'American Idol' Winner Phillip Phillips Settles Big Legal Dispute With Producer

Phillip Phillips PR 2013 L
Nick Walker

Ahead of the relaunch of American Idol, one of the show's primary producers has settled a significant legal dispute with season 11 winner Phillip Phillips, The Hollywood Reporter has learned. 

In January 2015, Phillips challenged "oppressive" contracts he signed as a condition for competing on the singing competition show. He lodged a petition with the California Labor Commissioner asserting that 19 Entertainment and its affiliated companies had "manipulated" him into accepting jobs that were of benefit to the company and its affiliates rather than to him. He claimed that 19 Entertainment was breaching fiduciary duties as well as violating a California law that says only licensed talent agents can procure employment for clients. The legal maneuver held ramifications for producers attempting to take a piece of reality contestants' post-show earnings.

19 Entertainment later declared bankruptcy after Fox's cancelation of American Idol. In bankruptcy court, the producer filed a $6 million lawsuit against Phillips for allegedly holding onto some of its money and repudiating and breaching contracts. A bankruptcy judge, though, decided to let the Labor Commissioner make a ruling as to whether 19 Entertainment had violated California's Talent Agencies Act.

With a determination still pending, and after 19 Entertainment came to a separate deal with FremantleMedia Limited that paved the way for a reboot of American Idol on ABC, a settlement with Phillips was worked out. The parties are expected to file a stipulation in court soon and announce an amicable resolution without details about the agreement.

The settlement could clear legal clouds as the show's producers attempt to monetize their relationship with aspiring singers. American Idol is known as being one of the more expensive productions on television.