With the emergence of Michigan’s burgeoning film industry comes a new wave of so-called talent agents and managers in the state.  In the entertainment industry, the role of a “talent agent” (or “agent”) is to get his artist-client work, like a personnel agency.  The role of a “manager” (or “personal manager” or “business manager”) is restricted to only giving business and career advice.  The reason for this distinction is that, in California and New York, agents must be licensed and are heavily regulated, whereas managers need not be licensed and are largely unregulated.  Persons acting as legitimate managers in these states, in order to avoid licensing and regulation, are very careful not to procure employment for their clients, even if such procurement were merely incidental to their overall management services.  Managers acting as unlicensed agents in California and New York risk having their contracts voided and, thus, losing all their commissions.

The California and New York regulatory scheme for agents and managers is so well-known in the industry that many Michigan “managers” may be under the belief that they too can avoid state licensing laws by limiting their activities to business and career advice.  They would be wrong.  Michigan’s Occupational Code, MCL 339.101 et seq., recognizes two types of “personnel agencies”.  Type “A” agencies, which are employment agencies that place clients in direct contact with employers (i.e., agents), and Type “B” agencies, which are more in the nature of consulting agencies and assist clients in making basic career decisions (i.e., managers).  Both types require a license in Michigan.  A person operating a Type “A” or Type “B” personnel agency in the state, without first obtaining the appropriate license, is bared from bringing an action in court to collect compensation for their services.

In Hudson v. Mathers, 2009 WL 735857 (Mich. App.), the plaintiff learned the hard way.  The unlicensed plaintiff, Hudson, and one of the defendants, Moore, entered into a management agreement, whereby the plaintiff was to provide Moore with “advice, counsel and guidance” in the development of his career as an artist in the entertainment industry, in exchange for a fee for those services.  Thus, the plaintiff qualified as a Type “B” personnel agency, as defined by the Occupation Code, and was required to be licensed.  No license.  No lawsuit.  No fees.

The Court of Appeals rejected the plaintiff’s reliance on a provision of the management agreement that required the application of Georgia law to the contract, as Georgia had no relationship to the parties and the provision was a transparent attempt to avoid Michigan law.  The Court further rejected the plaintiff’s equitable claims, such as unjust enrichment, because to do so would defeat the statutory ban against lawsuits to recover fees by unlicensed personnel agencies.

The bottom line to Michigan talent agents and managers: make sure you’re licensed.

–Matt