Independent contractors and indie films: Police officers not production employees on low-budget shoot per California Court of Appeals.

Entertainment law case updates

Michael Estrada v. Scars of the Mind Motion Picture Company
Cal Ct App August 31, 2022

Whether production crew members on low-budget indie films are employees rather than independent contractors is an extremely important business and legal affairs issue for film producers. That’s because a production company that allegedly fails to pay workers as employees if required to do so can face wage demands, fines, penalties, and the need to defend themselves in court. It’s exactly what happened to the filmmakers behind “Acts of Desperation,” an indie motion picture filmed in Los Angeles in 2018 by Scars of the Mind Productions.

Film permits for shooting on location in LA require that police officers be engaged for traffic control. Shooting at various spots around Hollywood‘s “30-mile zone,” Scars of the Mind was subject to the permit requirement. To supply the mandated law enforcement services to cover the roads around the film set, the production company turned to Pacific Production Services, an LA film permitting agency. Several retired and active LAPD officers experienced to varying degrees with film production work did the job over a three-day shoot. They were paid as independent contractors, which was apparently exactly as they intended. Each filled in a W-9 form, demanded (and received) additional compensation to cover his or her self-employment taxes, and charged a kit rental fee for his or her uniform and service equipment. There were apparently some bounced checks, but the amounts and bank charges were reportedly all made good.

Some of the officers, however, later retained legal counsel and sued Scars of the Mind. Since the court’s opinion explains that they testified to feeling like they had received all they were entitled to receive for their work, it’s hard to understand why. But the lawsuit claimed the officers were employees, not independent contractors. As such, they alleged, they were due wages and statutory penalties available just to employees. The LA County Superior Court dismissed the claims, finding that under the applicable legal test the officers were independent contractors—and therefore not entitled to remedies available only to production employees.

Are Film Crew Members Employees or Independent Contractors?

The California Court of Appeals found substantial evidence supporting the production company’s defense that the officers were contractors. The decision may be a helpful guide to producers unsure about classifying below-the-line personnel. Most crew are production company employees (even on indie films). But what about someone like a police officer? California law is not at all easy to apply to this situation. The applicable test of independent contractor status is the “A-B-C” test set up in the 2018 case of Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903, and now part of the California Labor Code. The Dynamex three-step test replaced a decades-old multi-factor test with one more protective of employees.

Under the Dynamex test, three elements intended to protect workers must be proven before a worker may be classified as an independent contractor. First, the worker must be free from the hiring entity’s control as well as its right to control the worker’s performance. Next, the worker must perform work that is outside the hiring entity’s usual business. Finally, the worker must have independently made the decision to go into business for himself or herself (not just have been labelled a contractor by the hiring entity). It’s fairly easy to conclude that script supervisors, grips and gaffers, hair and makeup artists, and focus pullers are in the motion picture business (and therefore generally employees on productions).

As applied to the police officers working the low-budget indie shoot in Estrada, however, both the trial court and the California Court of Appeals wasted little time dismissing the case based on substantial evidence supporting the conclusion that the officers were not employees. Among other things, it was the LA film permit (not Scars of the Mind) that required traffic control personnel. California law requires that traffic control work be performed by active, retired, or former police officers who left the force in good standing (none subject to some production company’s right to control). LAPD training (not Scars of the Mind instructions) dictated how the officers did their work, and they (again, not Scars of the Mind) decided when and how to stop traffic.

Further, the law enforcement “business” of the officers in Estrada was entirely distinct from the business of film production. While studio shoots and larger indie productions do sometimes hire police officers as part-time employees, it is usually because the officers will be needed for many continuous days. It is not a motion picture industry standard, especially on a low-budget indie project.

Last, the courts found substantial evidence that the officers set themselves up for traffic control work. They had all previously obtained LAPD permission to work on film sets as off-duty or retired officers. They had all made themselves available through the third-party film permitting service, which set their compensation terms. Scars of the Mind had nothing to negotiate with them. They had all identified themselves as individuals or sole proprietors (not employees) on W-9 forms for nonemployee compensation (not the W-4 forms that employees complete to specify payroll tax withholding).

Even so, the shoot ended up with the production company accused and served with a lawsuit. This should serve as a reminder that hiring cast and crew for your independent film production involves legal risks. It’s just one reason to start working closely with business and legal affairs counsel before you frame your first shot. Contact DeepFocus Law at (503) 975-8298 or schedule an entertainment attorney consultation.

Read the decision here.

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