Fashion Model Class Action Case A Bellwether For Other Industries | Arent Renard
The New York County Supreme Court’s Commercial Division (Judge O. Peter Sherwood) recently granted the model plaintiffs class-action status in a long-standing dispute over s ‘They are employees under New York labor laws, not independent contractors. Shanklin et al. v. Wilhelmina Models, Wilhelmina International, Ltd., Next Management LLC, MC2, MC2 Model Management LLC and Talent Miami LLC, 2020 NY SlipOp. 31337 (U) (Sup.Ct. NYCty. 5/8/20).
Since New York’s Section 9 Class Action Law became law 45 years ago, courts have underused Section 9, largely denying certification of class actions. It was only recently that the state’s highest court pledged to allow it, encouraging appeal divisions and trial courts to take a more aggressive stance on class certifications, especially in the affairs of tenants, consumers and employees. [Borden v. 400 E. 55th St. Assoc. LP (2014)]. Now that COVID-19 is triggering the filing of numerous class actions across a wide range of industries, the Shanklin decision has important implications beyond the fashion industry.
The complainant category consists of models who, from 2007 to today, have contracted with the country’s leading modeling agencies for counseling, career management and modeling jobs. The first of three related class actions began in 2012, Raske v. Ford Models et al., Index n Â° 653619/2012. The models first demanded compensation for the alleged unauthorized uses and re-uses of their photographs. Their breach of contract allegations then turned into broader allegations that the agencies violated New York employment law. In essence, they allege that by requiring models to use the agency exclusively, and by controlling the time, manner and location of shoots and negotiations, vacations and medical appointments, and by examining the appearance of the models, the agencies employed the models as employees, not as independent contractors, so the models are entitled to receive an hourly wage, respectful of their hours, benefits and accounting reports, under the laws of the New York work. (Few modeling agencies got the initial complaint dismissed in the Raske class action, Ford Models among them, represented by Arent Fox).
After the models amended the complaint twice to add the labor law claims and filed two related class actions, pre-certification research began to determine whether the standards set out in section 9 for dealing with class actions were respected (that is to say, if the representatives and lawyers can adequately represent the group, if the collective action mechanism is superior to individual actions, if the group is large, if the claims of the appointed representatives are typical of those of the proposed group, if the group mechanism is superior to the alternative (cases classified individually, each being dealt with on its own merits). Before Shanklin, the relatively few collective certifications granted concerned consumer-type class actions (for example, disputing equipment rental deductions or telephone charges, for broken promises in solicitation documents or server claims for tips). Many cases have therefore been filed in federal court under Fed.R.Civ.P. 23 to end this failure of state courts to confer class action status.
The Court mainly focused on three statutory features – typicality (ie, whether the remaining claims presented problems common to all models regarding the respective degree of pervasive agency control over models and their deduction from suspected illegal expenses); adequacy of representation (whether the company representing the models was able and able to prepare the case, a factor on which the defendant modeling agencies did not dispute), and superiority (if the use of the collective action device was far superior to that of hundreds of models to file individual actions).
The agency’s defendants did not dispute the number requirement, and the defendant Next Management lost the argument that the class action scheme was not superior to the labor commissioner in charge of the lawsuits. The court ruled that since the facts regarding the breaches of contract (alleged unauthorized uses of photos of the models) were so individualized with respect to each model, the terms of the contract and in particular the damages, it could not award the group status with regard to these complaints.
Regarding the employment law claims, the Court granted a class action certification finding that all statutory branches had been met, so that the models under contract with Wilhelmina Models, Wilhelmina International Ltd. and Next Management LLC, respectively, since October 24, 2007 (13 years), represent the models against the three agency classes on employment law claims.
Before Shanklin, class certifications have been almost exclusively in the area of ââconsumer fraud (for example, disputing lowercase letters containing waivers of lease rights or obscure phone charges). Shanklin represents a departure from these cases and is likely to have repercussions beyond the immediate class action decision.
First, if a jury found out that modeling agencies exercised such a degree of control and oversight over hundreds of models in the class, including the manner, type and location of the models’ shots, the schedules of vacations and medical appointments, so they were agency employees, so 13 years of potential damages plus attorney fees under employment law could be very significant. This suggests that other service industries which employ independent contractors and retain such control may also be affected.
Second, Shanklin has practical consequences. The way modeling agencies negotiate contracts with models, their contract renewals and reuse of their photoshoots, even information regarding their compensation may change, possibly by including additional notice or approval clauses in contracts. types or business procedures to protect the models and the agency from further litigation. It’s also clear that class action waivers recently sanctioned by the U.S. Supreme Court are likely to become the norm if they haven’t already. Ultimately, Shanklin suggests that agencies and other service providers consider requiring independent contractors to recognize and relinquish their employee status when they contract or renew their contracts, again to avoid further litigation.
Third, New York State courts are showing affinity and greater acceptance of a greater variety of class actions than ever before in this post-COVID-19 era.