Syphilis and Forced Employer Vaccinations…

Today APHSS & the FSC begin a regiment of providing free antibiotic shots to porn performers in order to prevent the spread of syphilis. I have received numerous emails, texts, phone calls and DMs on Twitter from various members of the adult industry community as to the legality of an employer demanding that a worker receive a prophylactic antibiotic shot an as a condition of employment.

Basically, it is my understanding that certain production companies will not hire a particular performer unless they can show proof of receiving the antibiotic shot for syphilis through the APHSS system. I am unaware of any exception to this condition by APHSS or FSC that would allow a performer to seek out the consultation of their own physician as to the risks and benefits of receiving such treatment. Even though the prophylactic antibiotic shots begin today very little information has been disseminated to the performers other then if they receive the shot they can return to work in as little as 10 days. I have not seen much in the way of information being provided to the performers in regards to the risks of the antibiotic shot or the side effects of such. Nor have I seen much in the way of alternatives being proposed.

I cannot and will not provide medical advice. What I can say is that, legally, every person has the right to chose their own medical treatment from their own physician and if necessary refuse such treatment.

In California it is a well established rule of law that a physician who performs any medical procedure without the patient’s consent commits a battery irrespective of the skill or care used. The consent of a patient must be “informed.” Under the doctrine of informed consent the patient must have the capacity to reason and make judgments, the decision must be made voluntarily and without coercion, and the patient must have a clear understanding of the risks and benefits of the proposed treatment alternatives or nontreatment, along with a full understanding of the nature of the disease and the prognosis. Accordingly, the right to refuse medical treatment is equally “basic and fundamental” and integral to the concept of informed consent.

I urge all performers to seek out a consultation from their own physician as to the need for antibiotics for treatment for a disease they may not have and may not have even been exposed to.

As to whether an employer may force inoculations/vaccinations as a condition of employment it may be permissible under California law, however, any performer having an adverse reaction to the inoculation/vaccination would have a civil lawsuit and a workers’ compensation claim against the entities and production companies requiring such inoculation/vaccination as a condition of employment. In Maher v. Workers’ Comp. Appeals Bd., 33 Cal.3d 729 (1983), a nurse’s assistant was required by her employer to undergo a physical examination that included a test for tuberculosis. When she tested positive for the disease, she was required to undergo treatment for tuberculosis as a condition of continued employment. She developed a significant adverse reaction to the treatment. The California Supreme Court held that employer-required medical treatment for a nonoccupational disease arises out of the employment and is compensable. (Id. at p. 738; see also Roberts v. U.S.O. Camp Shows, Inc. (1949) 91 Cal.App.2d 884, 885 [205 P.2d 1116] (Incapacity caused by illness from vaccination or inoculation may properly be found to have arisen out of the employment where such treatment is submitted to pursuant to the direction or for the benefit of the employer.)

By demanding and directing the prophylactic antibiotic shot, those production companies requiring such open themselves up to a myriad of liability as to any death, incapacity or future treatment resulting from such decision. It is cautioned that the performers seek medical advice as to the treatment and production companies seek legal advice to the ramifications of demanding forced prophylactic antibiotic shot as a condition of employment.

No Work Comp? What Employers Need to Know!

As my readers are now aware from my article posted on August 19th – Work Comp: Porn Performers EEs vs. ICs, performers are indeed employees in the state of California for purposes of worker safety laws. California, as many other states do, requires that all employers within its borders secure workers’ compensation insurance coverage. However, what happens if an employer is uninsured for workers’ compensation in the state of California ?  California has rather harsh penalties for failure to secure workers’ compensation insurance, the California Labor Code reads in relevant part;

3700.5. (a) The failure to secure the payment of compensation as required by this article by one who knew, or because of his or her knowledge or experience should be reasonably expected to have known, of the obligation to secure the payment of compensation, is a misdemeanor punishable by imprisonment in the county jail for up to one year, or by a fine of up to double the amount of premium, as determined by the court, that would otherwise have been due to secure the payment of compensation during the time compensation was not secured, but not less than ten thousand dollars ($10,000), or by both that imprisonment and fine.

(b) A second or subsequent conviction shall be punished by imprisonment in the county jail for a period not to exceed one year, by a fine of triple the amount of premium, or by both that imprisonment and fine, as determined by the court, that would otherwise have been due to secure the payment of compensation during the time payment was not secured, but not less than fifty thousand dollars ($50,000).

In addition to possible imprisonment and fines, the state of California can issue penalties of up to one hundred thousands dollars ($100,000) against the employer in addition to the amounts listed above even for a first offense. The uninsured employer will also be subject to a stop order being levied against it by the Director of Industrial Relations. A stop order is basically an order/finding by the Director that such employer will immediately shut down and will not conduct any business utilizing employees until such time that the employer has secured workers’ compensation insurance and presents evidence of a policy to the Director. Also, the Director will issue an additional fine of one thousand five hundred dollars per employee not legally insured;

3722. (a) At the time the stop order is issued and served pursuant to Section 3710.1, the director shall also issue and serve a penalty assessment order requiring the uninsured employer to pay to the director, for deposit in the State Treasury to the credit of the Uninsured Employers Fund, the sum of one thousand five hundred dollars ($1,500) per employee employed at the time the order is issued and served, as an additional penalty for being uninsured at that time or issue and serve a penalty assessment order pursuant to subdivision (b).

