Labor Commission Hearing Pits Nadya Nabakova Vs. Direct Models

LONG BEACH, Calif.—Yesterday, adult actress Nadya Nabakova was given a forum to air her grievances against Direct Models, Inc. and owner Derek Hay in a hearing before Max Norris, an attorney with the California Labor Commissioner's office acting as hearing examiner. Representing Nabakova was Courtney L. Puritsky, while Direct Models and Hay were represented by Joseph Baldivia, who was the attorney doing the questioning, and David Pierce. The hearing—which Norris described as "informal," though both witnesses were placed under oath—began just after 10 a.m.

As AVN previously noted, Nabakova filed her complaint with the Labor Commissioner last January, and Tuesday's hearing was largely a "she said/he said" affair, with the decision in the case likely to revolve mainly around whether or not Direct Models (better known in the adult industry as "LA Direct Models") and/or Hay violated the California's Talent Agencies Act, since although it's currently based in Las Vegas, Direct Models is chartered in California.

Though no ruling has yet been issued—the examiner will issue one within 30 days after the two attorneys submit closing arguments in writing by Monday—the hearing covered many points of interest to agents and performers in the adult industry.

After both sides gave brief opening statements, Puritsky began by questioning Nabakova about how she came to contact Direct Models ("DM") in the first place, by email in mid-September of 2017, and about the agreement and several addenda that she eventually signed with the company, of which she said she was not given copies. Besides the contract for representation itself, which would run for a term of five years at 15 percent commission (reduced to 10 percent if she provided her own transportation), Nabakova also signed a rental agreement to rent a room at Hay's "model house" in Los Angeles (which agreement Nabakova pointed out was distinct from the representation agreement), as well as documents relating to "kill fees" and how changes in Nabakova's appearance would affect her representation agreement. It was pointed out later that only the representation agreement itself bore a stamp of approval from the California Labor Commissioner, as required by Labor Code Sec. 1700.23.

Nabakova further testified that when she went on shoots, sometimes she would be paid on the set and sometimes the studio would later send a check to DM, which would then pay Nabakova less its commission, and that she always paid her room rent in cash. She also noted that DM would offer her work by text message, and if she accepted, details of the assignment would be texted to her by a company employee the day before the shoot. Some of her earliest assignments were for, and

According to Nabakova, the first sign of trouble with this relationship occurred during her second assignment, which was a POV scene with someone she described as an "amateur," and that after stills had been taken, she was left alone in the room with the performer/videographer, a situation which she said made her feel unsafe. Her lawyer argues that this may be a violation of Code Sec. 1700.33, which states that agencies may not send clients ‘to any place where the health, safety, or welfare of the artist could be adversely affected.”

Moreover, Nabakova found it strange that after the scene had been completed, her sexual partner asked her for a date—and for her phone number. He also apparently admitted to her that another actress had had trouble with him.

But apparently, things came to a head shortly after DM sent Nabakova, along with three other models, to what she described as a "poker party" being held at a mansion in Los Angeles. When she got there, she said, she found 50 to 100 people in attendance, most if not all men, many of whom became drunk and/or high on drugs as the evening progressed—another situation in which Nabakova said she did not feel safe. Although the DM models were hired to be topless "eye candy" at the party, Nabakova said that various men offered her drugs and tried to grope her, offering "tips" to allow them to do so. She also noted that two of her fellow models put on a girl/girl show for the attendees—and that they were "molested" for their trouble.

Still, Nabakova kept quiet about her concerns until December 5, when she was offered a gig at a similar party, a karaoke event being thrown by an acquaintance of the host of the poker party—an offer she refused. She discussed her poker party concerns with Hay the following day—reluctantly, because she feared that if she made trouble, she would be offered less work—and indeed, she reported that at one point in their conversation, Hay suggested that perhaps this was "not her type of work." (Hay later stated that he was referring to "work" similar to the poker party gig, but Nabakova said she took the phrase to mean any kind of sex work, including adult movie performing.)

Also at some point in the fall of 2017, Nabakova arranged what she described as a "content trade" with another performer named Owen Gray. This consisted of a photo session, Nabakova and Gray doing a boy/girl sex scene, and Nabakova herself doing a solo scene. No money exchanged hands, but each participant was allowed to use any of the material on their own website and in other promotion. According to Nabakova, when Hay learned of the "trade," he wasn't happy.

