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Will The FAIR Act Be Back Next Year? Proponents Say Yes

The bill, which failed in the California Senate Judiciary Committee on June 28, would repeal a 1987 amendment to the state's "Seven-Year Statute."

After the Free Artists From Industry Restrictions (FAIR) Act failed to garner enough votes on June 28 to move out of the California Senate’s Judiciary committee, proponents of the bill are already strategizing in preparation for Sacramento’s 2023 legislative session.

While the next term doesn’t start for six months and there are November’s midterm elections to get through first, artist representatives say they plan to reintroduce the FAIR Act in the California Assembly. They feel, despite the bill not advancing three times in the past 18 months, that they are making strides toward bringing more legislators to their side.

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The bill received four votes on June 28, with one senator voting no and six of the 11 committee members abstaining, leaving it two votes short of the majority needed to move forward. A representative for the Music Artists Coalition, one of the bill’s proponents, says they believe they can build on the yes votes should they reintroduce legislation, adding that in the past week they have received unsolicited support from “both the Senate and Assembly with people who have come out of the woodwork,” as they look ahead to the next round. “We got further faster than anybody before. We got four people to stand with us, [the opposition] got one.”

Also on board to continue the fight is Assembly member Ash Kalra, D-San Jose, who sponsored the latest bill with Eduardo Garcia, D-Coachella. “I feel confident we are going to make it happen. It’s just going to take persistence and obviously more time,” says Kalra. “I learned that we need to counter the arguments from the industry earlier on.”

Opponents say it is time to let the bill die. “This flawed proposal has been rejected repeatedly for decades and for good reason – it is an unfair reverse wealth transfer from working artists to wealthy managers and lawyers that violates the most basic principles of contract law and common sense,” the California Music Coalition responded in a statement to Billboard. “The Legislature simply saw this bad idea for what it is and rejected it in order to protect working artists and California’s music economy…. It’s long past time for the sponsors of this bill to move on and stop wasting lawmakers’ time.”

AB Bill 983,  also known as the FAIR Act, was the latest effort to repeal a 1987 amendment to California’s “Seven-Year Statute” (a.k.a. California Labor Code Section 2855). That amendment allows record labels to sue artists for damages (including potential lost revenue) if they leave after seven years but before delivering the required number of albums in their contract. The Seven-Year Statute, which limits personal services contracts for state residents to seven years, was enacted in 1944 following the judgment in actress Olivia de Havilland’s lawsuit against Warner Bros. Pictures.

Each side argues that elements of their very livelihood are at stake. The CA Fair Act Coalition, a collective that includes the Music Artists Coalition [MAC], the Black Music Action Coalition [BMAC], Future of Music Coalition, Songwriters of North America and SAG-AFTRA, argues the 1987 amendment makes artists the only California residents who are not allowed to leave a contract after seven years without penalty and is, therefore, unfair. “The [current] law memorializes the imbalance of power,” says the MAC representative. “The Seven-Year Statute as it exists is not designed to compensate the label, it is designed to keep artists from using the statute.”

In addition to the California Music Coalition, the Recording Industry Association of America (RIAA), which represents the music labels including the three major record companies, also opposes the bill. They argue that allowing artists to leave after seven years without compensating labels for potential lost revenues on undelivered albums would lead to fewer artists being signed because labels will be more risk averse if they knew artists could leave without fulfilling their contract. (Additionally, recording contracts call for a number of deliverable albums, as opposed to a specific time frame. )

Though both sides say it’s impossible to calculate just how many artists are affected by the 1987 exemption, passage of the FAIR Act would give the biggest boost to artists who are on a label for seven years and presumably achieved at least some success during that time but have not done well enough to renegotiate more favorable terms in exchange for adding more albums to their contract. (Big labels generally drop artists who aren’t profitable by seven years). If this law makes it easier for artists to leave after seven years, it will give them more leverage in these negotiations, which makes for a more equitable playing field, proponents say.

The battle comes at a time when the U.S. recorded music industry, flush with streaming revenue, generated a record $14.99 billion in 2021, according to the RIAA.

The proponents’ undiminished zeal comes despite the uphill climb the FAIR act has faced as its many iterations over the past 20 years have fizzled out in a series of fits and starts.

June 28’s vote marks the fourth time the bill — in its various forms — has failed to pass or move forward (though it has passed out of both Assembly and Senate Labor committees before and has had the powerful backing of the California Labor Federation, in addition to SAG-AFTRA). Kalra and Garcia re-introduced the current iteration of AB 983 in May into the California Senate via a Gut & Amend bill.