(b) At any time that the director determines that an employer has been uninsured for a period in excess of one week during the calendar year preceding the determination, the director shall issue and serve a penalty assessment order requiring the uninsured employer to pay to the director, for deposit in the State Treasury to the credit of the Uninsured Employers Fund, the greater of (1) twice the amount the employer would have paid in workers’ compensation premiums during the period the employer was uninsured, determined according to subdivision (c), or (2) the sum of one thousand five hundred dollars ($1,500) per employee employed during the period the employer was uninsured. A penalty assessment issued and served by the director pursuant to this subdivision shall be in lieu of, and not in addition to, any other penalty issued and served by the director pursuant to subdivision (a).

I have seen the Director of Industrial Relations chain and paid lock businesses, not allowing entry until all insurance is secured and fines paid. This is not a situation that should be taken lightly. The state of California can be very aggressive in regards to prosecuting uninsured employers.

Beyond the regulatory scheme of imposing fines and possible incarceration, there are also possible negative effects in regards to a claim filed by an injured employee. In situations where an employer is insured for workers’ compensation, an injured employee’s ONLY remedy is to file a workers’ compensation claim. In instances of uninsured employers, an injured employee has several choices as to how to handle their claim for injury.

First, the injured employee may certainly still file a workers’ compensation claim with the Workers’ Compensation Appeals Board as they would do if the employer was insured. The injured employee may also file a civil lawsuit in addition to the workers’ compensation claim. Finally, if the employer does not defend and/or pay benefits on the workers’ compensation claim, the Uninsured Employer’s Benefits Trust Fund will step in and do so on the behalf of the employer. If the UEBTF does in fact provide benefits on the behalf of the employer to the injured employee, they will then seek ALL possible means of reimbursement from the employer, including pursuing civil actions and the filing of liens against property.

Furthemore, the employer simply filing for bankruptcy will not stop the UEBTF from pursuing their recovery actions directly against the owners of the uninsured employer. Any owner with at least a 15% share of ownership will be personally responsible to reimburse the UEBTF for all benefits paid the the injured employee. And the state can collect all of the benefits from just one owner. Be extremely careful of whom your partners are. The California Labor Code reads in relevant part;

3717. (a) A findings and award that is the subject of a demand on the Uninsured Employers Fund or an approved compromise and release or stipulated findings and award entered into by the director pursuant to subdivision (e) of Section 3715, or a decision and order of the rehabilitation unit of the Division of Workers’ Compensation, that has become final, shall constitute a liquidated claim for damages against an employer in the amount so ascertained and fixed by the appeals board, and the appeals board shall certify the same to the director who may institute a civil action against the employer in the name of the director, as administrator of the Uninsured Employers Fund, for the collection of the award, or may obtain a judgment against the employer pursuant to Section 5806. In the event that the appeals board finds that a corporation is the employer of an injured employee, and that the corporation has not secured the payment of compensation as required by this chapter, the following persons shall be jointly and severally liable with the corporation to the director in the action:

(1) All persons who are a parent, as defined in Section 175 of the Corporations Code, of the corporation. (2) All persons who are substantial shareholders, as defined in subdivision (b), of the corporation or its parent…

(b) As used in this section, “substantial shareholder” means a shareholder who owns at least 15 percent of the total value of all classes of stock, or, if no stock has been issued, who owns at least 15 percent of the beneficial interests in the corporation.

In conclusion, penalties, fines and incarceration are all possible ramifications for not securing workers’ compensation insurance. Furthermore, employers that do not have workers’ compensation insurance are also putting their personal finances at stake in the form of civil judgments and liens enforced, not by an injured employee, but rather by the state of California through the UEBTF. If you’re an employer in the state of California and do not have workers’ compensation insurance it is imperative that you immediately seek such coverage before either (a) a work related injury occurs and/or (b) the Department of Industrial Relations does a spot inspection and issues a work stoppage order.

Work Comp: Performers – EEs vs. ICs

The debate of performers being independent contractors or employees is an issue that comes up often in my practice. Whether it is an injured or infected performer, a director worried about his/her liability for an on-set injury or a studio owner asking my assistance in securing workers’ compensation coverage for his/her company, this is an issue that remains a hotly debated topic. Many in the industry still believe that for purposes of worker safety laws performers are independent contractors and not the employees of the producer paying them, directly or indirectly. This cannot be farther from the truth. Even during the open meetings with Cal-OSHA in June 2011 I heard numerous performers and directors declare themselves independent contractors during the public comments. Only to have Ms. Gold of Cal-OSHA flatly deny that issue.

