LA Direct Models Responds to Nadya Nabakova Calif. Labor Commissioner Decision

Talent agent Derek Hay mulls appeal

Los Angeles, Calif — Wednesday, a little-known adult model named Nadya Nabakova announced via Twitter that she had prevailed before the California Labor Commissioner’s Office in her administrative complaint against talent agency LA Direct Models and its owner, Derek Hay.

LA Direct Responds Nadya Nabakova Calif. Labor Commissioner Decision
Nadya Nabakova

 

Hay, on behalf of LA Direct Models, issued a statement Thursday, which is reprinted in full below.

But first, a bit of background on the case:

Nabakova, 25, (now calling herself Bunny Colby) signed a contract for exclusive representation with LA Direct (a licensed and bonded talent agency) in late 2017, and complained to the Commissioner’s Office earlier this year (per AVN‘s recap):

that Direct Models had violated its contract with her by 1) failing to provide Nabakova with a copy of the contract and various addenda which she had signed upon joining the agency; 2) sending her (along with several other women) to be a topless “ambience model” at a poker party at a Newport Beach mansion where she was solicited for sex and groped; 3) sending her to a POV shoot [where she was left] alone in the room with the shooter/”talent”; 4) charging her an agency fee for a “content trade” shoot; and 5) withholding money from earnings she was due, in part because she owed Hay personally for rental of a room at his “talent house.”

As to allegation 4, not long after signing her exclusive contract with LA Direct, Nabakova arranged what she described as a “content trade” sex shoot with performer Owen Gray, as well as a photo shoot and solo scene.

In content trade scenarios, no modeling or performance fees exchange hands, but each participant gets to use the resultant material for their own profit.

At the August 1 Commission hearing, AVN‘s Mark Kernes reported, Hay referred to Gray as

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” . . . .

“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.

Regardless of one’s opinion of Gray, from a business point of view there is indeed a good deal of logic to this construction. Consequently, Direct Models informed Nabakova that it valuated her performance for and with Gray at $1,000, and that she owed a fee totes agency based on that amount.

As to allegation 5, specifically what happened was, when Nabakova sent Direct Models a statement for earnings owed, the agency deducted her unpaid rent from the amount due.

The Commissioner’s decision

Wednesday, Oct. 17, Labor Commissioner Max D. Norris found for Nabakova, noting that some of the addenda to the model contract had not been officially approved by the Labor Board, and that LA Direct had improperly deducted monies that Nabakova likely in fact owed to Hay.

In other words, the process by which LA Direct and/or Hay collected was the issue, not necessarily the validity of Nabakova’s debt.

The Commissioner found that LA Direct Models had wrongfully withheld $2,775 for the rent due, and also disallowed LA Direct’s $250 charge for the content trade.

Rhett Pardon’s article at XBIZ originally asserted that “The state’s attorney also found that LA Direct Models wrongfully withheld . . . $200 for photos she had taken by a friend,” however Hay clarified via email:

The images were shot by a professional photographer at our behest, to obtain professional images of the model with which to promote and obtain employment on her behalf (she was a brand new model)– which is usual for most agencies,

The final bill was $400 which we expected, and we offer to pay half of this and charge the model half, (which is not usual, as most agencies charge back the full amount). The Labor Commissioner found we could not charge her anything for these photos.

The XBIZ article has since been corrected.

As for the alleged poker party incident, Norris wrote, “A reasonable agent upon reasonable inquiry would have realized that this situation required security, and would have either secured assurances during procurement that the party’s host would provide security and provide that information to the artists or would have sent the artists with security provided by the agency.”

In all, Norris awarded Nabakova $3,500, as well as attorney’s fees, and Nabakova was released from her contract.

Thursday, in response to the decision, LA Direct Models issued the following statement, obtained by MikeSouth.com:

Direct Models is obviously very disappointed at the decision from the Labor Commissioner.

The case is twofold in nature, with one being financial and the other being centered on allegation of more than one set being an unsafe work environment.

