Halloween screenwriter exercises his termination rights
Once again shows the importance between independent contractor and employee
In a not so spooky ruling for creators, the U.S. Court of Appeals in Horror Inc. v. Miller, Case No. 18-3123 (2d Cir. Sept. 30, 2021) ruled the screenwriter of famous horror film Halloween was an independent contractor entitled to terminate the prior transfer of the screenplay. This is an important reminder to creators how important the difference between being an independent contractor and an employee is for potentially gaining ownership back of your works.
Termination Rights Background
For those who don’t know, when an author of a copyright transfers the ownership to another party, the author can terminate that transfer after thirty-five years if certain notice provisions are exercised. This termination can be exercised regardless of what the contract said when the transfer first occurred, as it is a federal statutory right under the U.S. Copyright Act (a quick aside, there are many exceptions and technicalities that fall under this general statement so please seek an entertainment attorney for guidance in this type of matter!).
However, if the creator is deemed a “work made for hire” of an employer (i.e. an employee), then the employer is deemed the author of the work. Thus, the creator can’t terminate the transfer of ownership because the transfer technically never happened. As an example, if I am one of the writer’s on the show Sopranos, I am working as an employee for HBO (or whoever might own the show). I am not transferring ownership to my contributions to HBO.
The courts apply a test first laid out by the Supreme Court that, coincidentally, is not related to labor law nor exclusively based upon whether you are an employee for tax purposes. Instead, it is a multi-factor test looking at the factual circumstances looking at the relationship between the two parties. I will not go into the details of the factors in this article, but the majority of factors address the control of the alleged employer over the creator.
In this case, the trial court ruled the writer was an independent contractor, applying the multi-factor test. The company attempted on appeal to assert that because the writer was a member of the Writer's Guild of America and the screenplay was commissioned using a WGA agreement, it was the key factor establishing employment. The appeals court, though, only weighed this fact as one part of the many factors and upheld the trial courts ruling. Thus, agreeing with the trial court and ruling that the writer was indeed an independent contractor allowed to terminate the transfer and take back ownership of the screenplay.
Why is this Important for Creators to Know?
Many of you will not be thinking what is happening 35 years from now, there are two very important reasons creators should be thinking about the difference between independent contractors and employees in this context:
If you hire someone to contribute in any way to you work, you want to ensure they are a “work made for hire” and working under your direction so they are not entitled at any time in the future to terminate any transfer of interest in his/her contribution.
If you are commissioned to create for another, you want to do your best to be treated as an independent contractor and have as much control as possible. Therefore, if whatever you created becomes extremely successful (like the Halloween movie that was spurned into 11 sequels), you will have a right to take back ownership.
Colin is the founder of Whiskey Ghost Entertainment Law based in Nashville, TN. Colin has represented independent musicians, record labels and publishers with a wide array of representation including the drafting, review and negotiation of record/publishing deals, distribution and band agreements. He has also assisted in the formation of LLC’s, trademark registration and much more. If you have a legal question, please don’t hesitate to email Colin at email@example.com or call him at 615-721-2233.
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