What You Need to Know: In early 2022, California Assembly member Ash Kalra introduced A.B. 2926–a.k.a. The FAIR Act–a bill intended to close a loophole in Section 2855 of the California Labor Code otherwise known as the “Seven Year Rule.” The Rule prohibits the enforcement of a personal service contract beyond seven years, but the loophole excludes musicians and actors from the law’s protection. Worst still, the existing law allows record labels to recover damages if an artist leaves a recording contract.
The new law removes the prohibition on invoking the law for musicians and actors. The new law puts a cap on record label option periods of nine months. An artist would be permitted to terminate a recording contract if the label had not exercised an option within nine months of the initial commercial release of an album.
MAC’s Perspective: MAC passionately supports this much-needed change, which empowers artists and allows them to share their creations with the world. For nearly four decades, the recording industry has used a loophole in the law to deprive artists of fair deals via unfair competitive practices. MAC joins SAG-AFTRA and other like-minded organizations serving the interests of the creator community in urging the California Assembly to pass A.B. 2926, The FAIR Act.