Excerpted From: Carlton Fearon, Innovative Contract Drafting to Protect Black Artists, 13 Arizona State Sports & Entertainment Law Journal 131 (Fall, 2023) (168 Footnotes) (Full Document)


CarltonFearonThe entertainment industry has a long history of taking advantage of African Americans. Throughout much of the 20th century, Black performers were often relegated to stereotypical roles or excluded from mainstream media altogether, while white performers profited from their work. This pattern of exploitation continues to the present day, with Black artists facing barriers to entry, limited representation in the industry, and inequity in contracts. These inequities can have significant consequences for Black artists, both in terms of their financial well-being and their ability to control their own narratives and creative output. To address these issues, it is important for the entertainment industry to promote greater transparency and accountability in the contracts it offers to Black artists. Furthermore, the entertainment industry must work towards greater representation and inclusion of Black voices and perspectives at all levels.

It is difficult to get away from contracts, as people often must interact with them in both their professional and personal lives. Contracts are debatably the area of law people encounter the most, considering they create ongoing, legally binding obligations on the parties. While contracts are typically formed with the goal of allocating risk between the parties, it is important to ensure that the terms of the contract are fair and reasonable for both sides. Equity in contracting helps to ensure that the parties to the contract are on equal footing and that neither side is unfairly advantaged nor disadvantaged. This includes considerations such as the parties' bargaining power, the clarity and completeness of the contract terms, and the potential for unforeseen circumstances to arise. By promoting fairness and balance in contractual relationships, equity helps to promote trust and confidence in the marketplace and to facilitate the smooth functioning of business transactions. As such, understanding the principles of equity in contracting is critical to drafting adequate entertainment contracts.

Though freedom of contract is a staple in American jurisprudence, equity in contracting is particularly important because it can help address historic power imbalances between artists and record labels. Black artists have long been exploited by the industry, with record labels taking advantage of their talent and labor while offering unfair and inequitable contract terms. By promoting equity in contracting, artists can negotiate contracts that better reflect their true worth and that protect their interests. This includes considerations such as fair compensation for their work, control over their creative output, and transparency in accounting and revenue sharing. I argue that by fighting for equity in contracting, Black music artists can both improve their own economic prospects and help challenge the systemic inequalities that have long plagued the entertainment industry. Often, artists overlook implementing strong contract terms into their agreements to address unfair treatment. Instead, they typically wait for legislative bodies to create or amend laws or seek change through the judicial system.

However, the quickest and most efficient way to effectuate change likely does not involve waiting for the legislature or judicial system. These traditional methods rely on the ability to make changes to public laws. A clearer path to substantial change for Black artists likely comes from private law in the form of creative contract drafting. Contract drafting choices can have an immediate effect on the entertainer, whether it relates to salary, intellectual property, termination of the agreement, or some other matter. Historically, artists of color have had little to no bargaining power in negotiating contract terms against more powerful transacting parties. However, Black celebrities have lately become the most well-known, influential, marketable personalities and trendsetters across the entertainment landscape. I suggest that Black artists use their influence and recent gain in bargaining power to implement terms that would not only benefit them personally but also change the norms of the industry.

Additionally, legislative or judicial intervention often demands changes in contract law to achieve their goal of equity. For example, in response to the #MeToo movement, activists across the globe insisted that there be changes to the policies and practices allowing sexual harassment, sexual assault, and sexual abuse in the workplace. The #MeToo movement encouraged several states to enact new laws, many of which are directed at protecting marginalized groups through the substance of employment contracts. The most common change was to limit the use of nondisclosure agreements by employers. Although these changes seem promising, if contracting parties opted to include protective language in their agreements preemptively, substantial change would likely be achieved sooner. Moreover, there is an argument that, historically, Black people fare better with free labor markets as opposed to federal regulation. During the early twentieth century, many courts declared a variety of regulatory statutes unconstitutional on liberty of contract grounds. For example, the Supreme Court in Lochner v. New York found that the plaintiff's general right to make a contract relating to his business was protected by the Fourteenth Amendment and this includes the right to purchase and sell labor, except as controlled by the State in the legitimate exercise of its police power. There is a debate between scholars whether those decisions striking down government regulations aided Black interests.

This Article argues that creative contract drafting should be considered as the principal means for Black artists to achieve more equitable agreements. It will examine some of the challenges that artists of color face in the entertainment industry and suggest terms these entertainers should consider adding or eliminating from their agreements.

Part II of this Article examines the history of the entrainment industry taking advantage of Black artists through inequitable contracting, dating back to slavery. Part III examines how artists are paid through royalties and reviews a recent study that demonstrates bias against Black artists is still prevalent, allowing Black artists to be paid less than their white counterparts. Part IV suggests contract terms for entertainers to include in their agreements to better protect their interests and suggest terms Black artists should lobby to limit or remove completely from their employment agreements. Part V concludes. While there is a long history of change through legislative and judicial intervention, this Article aspires to establish why creative contract drafting can be used as an effective means for change.

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Entertainers interested in addressing the industry's lack of diversity while working for an organization they ethically agree with should not stop advocacy for legislative and judicial change. However, they should consider strong contract terms as a means of achieving their goals. Demanding equitable contract terms in their employment agreements can prompt immediate cultural change. Though contracts may not be the sole answer to protecting Black artists from inequity in the entertainment industry, in the aggregate, these contracts can have an impactful reach. Innovative contract drafting has proven a successful way for an array of industries to ensure compliance with guidelines. If implemented broadly, these same techniques can be used to combat the unfair contracts in the entertainment industry and have a greater far-reaching effect--increasing diversity in entertainment across America.

Carlton Fearon successfully completed his legal studies at the Sandra Day O'Connor College of Law, Arizona State University in Fall 2023.