Unfortunately or fortunately depending on what side of the debate you are on, a worker cannot simply declare themselves to be something. A worker’s status is dependent upon statutes and case law, not what the beliefs of the employer OR the employee happens to be. For this article to truly explain all the relevant statutes and case law surrounding the independent contractor vs employee debate would require hundreds of pages if not an entire book. Therefore, for the sake of brevity it is perhaps easier to select two California cases that are on point with this issue and illustrates for those reading this article that this issued is well settled.

Often porn performers compare themselves to both actors as well as stunt-people. The job of a porn performer can be said to be a blend of the acting and performing risky, albeit safe, stunts on set. Many inaccurately believe that stuntpeople and porn performers cannot be an employee under the traditional definition of such since they are only hired for the day or even a few hours. This is simply not true in California and in most states ( Note: It is possible though to be an employee for worker safety laws but an independent contractor for tax purposes).

Stuntpeople have been considered employees of the production company hiring them for at least 50 years in California. In Durae v. Industrial Accident Commission, 206 Cal.App.2d 691 (1962), the Second District Court of Appeals (this happens to be the court with jurisdiction over all of Los Angeles County) determined that a stuntman was indeed an employee for workers’ compensation purposes.

Petitioner is a motion picture and television actor. He was engaged to make a personal appearance at a rodeo in Pueblo, Colorado, in August 1960. His act was to include a demonstration to the audience of how motion picture and television shows were filmed. As a part of this demonstration, a man would ride a horse at a fast pace across the area, petitioner would fire a shot at the rider, and the rider would fall from the horse, taking what, among stuntmen, is commonly called a “saddle fall” to the ground.

 Originally, the Industrial Accident Commission (the precursor of today’s Workers’ Compensation Appeals Board) ruled against the injured employee, William Mansker, finding that he was indeed an independent contractor. Mansker appealed the decision and was granted benefits by the IAC. The employer, Donald Durae, then appealed the case to the California Court of Appeals where Mansker’s award of benefits was upheld and he was determined to be an employee and not an independent contractor. The court went on to state;

This finding is compatible with the findings affirmed by the Supreme Court in two cases somewhat comparable on their facts. In Drillon v. Industrial Acc. Com., 17 Cal.2d 346 [110 P.2d 64], one who hired a jockey to ride his horse in one race was held to be an employer on the basis that he had the right to control the manner in which the jockey rode the horse. In Schaller v. Industrial Acc. Com., supra, 11 Cal.2d 46, the petitioner made separate contracts with four trapeze aerialists that each would perform his specialty for a 20-week engagement. He then agreed to provide the four aerialists as an act in a traveling show. He was held to be an employer although he in no manner directed the act or the stunts of the individual aerialists.

It is clear from the holding in this case that stuntpeople have been considered employees of their contracting companies for at least the past fifty years. This ruling is consistent with the current state of California law. Stuntpeople remain employees in California, as do most workers.

Some porn performers may consider themselves more akin to actors then stuntpeople though. However, just as stuntpeople are considered employees of the production company so are actors, even those hired and paid through a talent agency. It is a misguided belief that, by a production company not paying the talent but rather the agent, they can avoid being held liable for a work related injury. It is also a misguided belief by large production companies that hiring directors or smaller sub-contracting production companies to actually produce the content will shield them from liability. In California, we have a law referred to as the general-special employer rule. Which basically states that if Company A hires a sub-contractor -> Company B, to perform services for them and Company B hires their own employees then Company A has a duty to insure that Company B has workers’ compensation insurance. If Company A fails to “pull” the workers’ compensation insurance information of Company B and an employee of Company B suffers an injury then Company A and their workers’ compensation carrier will be liable to provide coverage for that injury.

In Johnson v. Berkofsky-Barret Productions, Inc. (1989) 211 Cal. App. 3d 1067, an actor, hired for the day, suffered a shoulder injury while filming a television commercial for IBM. He attempted to claim that he WAS NOT an employee of the production company and rather an employee of his agent so he could file a lawsuit in civil court against the production company ( Note: The injured worker preferred to be an independent contractor so that he could sue under a civil tort theory and recover pain and suffering which is not possible to recover under a workers’ compensation claim ).

Johnson, an actor in television commercials, obtained acting jobs through a company called L’Image. Generally, L’Image directed Johnson to the shooting location of the commercial and advised him how to dress. The commercial production company then paid L’Image for Johnson’s acting services and L’Image, in turn, paid Johnson after deducting its percentage fee.

 Johnson, like many porn performers, was not paid directly by the production company but rather by his agent. The court then went on to discuss the employee vs. independent contractor distinction;

Labor Code section 3351 defines an employee as “every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, …”

An independent contractor is “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.” (Lab. Code, § 3353.)

