I recently let go of a band member who wasn't working out. Our record has not yet released, and was crowd-funded (which was set up solely in my name). The band as a business is a sole proprietorship in my name, and all taxes are filed and paid through that. Our business bank account is under my name for my SP. He is not a "founding member". Also, all band bills (insurance, van payments, etc) are in my name and paid through my SP business account. I am the sole writer on all songs. We've never signed a band agreement (foolish, I know), and no one was paid for performance. I paid a small amount as a sort of "severance" but never officially called it that. He has no fiscal investment in the band.
He's considering legal counsel to prevent the record release with his performance. Thoughts?
The band is not likely a sole proprietorship (i.e. entirely yours), but rather a partnership that you effectively dissolved by letting a member go. The partnership now needs to be "wound up" on an appropriate basis and the assets equitably distributed and the new partnership established. I take it you are the business manager. Apparently you are like so many band managers, not very thorough and now paying the price when the inevitable split happens. Although you are the sole writer on all songs, you likely have enough documentation that there exists a written trail proving that the songs become partnership property. You say you paid a severance, but likely you never got anything in writing on that either.
Thoughts, you ask? My thoughts are about YOUR thoughts. My thought is that it's now crucial that you act on your thoughts about getting that entertainment lawyer that you should have gotten at the outset when everyone would have signed a band agreement that would have avoid these problems. Since you admit that was foolish, stop being foolish and "get 'er done". Your lawyer, once hired, can likely call in the former band member, with or without his legal counsel, and likely work out a deal and, imagine this, put it in writing. Then the lawyer can get your current band to all sign off on a new agreement so you don't have deja vu when the next band member quits or is tossed out. What would be worse than foolish is not learning your lesson from this experience. Those who don't learn from their mistakes are at risk to repeat them.
I doubt the former partner can stop the record release, unless the distributor balks due to the controversy, but the departed partner is going to be entitled to a share of the royalties, if any.
If you are in Nashville, there are a bunch of good entertainment attorneys. If you want a recommendation, just call one of us and ask or use the Find A Lawyer tab and make your best guess.
It appears from your facts that you are in the clear from any major issues with his departure. The key here is that you have him sign a work for hire musician release. You may want to investigate the amount you paid him as a severance as you called it. You may want to incentivize him further by supplying an additional sum related to his services as a hired session player on the unreleased album. You need to contact an entertainemnt attorney to draft you the agreement to protect yourself.
My colleagues are correct, absent a written document stating so, you are not the sole owner of any intellectual property that you created in conjunction with others. You should consult with an entertainment attorney to asist you, not only in cleaning up your mess with the former band member, but also assisting in forming a new legal entity and drafting a band agreement for all current members to sign and adhere to moving forward.
Ivan Parron, Esq
I don't believe he will be able to enjoin you or your record company from releasing the sound recording. But he could assert a claim for financial damages. And, as one of the other attorneys noted, a record company could be reluctant to release a sound recording that has legal issues. Lots of "ifs" here, which it make it in your interest to settle his claims against you. Don't bands usually share the royalties from the sound recording? What was your understanding about it? That may be a good basis for settling his claim.
I was just involved in a similar dispute recently, and it's important for you to look the situation as involving two separate issues: (1) Is he entitled to part-ownership of the sound recording copyright; and (2) Can he prevent the release? These are two different issues.
The ownership and 'work for hire' issues etc. mentioned in the other attorney answers pertain more to the issue #1 mentioned above. The departed band member would be a co-author/co-owner of the sound recording so long as he performed on the recording and : (1) Was not an employee for purposes of the recording; and (2) Has not assigned his rights in the recording to you. Your payment of taxes, band bills etc. is not relevant to the ownership issue.
But, as far as issue #2, even if for sake of discussion he is a co-owner of the sound recording copyright, any co-owner of a sound recording copyright can commercially exploit the recording and issue non-exclusive licenses without the consent of the other co-owners (assuming that there's no contract between them to the contrary). But if such a co-owner does so, he or she is obligated to account to the other co-owners for their share of any profits made, and to pay them their share of those profits.
There is one notable exception to this general rule: If it's to be the first released recording of a composition, and if the person or company with "first use" mechanical rights does not consent to the release of the recording, then it cannot be commercially released. But that doesn't seem to be your situation, so long as, and I'm assuming this is not the case, the person opposing the release does not own an administrative rights in the underlying musical composition.
And so, whether or not he is a co-owner of the recording, he is not entitled to prevent the release of the recording (assuming your question contains all relevant information, that you own and control all publishing rights regarding the underlying musical composition ("the publishing"), and that there is no agreement between the parties to the contrary).
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