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March 11, 2014 | EntertainmentFrom the blog

SAG-AFTRA’s New Code Of Ethics Could Seriously Affect Management Businesses

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Jari Wilson

Associate Attorney

On March 4, 2014, SAG-AFTRA enacted its Personal Manager Code of Ethics and Conduct to “better promote an honest and ethical relationship” between the Union’s members and their managers.

By signing the Code, personal managers pledge to uphold a number of practices, from serving in good faith, to maintaining confidentiality and privacy in client dealings.  Adopting the Code is completely voluntary and Managers who comply are added to the Union’s official list of representatives and gain assistance from the Union for dispute resolution.

Several groups, including the Talent Managers Association, an organization mandating ethical and responsible conduct for managers since 1954, have opposed the Code, noting the effects and limitations it will place on management businesses.  Although SAG-AFTRA solicited comments from the Talent Manager’s Association before the Code was adopted, the final version still fails to address a number of the TMA’s most serious concerns.

As a result, the TMA recently announced, “After thoughtful review and consultation with legal counsel—our position is to advise members against signing the SAG-AFTRA code in its current highly restrictive and regulatory form. We stand for the most ethical protection of all actors whose careers we serve.  Often our dedication to an actor comes long before the hope for material compensation or the actor being signed by an agency. Currently, there are counterproductive elements we believe that can be further revised for everyone’s benefit.”

Although there are some advantages to adopting the Code, it contains many regulations that may impose serious limitations on management businesses, including:

Talent Agency

To conform to the Code, a manager must not be licensed by any state as a talent or employment agency.  Such a restriction could seriously affect businesses that provide a variety of services for many different clients in accordance with applicable law.  Managers currently licensed will likely be required to forfeit their licenses to comply with the Code.

Additionally, the Code prevents managers from procuring or soliciting employment without working under the control of a licensed talent agent.  This is especially problematic when working with development talent that is not eligible for agency representation until they have obtained customary media credits or public recognition.  The prohibition, for even incidental (lawful) employment assistance, may impede the talent’s ability to attract qualified agencies.

Contract Limitations

The Code prevents managers from implementing contracts with a Union member over 18 months in duration, and limits renewal periods to 3 years.  Managers are also not permitted to use auto-renewal extensions (in New York, special precautions must be taken when auto-renewal is used).  Additionally, managers who sign the Code are never permitted to charge upfront fees: a restriction that will likely lead to managers selecting only established clients that do not require assistance in attaining headshots, acting classes and other start-up assistance.

Managers are required to (i) submit copies of all contracts between managers and SAG-AFTRA clients, (ii) provide contracts to SAG-AFTRA for approval before the business relationship commences, and (iii) disclose to the Union “any and all professional affiliations.”   These restrictions could be a major pitfall for managers seeking confidentiality in their legitimate business dealings.


The Code also prevents managers from referring matters to other professionals in the entertainment industry, such as acting coaches and photographers, to which the manager has a “direct or indirect financial (or other) interest.”  This vague definition is quite problematic.  Oddly enough, a typical reason for hiring a manager is to gain access to the manager’s industry contacts and connections.  Prohibiting this standard practice of connecting clients to a manager’s contacts (most of whom may have an indirect or other-interest relationship to the manager) may limit the talent’s access to successful professionals.

Arbitration Requirements

The Code requires all disputes between managers and talent be settled in binding Union arbitration, determined by SAG-AFTRA’s general counsel.  While the arbitration clause may save managers litigation costs, the Code requires arbitration regardless of the amount of the dispute.  Disputes over management agreements are not uncommon in the industry.  In a case where the claim is large or substantial, the artist or manager may strongly prefer to bring suit in a court of law.

Given the substantial drawbacks, the new SAG-AFTRA Code needs to go back to the drawing board.  Would you voluntarily sign the current Code?

The views expressed by the author of this blog do not reflect the views of the Talent Manager’s Association or any other third party. 

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