More than 60 Free Speech Coalition members braved the smoky terrain of the West Valley to attend a general meeting in what Executive Director Michelle Freridge described as the Coalition's "ongoing efforts to provide information that will be helpful to our members in running their businesses."
The meeting was held in a ballroom at the Warner Center Marriott on Oxnard Ave., and after a half-hour of socializing between members, Freridge introduced the evening's first speaker, attorney Michael Fattorosi, who discussed some of the pitfalls of workers compensation insurance as applied to the adult video and Internet industries.
"The definition of 'employee' is very broad," Fattorosi said, noting that the Workers Compensation Board and other state agencies "bend over backwards to find that people are employees rather than independent contractors."
The employee vs. independent contractor issue has been acute in the industry since four HIV-positive performers were discovered in the spring of 2004, a situation that led to several public hearings by state and local representatives and health officials and eventually the issuance of citations against two adult production companies for failing to follow standards set by the California Occupational Safety & Health Administration. The citations, however, would only apply if the HIV victims were employees of the companies; a status that has yet to be determined under the law.
But the issue is in fact far broader than that, with Fattorosi noting that if inspectors from the state's Department of Industrial Relations were to find that an adult company (or any company) had failed to provide workers compensation insurance for its employees, the inspectors could issue a "stop order" that would immediately force the business to close down until such insurance were obtained.
While acknowledging that workers comp is quite expensive, Fattorosi explained that one of the benefits of having the coverage is that it prevents employees from suing for punitive damages in the event of a work-related accident – and he further noted that even a minor injury such as a torn shoulder muscle could easily bring a $150,000 award to the victim, while a spinal injury could bring three times that amount – and an HIV infection could send that figure into the millions.
Fattorosi handed out several documents, including an FAQ from the Department of Industrial Relations (DIR) that attempts to distinguish which workers are employees versus which are independent contractors – the document can be found at www.dir.ca.gov/dlse/FAQ_IndependentContractor.html – as well a California appeals court decision involving whether a Hollywood extra taking part in a movie shoot was an employee and a letter from the DIR on the same subject.
The audience had plenty of questions for Fattorosi, and one general theme of his answers was that often the test of whether an individual is an employee or an independent contractor is how much control the person in charge of the work has over that individual. Generally, the more control exercised by the person in charge, the more likely the worker would be deemed to be an employee.
Insurance agent Greg Zeboray also noted that the production insurance that he sells is not the same as workers compensation insurance, and that a producer may need to have both.
There was also discussion that many performers are now incorporating in order to maintain their independent contractor status, so that a production company, in order to use an actress, will actually be hiring her corporation.
The evening's second speaker was attorney Jeffrey Douglas, the FSC board's chair and one of the two attorneys on the board who are overseeing FSC's lawsuit against the recordkeeping and labeling law, 18 U.S.C. §2257.
Douglas brought the audience up to date on the status of that suit: That Judge Walker D. Miller, who had said at the preliminary injunction hearing on Aug. 2 that he would expedite his ruling on the issues presented, still has not issued that ruling, and that the temporary injunction worked out between FSC and the Justice Department is still in force. He said that he expects that the agreement will be renewed each month until an opinion is issued.
Douglas discussed the reasons why the lawsuit was brought in the Tenth Circuit (Denver); namely that that was the site of the industry's win against 2257 in the Sundance Associates v. Reno case, which established that the category of "secondary producer" in the 2257 regulations was not in keeping with the law passed by Congress, and therefore that designation was void. Douglas said that Judge Miller was "required as a matter of law" to follow that precedent, despite the government's arguments that such was not the case.
Douglas also explained why FSC was challenging the entire 2257 statute.
"It presumes that every product that's put out into the marketplace is child pornography unless you disprove it," he said. "There's something fundamentally wrong with that. Moreover, you can't just disprove it; you have to disprove it the government's way. That's another due process problem."
Another problem with the law, besides improperly shifting the burden of proof to the potential defendant, is the fact that since mere nudity is excluded from the recordkeeping requirements – a sop to Hollywood, which shoots a lot of nudity but generally does not shoot explicit sex – 2257 is nearly completely ineffective in stopping child porn (its avowed purpose) since "95-plus percent" of child porn, according to Douglas, is mere nudity, not explicit sexual action.
Douglas stressed that as the case progresses, more industry personnel will be needed to come forward and tell the court how 2257 has adversely affected them.
"We need actual injured parties," he said. "We have to get people or businesses that were damaged by 2257 to come forward. ... It may well be that this case will go to trial ... and if it goes to trial, we are going to be trolling for witnesses, people who are harmed so we can show that it's not just a couple of individuals."
While noting that the Justice Department has back-pedaled on some of its 2257 requirements, Douglas described how, at the same time, anti-adult conservatives in the House of Representatives have introduced a bill titled the Child Pornography Prevention Act of 2005, which moved quickly through Congress and has been added to the Children's Safety Act of 2005, which passed the House in just two days and is now before the Senate.
"This [issue] is something that is going to be hanging over our heads, that we're going to have to live with," he warned. "The safest advice to give is, comply to the extent that you can consistent with your business model; recognize that even though we have this agreement, or even if we get an injunction, that there's still risk in ignoring the law. On the other hand, the law is something that is unbearable, something that you cannot live with."
Freridge stressed the importance of FSC's presence in Washington, noting that legislators in California already call Free Speech when writing legislation that would affect the adult industry, and hoped that our lobbyist in the nation's capital might be able to have some input in federal legislation.