[5] “The label placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced. [Citations.] … [¶] …. [¶] … ‘[The] principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired. …’ [Citations.] [¶]

The court then analyzed the six factors to determine employment status under S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal. 3d 341 and determined that;

We therefore conclude, as a matter of law, Johnson was an employee of BBP at the time of the accident and therefore he is limited to workers’ [211 Cal. App. 3d 1074] compensation as his sole and exclusive remedy for damages resulting from personal injuries. (Lab. Code, § 3602.)

In conclusion, it is clear from Durae, Johnson and Borello, that the type of control that a production company has over a porn performer while on set (hence being “directed” by a “director”) will make them liable for workers’ compensation benefits due to an on-set injury. Further, a production company should want an injured performer to be an employee, otherwise that injured performer could sue the production company for damages resulting from pain and suffering. In the case of an on-set transmission of HIV those damages could result in millions of dollars being awarded to the infected performer. However, under workers compensation no such recovery is available. Workers’ compensation actually protects the studios more so then the performers, if a company does indeed have coverage.

In a future article I will discuss the ramifications for not having workers’ compensation insurance under California law.

The Syphilis Outbreak in Porn & Its Legal Ramifications

On August 16, 2012 XBiz reported that, according to talent agents Shy Love of ATMLA and Derek Hay of LA Direct Models, a male performer knowingly altered his paper test and worked in the industry while contagious with syphilis. According to the story on XBiz “the performer admitted to Hay he was feeling ill in mid-July and underwent tests with his personal physician, at which time the syphilis was originally diagnosed. He was also given medication at the time, Hay said. Then he tested on July 21, approximately a week later, at Talent Testing Services, which also identified the performer as positive for syphilis…” The story went on to state “the discrepancy on the performer’s test was discovered on Aug. 7, when the producer who received the scene paperwork from the director  “was doing his normal due diligence and noticed an irregularity in this performer’s test paper in comparison to what he was used to receiving from TTS…Hay said the portion of the test that notes “reactive or not reactive” for syphilis had been obscured.”

Obviously, this revelation caused numerous people in the industry to be upset and stressed. It appears from the reported story that this particular male talent knowingly altered his test and worked in the industry with full knowledge that he was contagious. I was asked several times on Twitter whether the actions by this particular male talent were criminal in nature.

The answer is yes. In California, if someone knowingly exposes another to a sexually transmitted disease they have in fact committed a crime. For knowingly exposing a scene partner, that contagious performer would be guilty of a misdemeanor which is punishable by imprisonment up to 6 months and a $1000.00 fine. I also believe that true is for each exposure. Therefore, as stated in the article by Shy Love, this performer worked on three different occasions with an altered test and thus that performer may be charged with three separate counts and possibly face more than a year in jail.

The relevant code sections are listed below;

California Health & Safety Code

120290. Except as provided in Section 120291 or in the case of the removal of an afflicted person in a manner the least dangerous to the public health, any person afflicted with any contagious, infectious,or communicable disease who willfully exposes himself or herself to another person, and any person who willfully exposes another person afflicted with the disease to someone else, is guilty of a misdemeanor.

120600. Any person who refuses to give any information to make any report, to comply with any proper control measure or examination, or to perform any other duty or act required by this chapter, or who violates any provision of this chapter or any rule or regulation of the state board issued pursuant to this chapter, or who exposes any person to or infects any person with any venereal disease; or any person infected with a venereal disease in an infectious state who knows of the condition and who marries or has sexual intercourse, is guilty of a misdemeanor.

Obviously anyone exposed by this male talent could press criminal charges against him.

However, there are other rights and remedies that an exposed and infected performer has. The main one being a claim for workers’ compensation benefits. If a performer is exposed on set to a virus or contagion that will require extended medical treatment and a loss of income for a prolonged period of time it is unavoidable that the performer will suffer because of it. Workers’ compensation insurance can provide benefits to that performer in the form of medical treatment and temporary disability payments for the loss of income until the performer can return to their usual and customary job activities, performing. While no one will “get rich” from a workers’ compensation claim it is a system of benefits to help an infected performer in case of an injury. Syphilis would in fact be considered a work related injury and covered by the appropriate Labor Code sections. Further, a workers’ compensation claim is not like a lawsuit where a performer would have to prove their claim like in civil court. In case of something like a syphilis infection all that would be necessary is for the infected performer to prove they worked with the original carrier of the infection and it will be presumed to be a work related injury. The burden would then shift to the production company to prove that the performer actually became infected somewhere else. It is almost impossible for a production company to meet that burden. Also in the workers’ compensation system “a tie” is usually decided in favor of the infected performer.

While this situation is extremely problematic for the industry and for the performers exposed there are remedies for them. However, this is a situation that needs to be learned from and never repeated. The health and safety of performers should be the first and foremost concern of other performers and the production companies.

Who Should Pay for Performer Testing ?

On July 24, 2012, Manwin the owner of membership websites known as Brazzers and Mofos and tubesites such as YouPorn, PornHub, and Tube8 made an announcement that they would donate $50,000.00 per month to create a “Performer Subsidy Fund” to reimburse performers for the cost of testing in the adult industry (See story here).

