jobete that she had signed a recording contract with another company and intended to commence performing for that company later in the month.
Procedural Posture:
- Motown Record Corporation and Jobete Music Company, Inc. sued Teena Marie (Tina Marie Brockert) in Los Angeles Superior Court (trial court) in August 1982 for breach of contract, injunctive, and declaratory relief.
- In September 1982, Motown and Jobete exercised their option clauses, advising Teena Marie they had elected to pay her no less than $6,000 per year.
- Motown and Jobete subsequently sought a preliminary injunction under the exclusivity clauses of their contracts to prevent Teena Marie from performing services for another employer.
- The trial court granted a preliminary injunction, restraining Teena Marie from performing as a singer or songwriter for anyone other than Motown and Jobete until April 9, 1983.
- Teena Marie appealed the preliminary injunction order to the California Court of Appeal.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a clause in a personal services contract, which grants the employer the option to pay the employee a minimum of $6,000 per year, satisfy the statutory minimum compensation requirement necessary to obtain an injunction preventing the employee from performing services for another employer?
Opinions:
Majority - Johnson, Acting P.J.
No, a clause in a personal services contract giving the employer the option to pay the employee a minimum of $6,000 a year does not satisfy the statutory minimum compensation requirement for an injunction restraining breach of the contract. The court interpreted Civil Code section 3423, subdivision Fifth, which limits injunctions for personal services contracts to those "where the minimum compensation for such service is at the rate of not less than six thousand dollars per annum." This language requires the contract itself to guarantee minimum compensation from the outset, not merely provide a potential for it through a discretionary option. Relying on Foxx v. Williams (1966) and distinguishing MCA Records Inc. v. Newton-John (1979), the court stated that an artist must be genuinely guaranteed the statutory minimum, not merely have a contingency or potential for earning it, making the option clause analogous to the contingent payment rejected in Foxx. The court rejected arguments that exercising the option created a new, enforceable contract, finding no new consideration for such a modification and citing Warner Bros. Pictures Inc. v. Brodel (1948) which held the contract to perform services was made when the option contract was made. The court emphasized that the legislative intent behind the $6,000 minimum (a substantial sum in 1919, equivalent to over $100,000 in 1982) was to limit injunctive relief to performers of "star quality" or distinction, consistent with the historical application of such injunctions in cases like Lumley v. Wagner. Allowing an option clause would nullify this intent, enabling companies to bind unknowns without initial financial guarantees and then assert control once the artist achieves success. Furthermore, the court found that the option clause violates the concept of fundamental fairness embodied in section 3423, which aims to balance equities and prevent economic coercion. The $6,000 requirement serves as a counterweight; an option clause allows companies to avoid upfront payment while retaining coercive power, only exercising the option when an artist threatens to breach, thereby rendering the "guarantee" meaningless.
Analysis:
This case significantly clarifies the enforceability of exclusivity clauses in California personal services contracts, particularly within the entertainment industry. It reinforces that the statutory minimum compensation requirement ($6,000/year) must be a genuine, guaranteed provision within the contract from its inception, not a discretionary option for the employer to invoke only when an artist becomes successful or threatens to breach. This ruling protects artists, especially those early in their careers, from being unfairly tied to contracts without guaranteed earnings, preventing employers from using the threat of injunction as a coercive tool. Future contracts will likely be scrutinized to ensure that minimum compensation provisions are genuine contractual guarantees rather than opportunistic options, promoting a more equitable bargaining position for artists.