On the financial element, it is likely similar in mainstream television and feature film and perhaps even sports, whilst very common in the adult film industry that agents forward, advance and arrange, significant value in goods and services in the furtherance of enabling an actor to begin work, such as flight, test, professional images, and accommodation.

If these advanced expenses cannot later be recouped from the earning of the actor, it has a chilling effect on the agency’s ability or inclination to do similarly for aspiring new actors again, as one imagines it would for other agencies who work in similar fashion.

With regard to the latter half of the case:

The allegations made, that the actor worked on sets which had an unsafe work environment, were solely that – allegations and statement from the actor, and lacked any supporting evidence of same, including any statement from any witness of any of these occurrences, including any other actor or production staff member on the same sets.

Thus it is / was, very much a She said / She said.

In the current era, it has become commonplace that mere allegation is sufficient to assume wrongdoing on the part of the accused.

In part, one of the actors’ statements was found to be sound in this decision because a director allegedly asked her on a date at the conclusion of the shoot. We are left pondering how we can ensure this does not repeat.

In another, the actor’s statement that the set was unsafe was found sound also, because it was accepted she was alone with the actor / director of a POV scene, which Direct Models actually prohibits, but which is not uncommon in the adult film industry.

We certainly have the right of appeal to Superior Court in a Trial De Novo, where the evidentiary thresholds are much higher and the case has to be more significantly proven, than in the administrative hearing just concluded.

We are considering our options with regard to appeal therefore.

Now, it behooves us to amplify one important point to which LA Direct’s statement alludes without spelling out in detail: in the adult business, and in the broader entertainment industry to some degree, agents typically find themselves in a situation where their performer clients continually owe them money for commissions or fees, and not one in which they owe their clients funds from their earnings. A performer carrying a running balance for agency fees constitutes the rule, not the exception.

Having a degree of control of a performer’s earnings offers the agency greater operational funds, as well as leverage in terms of the ability to offset the performer’s running debt. It is in fact common practice for agents to find ways to offset advances and legitimate debts.

We will update this story as necessary.

4 Replies to “LA Direct Models Responds to Nadya Nabakova Calif. Labor Commissioner Decision”

  1. LurkingReader

    Too many cases on the books for them to appeal this.

    On the fiscal side we had some great debates here a couple years ago about the need for agents to clearly distinguish roles and fees for acting as banker, landlord etc as distinctly separate from the ‘commissioner approved agency contract’

    “Having a degree of control of a performer’s earnings offers the agency leverage, or the ability to offset the performer’s running debt. It is in fact common practice for agents to find ways to offset advances and debts.”

    That quote is the essence of the issue. Courts will tell them to pound sand…here are some forms to file case in small claims court…good luck serving your debtor.

  2. Karmafan

    “Having a degree of control of a performer’s earnings offers the agency leverage, or the ability to offset the performer’s running debt. It is in fact common practice for agents to find ways to offset advances and debts.”

    Isn’t that what Lords did to their serfs in the middle ages to keep them poor and in debt to the Lord of the land?

  3. xxxReporter

    Karmafan, I’d agree if the sentence read “Having complete control over a performer’s earnings,” or if performers did not constantly carry running balances for unpaid agency fees.

    The issue here seems to be that LA Direct cut a corner vis-à-vis recoupment, not that the underlying debts for rent were improper. As for the debt re: promotional photographs, I don’t think this decision has any basis in the reality of how talent agencies operate, as Hay stated above.

    As the bard wrote, “Neither a borrower nor a lender be”.

  4. LurkingReader

    This decision is either the beginning of self-regulated change or more government regulations once additional adversarial rulings happen.

    I see ‘payday’ lending and ‘rental deposits’ on separate documents happening very quickly. Agents will set up subsidiary corps to issue docs and will use docs for no-show judgements and/or write off loses as ‘bad debt’ if they have a decent tax preparer.

    With a similar case pending it would surprise me if this was appealed because it opens too many cans of worms. As much as agents won’t like this situation, it as one more step to legitimizing porn (sex-work) as a regulated industry. Appealing this agents will absolutely lose on the fiscal aspect and risk losing the current status quo on the workplace safety issues.

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