This fund would be administered by the Free Speech Coalition through their APHSS program. Basically, Manwin stated that they would reimburse all performers the costs of their tests within a given month up to $50,000.00, whether those tests were for Manwin productions or not. Manwin also called for other production companies to join with them in their generosity and also donate to the fund. They further donated a total of $35,000.00 to FSC/APHSS to administer the fund. However, they did place a time limit on the program indicating that the program would only run through the end of 2012. At which point it would be re-evaluated to determine if it would be continued into 2013.

Many people within the industry pointed out that this was a very generous, albeit suspicious offer from Manwin. There is a general opinion within the industry that Manwin, through their tubesites, was a direct contributor to the economic downfall of porn production. Why now would they voluntarily come forward and support performers to reimburse testing costs ? Some people even opined that they believed this was Manwin’s attempt to take over medical testing procedures in the industry.

However I think the answer can be found in California Labor Code section 222.5 which reads in relevant part;

“No person shall withhold or deduct from the compensation of any employee, or require any prospective employee or applicant for employment to pay, any fee for, or cost of, any pre-employment medical or physical examination taken as a condition of employment, nor shall any person withhold or deduct from the compensation of any employee, or require any employee to pay any fee for, or costs of, medical or physical examinations required by any law or regulation of federal, state or local governments or agencies thereof.”

In short, employees in California cannot be made to pay for pre-employment medical testing, which is exactly what the STD testing is within the adult content production business – a pre-employment test. Without a clean test no production company will or should hire a performer to perform in an adult production.

I realize that many performers in adult do not and refuse to consider themselves employees. Rather they wish, for whatever reason, to be called independent contractors. I can assure anyone reading this article that performers, for purposes of worker safety laws, are indeed employees and not independent contractors. Perhaps for tax purposes they may be independent contractors. It is possible to be an employee for worker safety laws but yet be an independent contractor for tax purposes.

Further, on January 1, 2012 additional laws went into effect in California making the “willfull misclassification” of employees as independent contractors even more dangerous for employers. Labor Code Section 226.8 imposes significant penalties ranging from a minimum of $5,000 to $25,000 for “each violation.” The civil penalties for one misclassified individual could be tens of thousands of dollars depending on the interpretation of “each violation” and the penalty imposed. Obviously, if Manwin does not take remedial steps to comply with California law in regards to the classification of employees they may face significant penalties as well as potential lawsuits under California’s Private Attorney General Act, which allows individuals to file lawsuits to enforce California law.

It is this author’s opinion that Manwin is starting to realize that the performers are indeed employees and are taking steps to comply with California law. Obviously, they are trying to set a precedent with the reimbursement of testing costs, however they still fall short of actual compliance with Labor Code section 222.5. Since the “Performer Subsidy Fund” requires a performer to sign up for the program instead of Manwin paying for the pre-employment testing outright.

None-the-less, Manwin is taking a step in the right direction when it comes to the treatment of performers, however, it is only a half step. At some point all production companies will have to address not only peformers’ testing costs but also the issue of workers’ compensation for on-set injuries.

If you would like to read more on the issue of workers’ compensation and porn production here is a two part interview I did for XBiz Magazine in 2007 … Part I and Part II

In future posts I will be covering the issue of workers’ compensation insurance and its application to porn production sets further.

A Look at Workers’ Comp – Part II

Written by Joanne Cachapero

http://www.xbiz.com/articles/23718/fattorosi
The “mainstreaming” of adult may mean wider markets and increased revenue to some content producers. For performers, going mainstream promises recognition and legitimacy beyond being stereotyped as a mere adult star.

Even as the adult business environment becomes more corporate, few are ready to consider what effect mainstreaming will have on the way business is conducted. In an industry that, for the most part, operates under the radar and has been largely self-regulated, can standard business models and practices ever replace what is aptly described as a “Wild West” mentality?

Presumably, most major adult multimedia corporations and larger studios have had to integrate basic business practices in order to minimize potential risks and maximize their ability to expand into highly visible positions in the marketplace. Performers interested in tax advantages may choose to incorporate and become “employees” of their own companies.

In a January 2007 article appearing in the San Francisco Chronicle, Kink.com CEO/founder Peter Acworth was quoted saying, “We have a clean and safe work environment, the models are well-paid and they are explicitly covered by workers’ comp.”

Acworth was defending his multimillion-dollar web-based company against accusations that female performers were being exploited, an attack made by community activists opposed to Kink.com’s purchase of the San Francisco Armory Building for use as a production studio/office location.

Industry labor attorney Michael Fattorosi’s philosophy is that, in a business still largely viewed by the mainstream as somewhat disreputable and illegitimate, observing standard business practices, as well as state and federal regulations, is the best defense against an anti-porn offense.

In an earlier interview with Fattorosi several months ago, he discussed the issue of employee vs. independent contractor. This time around he points out the legal advantages of providing workers’ compensation insurance coverage to employees. He also discusses his thoughts on worst-case scenarios and where the industry is headed.