Kalra made the move after a previous version, then known as AB 2926, was pulled one day prior to a hearing before the Assembly’s Arts committee in April after the sponsors decided to reintroduce it as two bills, pulling a section that dealt with actors out of the FAIR Act and into separate legislation.

That bill built on AB 1385, which was introduced by former Assembly member Lorena Gonzalez, D-San Diego, in March 2021, but she pulled the bill before it ever came before any committees in December, when she left office to become head of the California Labor Federation. Gonzalez took up the cause 20 years after a number of artists, including Don Henley and Courtney Love and managers such as Irving Azoff led a failed effort to repeal in 2001.

Proponents point to other significant legislation, such as 2018’s Music Modernization Act, which addresses royalty payments in the digital era, that took years and several revisions to pass as a sign that their perseverance will pay off. “Although we didn’t get the votes on record that we anticipated, the energy moving into ’23 is like we’re on fire,” a representative of the BMAC tells Billboard. “We’re closer than ever to bringing true equity to artists…. So for us, if it took a year or a year and a half or two years for us to rewrite the wrongs that have been done to the creative community for the past 30 years, then that’s time well spent.”

Proponents went into the June 28 hearing believing they had the necessary six votes to proceed, but as the day’s session dragged on for 12 hours as the committee heard more than 60 bills, the opponents were able to convince key members of the committee to move from yes votes to abstaining before the final votes were called.

Part of the opposition’s ability to defeat the bill on June 28 was their greater fire power: they had four lobbyists working the legislators compared to one lobbyist advocating for the proponents.

“I don’t know if that’s necessarily the difference maker,” Kalra says of the number of lobbyists, though he adds, “there’s no doubt that it does have influence, especially during crunch time, when you have more feet on the ground. But honestly, I also believe that we had the votes. But going forward, we have to get enough of the commitments ahead of time, so that no matter what [the opposition does] at the 11th hour, we’ll be confident that we’ll get the bill moving forward.”

The representative for MAC, an advocacy group to protect artists’ rights founded in 2019 by artists Henley, Maren Morris, Anderson .Paak and Dave Matthews, and managers Azoff, Coran Capshaw and John Silva, among others, says “we’ve got to figure out” if the artists’ collective should add more lobbyists to expand its Sacramento footprint. However, they note that other than SAG-AFTRA, the CA Fair Act Coalition is made up of volunteer organizations, whose member artists and managers fund their efforts through individual donations, and, therefore, they will likely always be outspent by the opposition, which is funded by the labels.

“[Our opponents] have the muscle. They have more money. We’re never going to have the money that they have,” says the MAC representative. “But that shouldn’t rule the day. As long as the artists want to keep fighting this and feel passionate about it. I think we just have to get the truth out… We’re in the process of regrouping with all of our supporters and that will determine the specificity around those next steps.” The plan also includes enlisting more artists — Lauryn Hill, Diplo and Aloe Blacc have all voiced support via social media for the FAIR Act — to help continue the conversation in the creative community.

Before any serious discussions about how to proceed take place, both sides have to see how the composition of the Assembly and Senate changes during November’s mid-term election. All 80 seats in the Assembly are up for election every two years, with Assembly members subject to 12-year term limits. Half of the 40 senate seats come up for election every two years. Senators serve for four years and also are limited to 12 years’ total time.

Both Kalra and Garcia are likely to win re-election and four senators who have expressed support are either in safe seats or in terms that last through 2024. Bob Wieckowski, the one senator to vote no on June 28, will term out this year.

As they look ahead, FAIR Act proponents say their strategy remains the same, but they may rely less on trying to find areas of compromise: If it had passed, the latest version of the bill included artists paying back labels 120% of any advances collected on undelivered albums—a “drop in the bucket” toward making the labels whole for potential lost revenues, according to the opponents.

Instead, feeling meaningful compromise may be out of reach, the proponents will focus on the merits of the bill. “Looking into the future, we just need to push on the principles and values that we hold knowing that musicians need a fair shake,” Kalra says. “We have to be hopeful the industry will come on board, but not let them run out the clock, like they did this year… Ultimately, the job of policymakers is not to slant these contracts in favor of one side or the other, but to actually create an even playing field. And that’s really all I want to do.”