Things finally came to a head on December 6, when Nabakova sent Hay an email seeking to sever her ties with the agency. While AVN was not provided with a copy of the email, Nabakova read some of it out loud, and in it, she complained about "some of the activities" that DM allegedly engaged in, including allowing its models to be used as escorts. However, Nabakova made it clear that she herself was never asked to escort. In any case, Hay never responded to this email, but she was informed that DM would not release her from her contract.

One of Nabakova's main complaints, however, was regarding monies due her for work performed and what she believed were improper deductions taken for, among other things, the content trade she had entered into, which DM valued at $1,000, and an advance charge for three months of rent on her room at the model house—something Hay/DM had never done previously. This happened on January 3, 2018, when Nabakova was planning to use the funds to return to Texas, where she had been working in animal rescue, and as she recalled the situation, she began to cry, stating that the lack of funds meant she could not be there for the death of her cat, which had been ill for a while.

After about an hour of direct examination, Joseph Baldivia began his cross by noting that it was Nabakova who had sought representation by DM and not the other way around, and that no one had forced her to stay at Hay's model house. He then delved into some of the details of some of the documents she signed, noting in particular one titled "Agency Rules," which was not made available to AVN, but which apparently requires DM models to contact the agency regarding any disagreements, and another noting that DM is the model's "exclusive representation," a clause that might be interpreted to ban content trades. It is unclear whether the "Agency Rules" were approved by—or in fact needed to be approved by—the Labor Commissioner.

Baldivia then asked for more details about the poker party, noting that Nabakova had attended a topless event prior to that party with no apparent problems. However, Nabakova said she was given no details as to what to expect at the poker party.

Baldivia spent some time going over an accounting document Nabakova said she received in early March, and discussed various work assignments for which she claimed not to have been paid, for a total of $2,300.

Nabakova testified that she had not accepted a job from DM since December of 2017, and that she had been booking jobs on her own since then, although DM did offer her work in early March, and again on July 30, the day before the hearing. Nabakova said she'd gotten about a dozen jobs on her own, earning her about $15,000, but did not inform DM of either the jobs nor the payments received since she considered herself no longer under contract to the agency. She said she used the money for rent and other expenses, but that she had received the money too late to fly to Texas as she had previously planned.

Nabakova also charged that "industry people know" of Hay's connection to the escort site The Luxury Companion (TLC); that other models had said the same, and that she had overheard one of DM's drivers talking about it.

Baldivia then questioned Nabakova about a "model trade" that Hay had tried to work out with Motley Models, where they would represent Nabakova in exchange for a Motley model coming to work for DM. Though Nabakova apparently originally agreed to the trade, it never worked out—Hay later said the Motley model declined the trade—and Nabakova testified that though she has no problem with working in adult content production, she would not want to sign with another talent agency, and that she has been self-booking since February. Later, she stated that an email from DM had stated that she wasn't available for work—and asked her to consider settling her dispute without an official hearing. Moreover, regarding the July 30 work offer, she stated that she "didn't like this content anymore" and that she had told Hay that in refusing the job.

Nabakova then provided more details regarding the content trade with Owen Gray, noting that she sold the trade material through her OnlyFans account and didn't believe she owed DM any of those revenues.

With Nabakova's testimony completed, Baldivia began his direct examination of Hay, who testified that he had been a talent agent for more than 15 years, and that about 80 percent of the jobs he booked for his models were in the L.A. area, though he also scheduled jobs in Las Vegas and Florida. Baldivia had Hay retrace the beginnings of his business relationship with Nabakova, from her signing the representation agreement to the jobs she booked herself, for which he/DM expected to be paid commissions.

Regarding the poker party, Hay testified that he had been supplying topless models to the event for 10 years, that he'd never heard a complaint about it from any of the models, and that he never provided security for the models—in fact, that he rarely provided security for such events in the U.S., though he had sent some south of the border on occasion for events in Mexico.

Regarding the POV shoot, Hay said that Nabakova had never expressed any discomfort with it to him, either before or after it happened.

Regarding the "content trade" with Owen Gray, Hay began by calling Gray a "predator" who "exploits models," and claimed that the man owned a studio, which in his mind meant that his filming and having sex with Nabakova was not a "content trade," which he defined as "almost always between two female models," though he admitted that there might be situations where two models would hire a male performer for a boy/girl/girl scene.

"It makes no sense to trade with a male model," Hay declared, and since in his mind Gray was himself a studio, their shoot amounted to "an exploitation of the model," and that there could be no "trade" between a model and a studio.

Looking at the statement of account which DM had provided to Nabakova, Hay defended taking the model house room rent for January, February and March out of the funds Nabakova had earned for shoots, though he noted he refunded some of the March rent because she had moved out and he had found another renter for the room.