XBIZ: Explain the basic legalities behind providing workers’ compensation coverage for employees.

Michael Fattorosi: To operate a business here in California is illegal without having workers’ compensation insurance. So, to actually hire someone that is not a family member, or your wife, or a partner or principal in the business — hiring an employee and not providing them work ers’ compensation insurance could be a felony and is definitely a misdemeanor.

You’re also subjected to fines if you’re caught by the Department of Industrial Relations not having workers’ compensation insurance. And you’re subject to what’s called a lockout or a shutdown. They’ll come in and shut down your place of employment until you secure the necessary workers’ compensation insurance and you prove to them that you now have and are covered for work comp injuries.

Once you have workers’ compensation insurance, there’ll be a question as to whether or not this is a covered employee. That’s a different issue. Once you have a policy in effect, what it does then is, if somebody tries to file a workers’ compensation claim, you now have something protecting the employer called ‘exclusive remedy.’

In California, if you don’t have workers’ comp insurance, that employee can then also sue you in civil court where they will be able to recover punitive damages and the exposure on that company will be much higher in civil court than it would be in a workers’ compensation court.

In workers’ compensation court, the employee doesn’t have to show the employer was negligent. If it happens at work, it’s work-related. You don’t have to prove negligence. You don’t have to prove that the employer did something wrong. It could be a simple trip and fall, with nobody at all negligent and that would still be a covered claim.

XBIZ: Should companies expect to pay more for coverage because of the nature of the business? Will there be insurance carriers that don’t want to write policies for adult-oriented businesses?

Fattorosi: Yes. There are brokers that won’t want to deal with it, and there are lines and insurance companies that won’t want to insure for the risk.

But in California, we have the benefit of what’s called State Compensation Insurance Fund, which is a governmental agency that’s quasi-private, quasi-public, which provides insurance as a last resort. So, if you can’t get insurance anywhere else, they have to insure you, if it’s a legal business. Adult video production in California is a legal business according to [the Freeman decision]. So, SCIF has to provide insurance for workers’ compensation for adult companies.

There are risky jobs and you’re going to pay more. Of course, I think, just like anything else, the more safety measures that you have in line for your employees; the less you’re going to pay. Put it this way; you can cover stunt men and stunt women for workers’ compensation. There are extremely dangerous jobs that get covered, so I don’t think it’s a matter of not being able to cover adult performers.

XBIZ: What do you think is preventing the state of California from just going ahead and mounting investigations and auditing people now?

Fattorosi: Time and money.

XBIZ: What do you think it will take for them to start investigating?

Fattorosi: One more HIV outbreak. I imagine, after the last HIV outbreak there was a movement in Sacramento to require condoms, to change testing procedure. And I think with the next HIV outbreak — God forbid if there is one — that depending on the political climate at the time, that will cause people to spring into action about this. And they’re going to look at workers’ compensation, they’re going to look at Cal-OSHA, and they’re going to look at the Department of Industrial Relations.

The reason that I brought this up is because everybody talks about 2257. Everybody talks about obscenity as a way for the government to shut down the industry.

Simply not having workers’ compensation insurance is another way that if George Bush and the Republicans in Washington wanted to call up Arnold Schwarzenegger and the Republicans in Sacramento and exert a little political pressure, [they would] say, ‘We have an inside way of going after these people on a state level.’

XBIZ: The industry has been operating in the same manner for a long time without really having to address these issues. What makes you think that they need to be addressed now?

Fattorosi: I have a lot of experience representing Fortune 500, large corporations — defense contractors, major studios — and when I saw the business practices used in the adult business, I said to myself, ‘There’s a lot of room for education and growth here,’ and [for me to] be able to take this industry from a wild, wild west mentality to a more corporate America mentality.

I think that from a standpoint of sales, from profitability and from growth, that as the industry matures, as it becomes more corporate, it’ll become more widely accepted. When you have a situation where people are buying films or buying video clips, where they believe that the performers are unfairly treated and being demeaned, being abused, and being taken advantage of, you have a smaller base of prospective customers.

When you have a performer that has an attorney, an accountant, her own production company — we can use Jenna Jameson as an example — I don’t believe that anybody believes that Jenna Jameson is an abused, taken-advantage-of performer. I see her as a savvy businesswoman and as almost a mainstream performer. And you feel better about buying into a situation like that as a consumer.

I come at this from an attitude of taking 10 years of experience, in regards to representing major corporations and, trust me, I’ve done the same things with major corporations and told them basically, when you go into court, whether it’s on a workers’ comp issue or whether it’s on a civil issue, you want to be the guy wearing the white hat. Already, from the standpoint of producing adult content, you’re gonna be the villain — so the less villainous you are, the better off you’ll be. So if you do things right, you will 1) have a better time in your business practices, and 2) if you do end up in court, you’ll be a much better defendant than if you didn’t do things properly.

