Opportunities and pitfalls in artist management, licensing and termination agreements

In the dynamic world of artists' lives, artist management, licensing, and termination agreements play a crucial role from a legal perspective. For employees in the arts and culture sector, it's essential to be aware of the legal options and pitfalls. The complexity and potential traps of these legal areas are often underestimated.

This article highlights the nuances and offers valuable insights for freelance artists, employers, and employees.

Important note: Please be aware that this is not legal advice and does not replace it. We are not lawyers and are discussing various aspects from our (legal) layperson's perspective.

Different artists in labor law

Visual artists typically have few points of contact with labor law, as the vast majority likely operate as freelance artists on their own account. Nevertheless, employment relationships do arise in this context as well.

However, artists particularly affected by labor law can be found in the following areas:

Stage performers / Performing arts

A professional career as a stage performer requires knowledge of the legal framework governing employment contracts. The working conditions for stage performers are defined by the German Civil Code (BGB) and collective bargaining agreements , which are generally governed by the German Trade Union Confederation (DGB) or other relevant professional associations such as the German Stage Association .

Also of particular importance are the so-called stage customs , which include additional regulations and practices that go beyond legal requirements. These traditions play a crucial role in contract negotiations and the working practices of stage performers.

In most cases, stage performers are considered employees, even if they are employed under season contracts for only one season, several seasons, or guest performances. The theater owner determines the artists' working hours in terms of the type of work, working hours, and place of work.

The employer is the entrepreneur who operates the theatre and is responsible for payment and compliance with labor law regulations.

so-called traveling theatre companies may be subject to specific regulations and restrictions that must be observed. It is therefore important to thoroughly familiarize oneself with the legal framework and practices of theatre operations in order to pursue a successful and legally secure career as a performing artist.

As a performing artist, you are generally entitled to appropriate employment and a binding fee. If you are obligated to participate in publicly broadcast events, you are usually entitled to additional compensation (Federal Labor Court ruling of March 8, 1989, see source #1 below in the article ).

If your employment as a stage performer is not appropriate, you are normally entitled to compensation. Stage employment law has a special provision: an employment contract concluded for at least one season is automatically extended under the same conditions.

However, this extension can be prevented by a written notification from one of the contracting parties (notice of non-renewal). The deadline for this notification is extended according to the length of your employment.

Film and television

Film law is a complex field of law based on various legal foundations. It is based not only on labor law, but also, and especially, on the German Civil Code (BGB ). Furthermore, the collective bargaining agreement for film and television professionals plays a significant role in this area.

The legal structure of film law therefore comprises a multitude of regulations and provisions specifically tailored to the particular requirements and needs of the film and television industry.

By combining these legal foundations, the rights and obligations of both employees and employers in the field of filmmaking are defined, ensuring a regulated process and fair working conditions for all involved.

musician

The rights and obligations of musicians under labor law are enshrined in the Civil Code .

However, it should be noted that different regulations may apply depending on the artistic focus, be it for performances in restaurants, variety shows, circuses, spa orchestras or in collaborations with cultural orchestras.

The diversity of job fields and the specific requirements for musicians make it important to familiarize oneself with the various legal frameworks in order to ensure a successful career in the music industry.

artists

The employment law for artists is regulated according to the Civil Code and collective agreements.

Regarding legal disputes, it is important to know that the labor courts in Düsseldorf and Munich have jurisdiction. These courts are tasked with making fair and just decisions in labor law disputes in order to protect the rights and interests of the artists involved.

It is therefore advisable to consult experienced lawyers specializing in employment law for artists who can offer professional support in the event of legal questions or problems. Selected contact points can be found in our resources (at the end of the article).

What is a termination agreement?

A termination agreement is an agreement between employer and employee that ends the employment relationship by mutual consent. Unlike a dismissal, where usually one party terminates the relationship, a termination agreement requires the consent of both sides.

To make an informed decision, it is advisable to consult an expert and have the termination agreement reviewed.

Advantages of a termination agreement

A termination agreement is more than just a formal document; it is a strategic instrument that offers crucial advantages for both employees and employers. These advantages go far beyond mere flexibility and control.

For employees: planning security and negotiating power

For employees, a termination agreement offers a high degree of planning security. They have the opportunity to actively shape the end of their employment relationship. This flexibility is particularly valuable when it comes to career changes or planning for different phases of life.

Furthermore, the termination agreement allows employees to negotiate important aspects such as severance payments or the design of the transition phase.

For employers: Efficiency and risk minimization

For employers, termination agreements are an efficient means of making personnel adjustments without getting bogged down in lengthy and often costly dismissal processes.

They enable a faster realignment of personnel, which is particularly important in times of economic change or when restructuring is necessary.

Furthermore, termination agreements minimize the risk of labor law disputes, as they are based on mutual consent.

Win-win situation: Mutual benefits

A well-drafted termination agreement can create a win-win situation for both parties. Employees gain the opportunity to proactively shape their professional future and potentially even secure financial advantages. Employers benefit from efficient workforce adjustments and avoid the risk of lengthy legal proceedings.