After some more discussion of DM's accounting document, Baldivia asked Hay to comment on the allegation that he or DM was running an escort agency out of DM. Hay vehemently denied such an arrangement, and declared that he doesn't send models to escort—and that in fact he had sued an escort agency (later identified as being owned by Trinity St. Clair) for approaching his models, and that the suit had been settled.

"We don't book any escort work," he stated. "We never send models for escort work."

After the lunch recess, Baldivia asked Hay why he felt the agreement with Nabakova went south. Hay traced the beginnings to the poker party—and his belief that Nabakova wanted to terminate the agreement, in the process declining further jobs offered by DM. As to the POV shoot, Hay said he was unaware of any problems with it, and after explaining to the hearing examiner what "POV" is, and why it's legal under the California Supreme Court's 1988 Freeman v. California ruling, Hay went on to claim that DM doesn't permit any POV shooter to be alone with a DM model. It is unclear from looking at Nabakova's page whether that POV scene was ever released commercially, and Hay noted that if it were not, the male POV participant and the model might be accused of participating in prostitution, and said, "We don't wish to be involved in something questionable." He further said that if he had known that the shooter would be the only other person present, he would have informed him that others needed to be there as well, and that DM might choose not to work with him in the future.

"We don't work on the fringes of the industry," Hay said, noting that the agency had chosen not to work with certain producers in the past.

In response to Baldivia's questions, Hay then discussed the poker party further, reiterating that he'd never heard any complaints about it, but noting that afterwards was when Nabakova indicated she wanted to terminate her contract. He also said that the actress indicated that didn't want to "create any bad blood" with DM, but that she later bashed the agency on Twitter. Baldivia then produced several exhibits reproducing some tweets Nabakova had written—though later, in cross examination by Puritsky, Hay noted that the first such tweets were dated May 31. Hay said neither he nor DM had responded to the tweets.

Finally, Baldivia referenced a document described as a "Written Authorization to Pay Off Other Debts," which apparently allowed DM to cash checks made out to Nabakova for work done under the DM agreement, and when Baldivia asked if that document would allow DM to withhold funds to, for instance, pay off a hotel bill that Nabakova had incurred, he said it would, though he denied that such a situation had ever happened with her. He also said it would allow him to use the scene payments to pay off other debts she had incurred, though under cross examination by Puritsky, he seemed to contradict that statement.

On cross, Puritsky delved further into some of the situations Nabakova had testified to, with Hay reiterating that he had not heard anything negative about the POV shooter. However, when Puritsky brought up the fact that DM had in fact booked a shoot with Gray, Hay explained that he had been unaware that Gray had been hired for the scene.

Puritsky also questioned Hay about the "model trade" that Hay had arranged with Motley Models, and asked if the agreement included clauses requiring that Nabakova not disclose anything about her experiences with DM/Hay, and also include a release of all claims by Nabakova against DM/Hay. Hay said he was unaware of such clauses.

After Puritsky had completed her questioning, Baldivia had a few on redirect, most relating to the poker party. Hay reiterated that he was unaware that there had been any problems at any of the prior poker parties to which DM had sent models, and in response to a question, noted that DM represented about 70 women and 20 men at the time of the November, 2017 party; that DM does retain schedules indicating which models were working where, but that he couldn't recall for what jobs Nabakova had been booked over the past year.

At that point, hearing examiner Norris stepped in with a few questions, mostly about what sorts of security DM would provide for models in different situations. Hay testified that for an event like the Adult Entertainment Expo, he would expect AVN to provide its own security, and would likewise not provide it for an event like Adultcon. As for the poker party, since it was a private and not a public event, he again would not provide security, especially since no sex would be taking place. Norris reminded him of the girl/girl show that Nabakova had testified to, but Hay responded that it had been unplanned, and that "No one can predict what may happen on a given day," and again reiterated that he had never been made aware of any problems at any previous such party.

Baldivia then asked what was expected of the models supplied to the party. Hay said they were instructed to wear makeup, look pretty and be topless—like every year—and that no sexual acts had been booked or expected.

After having Hay note that he offered Nabakova work even after her disparaging May 31 tweets, Baldivia's final question was whether Hay and his agency abide by the Talent Agency Act. Hay answered in the affirmative, adding that the ancillary "agreements" which Nabakova said she signed were all part of the same representation agreement.

With that, the hearing concluded. Both parties agreed that they would submit closing arguments in writing by end of business on Monday, August 6, and that Norris would make his ruling(s) within 30 days of that date.

Pictured: Nadya Nabakova