What’s going to happen is that you’re going to end up in front of an audience that doesn’t believe in the wild, wild west mentality. They’re going to be your average citizens and for the most part, while I think that people in California tend to be somewhat progressive — they are also somewhat fair.

XBIZ: Are you afraid people in the industry will question why they need this type of business advice or that you may be perceived as an attorney who is trying to churn up business?

Fattorosi: Again, I like to give my clients legal advice, as well as practical advice. And I know there are a lot of attorneys who don’t like to do that. A lot of attorneys like to give very esoteric, convoluted advice where, when you’re done talking to them, you don’t know any more than you did before you went in there.

I’m not that type of attorney. I come from a blue-collar background. I come from a father that owned a small business, and so I listened to my father’s conversation with attorneys and I saw how he reacted to it. And I’m not trying to create a situation within this industry where I profit. Everything that I’m telling you, if they listen to what I have to say, I won’t profit from it — because this is preventative medicine.

I’m trying to be very careful in posing this issue in that way. ‘The world is going to come to an end!’ The world is not going to come to an end, OK? The industry has been doing it a certain way for so long, and they will continue to do it for a certain way for so long.

But what will end up happening, and this I can almost guarantee, is that at some point, something is going to happen, whether that’s another injury, an HIV outbreak, a special report by a news station, the federal government taking a look at this, a state governmental agency taking a look at this — something is going to happen at some point where there’s going to be more interest in this issue and it could be detrimental for the industry.

This really comes from a sense of trying to protect the industry as opposed to trying to profit from the industry.

A Look at Worker’s Comp – Part I

Written by Joanne Cachapero

http://www.xbiz.com/articles/80446/fattorosi

When attorney Michael Fattorosi draws a parallel between workers in the adult industry and migrant day laborers, he isn’t comparing pile driving to picking apples — or is he? Because whether an actor suffers a slipped disc while performing on set or a farm worker cracks his head open by falling off a ladder, Fattorosi wants all to know that, as employees, both are entitled to file a claim for workers’ compensation benefits.

An industry lawyer and managing partner at Fattorosi & Chisvin, Fattorosi isn’t the first attorney to comment on the “independent contractor vs. employee” issue for those working in the adult industry.

In June 2004, following the HIV outbreak that caused a two-month, self-imposed industry moratorium, industry lawyer and Free Speech Coalition Chairman Jeffery Douglas was quoted in an article for the San Fernando Valley Business Journal, saying, “The vast majority of the 1,200 people that make a living performing in the movies are not employees, they are independent contractors.”

More recently, attorney Clyde DeWitt was quoted in a September article posted on AVN.com saying, “The greatest temptation for businesses that are new and/or small is to classify employees as independent contractors.” He went on to state that employers “must have workers’ compensation insurance.”

Unlike Douglas or DeWitt, who specialize primarily in 1st Amendment and obscenity law, Fattorosi’s practice is based in labor law, with a specialization in workers’ compensation issues. And while any issue is debatable, particularly amongst lawyers, Fattorosi cites specific case law and other legal references to back up his assessment of adult industry workers as employees.

The debate was brought into sharper focus after the 2004 HIV outbreak in which Evasive Angles and TT Boy Productions were cited and fined $30,560 for noncompliance with Cal/OSHA’s blood-borne pathogens standard. In effect, Cal/OSHA determined the infected performers to be employees and was, therefore, able to fine the companies for failure to comply with pathogen standards, failure to report a serious work-related illness, and failure to prepare a written injury and illness prevention program.

Following the incident, Cal/OSHA established safety standards pertaining specifically to the adult industry. Those standards, posted on the Cal/OSHA website, clearly state “Even workers who are paid as independent contractors may be considered employees under the law. The Division of Labor Standards Enforcement (DLSE) provides guidance for determining whether someone is an independent contractor.”

The DLSE website states that each claim is considered on a case-by-case basis and that “there is no set definition of the term ‘independent contractor.'” However, it also says the “DLSE starts with the presumption that the worker is an employee” and that “the most significant factor to be considered [when determining employee status] is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed.”

Because production companies and content producers retain what is called “pervasive control over the operation as a whole,” according to Fattorosi, that implies an employer/employee relationship and, as such, the employer is obligated to provide workers’ compensation insurance coverage in the event of a work-related injury or illness.

Fattorosi has been vocal within the industry on the topic; most recently, he has been slated to co-host a talk show, “Breaking the Law,” for Internet station Prime Time Uncensored and has begun posting informational articles and industry news on his law firm’s own website. He sat down for an interview with XBIZ Video. Part 1 examines the concept of employee vs. independent contractor.

XBIZ: Explain the difference between an independent contractor and an employee.

FATTOROSI: For purposes of an article, it is a very complex type of situation. And you’re also looking at different standards for different uses. The IRS may have one standard, the California Department of Industrial Relations may have a different standard, and of course, the civil courts may have yet even a different standard.