These mutual advantages contribute to the fact that concluding a termination agreement is often preferred to a dismissal.

Risks and pitfalls

Although termination agreements offer many advantages, their complexity also entails risks. Ambiguities or errors in the contract can lead to legal disputes. It is particularly important to pay attention to the correct wording of severance payments, notice periods, and confidentiality clauses.

The importance of professional advice

Professional advice can help avoid common mistakes and ensure that the contract is fair and legally sound. Therefore, it is advisable to seek legal counsel before signing a termination agreement.

Termination agreement in practice: A case study

A clear example is the case of a medium-sized company that had to restructure due to economic difficulties. By using termination agreements, the company was able to flexibly adjust its workforce without having to go through lengthy dismissal procedures.

Lessons from practice

This case demonstrates how termination agreements can help overcome challenges in business. At the same time, it highlights the importance of carefully drafting such agreements and seeking legal advice.

A double-edged sword

Termination agreements are a powerful tool in employment law. They offer significant opportunities for both employers and employees, but also entail risks. Careful consideration and professional advice are essential to fully exploit the advantages and avoid the pitfalls.

The importance of an informed decision

In conclusion, it can be stated that termination agreements play an important role in the modern working world. Their correct application and an awareness of their complexity can be crucial for making career transitions smooth and advantageous.

Terminating long-term artist management contracts

Many artists, musicians, influencers, and creative professionals often sign long-term management contracts , which include high commissions payable to the management. Especially at the start of their careers, these mostly young talents hope for a successful launch with talented management at their side.

The manager knows many influential people and has ambitious plans for the artist's future! Recognition, fame, and financial success seem within reach once the contract is signed.

Of course, there are plenty of reputable, fair, and dedicated agencies and lawyers. But finding them can sometimes be difficult. So what can you do if you've become long-term dependent on the wrong management company with exorbitant commission demands, often exceeding 20%?

Similar to dealing with an incompetent lawyer, one can terminate the contract and pursue new career opportunities.

Management contracts typically have fixed terms that can renew automatically. Missing the cancellation deadline can be problematic. However, the law provides a solution: Section 627 of the German Civil Code (BGB) allows artists to terminate a management contract without notice if they have a special relationship of trust with the company.

This regulation also applies to artist and athlete management contracts and cannot be excluded by contractual clauses. This gives artists the opportunity to protect themselves in contracts that previously appeared binding. Therefore, knowledge of this regulation is particularly important for every artist.

Detailed information and legal details can be found in About us , Source #2 (at the end of the article).

Properly Drafting a License Agreement

One last important area for countless artists and copyright holders is licensing agreements .

A license agreement allows the transfer of usage rights for personal intellectual creations such as music, literature, photographs, films, and software, or for industrial property rights such as trademarks, designs, or patents. These agreements regulate the permitted use and the scope of the rights. In addition, special agreements can be concluded in accordance with Section 311 Paragraph 1 of the German Civil Code (BGB). The legal regulations for license agreements can be found in the German Copyright Act ( UrhG), Sections 31 et seq., and in the German Publishing Act (Gesetz über das Verlagsrecht) .

While a license agreement can generally be informal, certain exceptions must be observed. These include agreements concerning unknown types of use and future works, which must always be in writing. A written agreement is crucial for the licensee to avoid misunderstandings. Otherwise, the principle of limited-purpose transfer under copyright law applies, meaning that only the rights of use agreed upon in the contract are granted. This protects the copyright holder from an unintended, comprehensive granting of all rights of use.

• Contracting parties
• Specific subject matter of the license
• Definition of individual usage types
• Option for further licensing (approval to grant or transfer to third parties; permission to sublicense, etc.)
• Exclusive or non-exclusive usage rights
• Spatial and temporal restrictions (contract duration)
• License fees or appropriate remuneration (various types of remuneration are possible: participation, buy-out, combination options, unit, revenue, profit or flat-rate licenses)
• Licensee's modification and editing options
• Revocation rights (e.g., in case of non-exercise for individual types of use)
• Time of transfer of rights
• Regulation of prohibition rights (e.g., defense of intellectual property rights against infringements by third parties)
• Liability and warranty/legal guarantees

There are already pre-made templates for simple license agreements available online. However, if substantial sums of money are involved or a long-term agreement is required, it is advisable to consult a specialist lawyer. This lawyer should be specialized in copyright law, design law, and trademark law.

Joachim Rodriguez y Romero

Owner and Managing Director of Kunstplaza . Publicist, editor, and passionate blogger in the fields of art, design, and creativity since 2011. Graduated with a degree in web design from university (2008). Further developed creative techniques through courses in freehand drawing, expressive painting, and theatre/acting. Profound knowledge of the art market gained through years of journalistic research and numerous collaborations with key players and institutions in the arts and culture sector.

www.kunstplaza.de