5:51pm PT by Ashley Cullins
LMFAO Wins California Labor Commissioner Fight With Ex-Manager
LMFAO will be laughing all the way to the bank after the California Labor Commissioner awarded a major ruling in its favor in the group's fight with its ex-management firm.
The legal battle began in 2012 when Stefan and Skyler Gordy, LMFAO's RedFoo and SkyBlu, were sued by RPMGRP and Rene McLean for allegedly failing to pay $7 million in fees. The duo fired back by telling the labor commission that McLean was procuring work for them without a license in violation of the Talent Agencies Act.
LMFAO asked the labor commissioner to void their management agreement and order McLean to return fees paid in the year prior to the filing of the action. Meanwhile, McLean admits the firm procured employment in violation of the Act but argued that it also performed other services for which a license is not needed and the commissioner should allow it to collect fees for that work.
The commissioner sided with LMFAO, finding that McLean violated the Act at least 136 times.
"Respondents put in place a system whereby their employee negotiated the terms of the artist's performance agreements and finalized the deal to the point where the agreement was sent to their unlicensed booking agent, who put the writing on his letterhead in an effort to lend the appearance of compliance with the Talent Agencies Act," writes labor commission attorney Michael Jackman.
Because of the "number, frequency and extent" of the violations, the commissioner declines to apply the equitable doctrine of severance and allow the firm to be compensated for its lawful service.
"The evidence is clear Respondents not only acted in complete disregard for the licensing requirement, but also contrived a scheme to cloak their actions with the appearance of legality by engaging a booking agent to memorialize performance contracts that they had procured themselves," writes Jackman.
California Labor Commissioner Julie Su signed off on the determination on Aug. 29, rendering the agreement between LMFAO and McLean illegal, void and unenforceable and ordering the firm to repay nearly $60,000 in fees.
LMFAO was represented by attorney Ed McPherson, who sent The Hollywood Reporter a statement Tuesday: "In my decades of handling Talent Agencies Act matters and acting as an expert witness, I have never before encountered a manager who violated the Act so callously and so frequently.”
RPMGRP has not yet replied to a request for comment.