We’ll talk about it from a broad standpoint first. If you have the ability to control that particular person that you hire — and what I mean by control is tell them when to show up, where to show up, what to wear; if you provide tools necessary for them to complete whatever you hire them to do, if you require them to take breaks at certain times — this tends to go towards an employer/employee relationship.

The best example I can use is if you needed to paint your home and you decided you’re going to hire a painter. You went to the phone book and you called up Bob the Painter. Bob has an ad, and in that ad Bob is a licensed and bonded painter because part of his profession requires licensing and bonding, which requires him to have a certain standard of care and work and diligence in what he does. It also requires him to have workers’ compensation insurance for his employees. Well, if you call Bob the Painter, he comes out to your house and he asks, “What color do you want to paint the house?” You get to select a color.

Other than that, Bob pretty much does everything. He schedules the job around when he is available. Bob tells you how long it will take. Bob brings his own equipment and his own workers, possibly. And at the end, usually you pay half in front and half at the end when the job is completed to your satisfaction. In that particular situation Bob would be an independent contractor.

Now, if you decided that Bob’s price was too high and you wanted to still paint your house, and you went down to the Home Depot and you bought the paint and the drop cloths, and you bought the scaffolding, the brushes and the paint trays — and then, at the corner next to the Home Depot, there are several day laborers standing there and you decided to hire those day laborers on to come paint your house — they would be considered employees.

Now, if Bob gets hurt while painting your house, Bob can’t file a claim against you because he’s an independent contractor. If one of those day laborers happens to fall off the scaffolding and hurt himself, he can file a claim against your workers’ compensation insurance carrier. Most people don’t realize that every homeowners insurance policy comes with a workers’ compensation rider for household employees.

XBIZ: The adult industry has been operating for a long time without necessarily observing standard business practices or legalities, operating on the premise that performers and crew people are independently contracted. Do you feel the state of California, at this point, recognizes adult performers as employees?

FATTOROSI: You’re assuming that they haven’t up to this point.

XBIZ: Well, it doesn’t really seem like the state is running out to investigate potential violations.

FATTOROSI: California’s a big state and it’s got budgetary limitations and they’ve got a lot of industries in California. A lot of industries are also in the same boat. For a good number of years, migrant farm workers were also treated as independent contractors, or tried to be treated as independent contractors.

I mean, in workers’ compensation law there are a lot of little tiny niches and glitches and ways to look at the law; it would be amazing if most people understood it. Most attorneys don’t understand workers’ comp and certainly most employers don’t, but I’ve been representing [employers] for more than a decade.

I don’t think the state of California looks or has now started looking at this particular industry yet. I know when I was up in Sacramento with the Free Speech Coalition for Lobbying Days, one of the things that I heard often from the legislative aides or the legislators themselves was when was the industry going to start treating the actors and performers in a manner more accustomed to that of an employee?

They didn’t use those specific terms, but they also talked — a couple did mention workers’ comp, some did mention health benefits. So the prevalent attitude in Sacramento is that the industry has to do something for these people and stop making them “throwaway” employees.

California, by nature, has always been a very pro-employee, anti-employer state. Especially with the [mainstream] entertainment business also residing here, no one on that side wants a precedent set on the adult side to be detrimental to their business.

The state of California has gone a long distance in protecting performers — misappropriation of likeness is another where the state Legislature has gone. They protect performers in this state. And when they use the word “performer” or “actor” or “actress,” they don’t have a little footnote that says, “only mainstream.”

So what this industry, I think, has failed to do is to see how it’s done in the mainstream world and try to put into place those standard business practices of the mainstream industry in the adult industry. I think this industry is ignoring the fact that they are employees, not the state of California.

The best way to look at this is there was an HIV outbreak in the industry several years ago. Cal/OSHA came in and they fined those companies for not having the proper procedures in place. And while a Cal/OSHA review is not the same as a workers’ compensation review or a civil court review, it does lead me and probably anyone else in this industry with a background in workers’ compensation to think that all of those actors and actresses involved have valid workers’ compensations claims, because they were basically deemed “employees.”

XBIZ: Is there an advantage to having employees as opposed to independent contractors?

FATTOROSI: You’d rather have the employee be an employee than an independent contractor.

At the end of the day, if they are an independent contractor, that means they can sue you civilly, which will provide a much higher reward than to an employee seeking workers’ compensation. In fact, getting workers’ compensation benefits limits your actors, your stage and crew people to what they can recover. Not having it opens the door for them to sue you civilly.

No employee wants to be considered an employee because it limits the amount of benefits they recover. Everybody would want to be an independent contractor because then you could sue your boss for literally hundreds and thousands of dollars in punitives — pain and suffering, all of that — so you want these people to be employees.

That’s the message that has to get across to the studios, that you don’t want them to be independent contractors. Saying that they’re independent contractors opens you up for a lot higher amount of damage than you would worry about if you were paying workers’ compensation benefits.

In part two of our interview with Michael Fattorosi, he talks about the benefits of workers’ compensation insurance coverage, adult vs. mainstream business models and the potential scenarios that might spur state regulatory agencies into investigative action.