CARDAMONE, Circuit Judge:
Defendants 474431 Associates and Helmsley-Spear, Inc. (defendants or appellants),
as the owner and managing agent respectively, of a commercial building in
Queens, New York, appeal from an order of the United States District Court
for the Southern District of New York (Edelstein, J.), entered on September
6, 1994 following a bench trial. The order granted plaintiffs, who are
three artists, a permanent injunction that enjoined defendants from removing,
modifying or destroying a work of visual art that had been installed in
defendants' building by plaintiffs-artists commissioned by a former tenant
to install the work. See Carter v. Helmsley-Spear, Inc., 861 F.Supp. 303
(S.D.N.Y.1994). Defendants also appeal from the dismissal by the trial
court of their counterclaim for waste. Plaintiffs cross-appeal from the
dismissal of their cause of action for tortious interference with contractual
relations and from the denial of their requests to complete the work and
for an award of attorney's fees and costs.
On this appeal we deal with an Act of Congress that protects the rights
of artists to preserve their works. One of America's most insightful thinkers
observed that a country is not truly civilized "where the arts, such
as they have, are all imported, having no indigenous life." 7 Works
of Ralph Waldo Emerson, Society and Solitude, Chapt. II Civilization 34
(AMS. ed. 1968). From such reflection it follows that American artists
are to be encouraged by laws that protect their works. Although Congress
in the statute before us did just that, it did not mandate the preservation
of art at all costs and without due regard for the rights of others.
For the reasons that follow, we reverse and vacate the grant of injunctive
relief to plaintiffs and affirm the dismissal by the district court of plaintiffs'
other claims and its dismissal of defendants' counterclaim for waste.
BACKGROUND
Defendant 474431 Associates (Associates) is the owner of a mixed use commercial
building located at 47-44 31st Street, Queens, New York, which it has owned
since 1978. Associates is a New York general partnership. The general
partners are Alvin Schwartz and Supervisory Management Corp., a wholly-
owned subsidiary of Helmsley Enterprises, Inc. Defendant Helmsley-Spear,
Inc. is the current managing agent of the property for Associates.
On February 1, 1990 Associates entered into a 48-year net lease, leasing
the building to 47-44 31st Street Associates, L.P. (Limited Partnership),
a Delaware limited partnership. From February 1, 1990 until June 1993,
Irwin Cohen or an entity under his control was the general partner of the
Limited Partnership, and managed the property through Cohen's SIG Management
Company (SIG). Corporate Life Insurance Company (Corporate Life) was a
limited partner in the Limited Partnership. In June 1993 SIG ceased its
involvement with the property and Corporate Life, through an entity controlled
by it, became the general partner of the Limited Partnership. The property
was then managed by the Limited Partnership, through Theodore Nering, a
Corporate Life representative. See 861 F.Supp. at 312. There is no relationship,
other than the lease, between Associates, the lessor, and the Limited Partnership,
the lessee.
Plaintiffs John Carter, John Swing and John Veronis (artists or plaintiffs)
are professional sculptors who work together and are known collectively
as the "Three-J's" or "Jx3." On December 16, 1991 SIG
entered into a one-year agreement with the plaintiffs "engag[ing] and
hir[ing] the Artists ... to design, create and install sculpture and other
permanent installations" in the building, primarily the lobby. Under
the agreement plaintiffs had "full authority in design, color and style,"
and SIG retained authority to direct the location and installation of the
artwork within the building. The artists were to retain copyrights to their
work and SIG was to receive 50 percent of any proceeds from its exploitation.
On January 20, 1993 SIG and the artists signed an agreement extending the
duration of their commission for an additional year. When Corporate Life
became a general partner of the Limited Partnership, the Limited Partnership
assumed the agreement with plaintiffs and in December 1993 again extended
the agreement.
The artwork that is the subject of this litigation is a very large "walk-
through sculpture" occupying most, but not all, of the building's lobby.
The artwork consists of a variety of sculptural elements constructed from
recycled materials, much of it metal, affixed to the walls and ceiling,
and a vast mosaic made from pieces of recycled glass embedded in the floor
and walls. Elements of the work include a giant hand fashioned from an old
school bus, a face made of automobile parts, and a number of interactive
components. These assorted elements make up a theme relating to environmental
concerns and the significance of recycling.
The Limited Partnership's lease on the building was terminated on March
31, 1994. It filed for bankruptcy one week later. The property was surrendered
to defendant Associates on April 6, 1994 and defendant Helmsley- Spear,
Inc. took over management of the property. Representatives of defendants
informed the artists that they could no longer continue to install artwork
at the property, and instead had to vacate the building. These representatives
also made statements indicating that defendants intended to remove the artwork
already in place in the building's lobby.
As a result of defendants' actions, artists commenced this litigation.
On April 26, 1994 the district court issued a temporary restraining order
enjoining defendants from taking any action to alter, deface, modify or
mutilate the artwork installed in the building. In May 1994 a hearing was
held on whether a preliminary injunction should issue. The district court
subsequently granted a preliminary injunction enjoining defendants from
removing the artwork pending the resolution of the instant litigation.
See Carter v. Helmsley-Spear, Inc., 852 F.Supp. 228 (S.D.N.Y.1994).
A bench trial was subsequently held in June and July 1994, at the conclusion
of which the trial court granted the artists the permanent injunction prohibiting
defendants from distorting, mutilating, modifying, destroying and removing
plaintiffs' artwork. Carter v. Helmsley-Spear, Inc., 861 F.Supp. 303, 337
(S.D.N.Y.1994). The injunction is to remain in effect for the lifetimes
of the three plaintiffs. Plaintiffs' other claims, including their cause
of action for tortious interference and a request for an award of costs
and attorney's fees and that they be allowed to continue to add to the artwork
in the lobby, as well as defendants' counterclaim for waste, were all dismissed
with prejudice. This appeal and cross-appeal followed.
DISCUSSION
I Artists' Moral Rights
A. History of Artists' Moral Rights
Because it was under the rubric of the Visual Artists Rights Act of 1990
that plaintiffs obtained injunctive relief in the district court, we must
explore, at least in part, the contours of that Act. In doing so it is
necessary to review briefly the concept of artists' moral rights and the
history and development of those rights in American jurisprudence, which
led up to passage of the statute we must now examine.
The term "moral rights" has its origins in the civil law and
is a translation of the French le droit moral, which is meant to capture
those rights of a spiritual, non-economic and personal nature. The rights
spring from a belief that an artist in the process of creation injects his
spirit into the work and that the artist's personality, as well as the integrity
of the work, should therefore be protected and preserved. See Ralph E.
Lerner & Judith Bresler, Art Law 417 (1989) (Art Law ). Because they
are personal to the artist, moral rights exist independently of an artist's
copyright in his or her work. See, e.g., 2 Nimmer on Copyright 8D-4 &
n. 2 (1994) (Nimmer ).
While the rubric of moral rights encompasses many varieties of rights,
two are protected in nearly every jurisdiction recognizing their existence:
attribution and integrity. See Art Law at 420. The right of attribution
generally consists of the right of an artist to be recognized by name as
the author of his work or to publish anonymously or pseudonymously, the
right to prevent the author's work from being attributed to someone else,
and to prevent the use of the author's name on works created by others,
including distorted editions of the author's original work. See, e.g.,
id. at 419- 20; Nimmer at 8D-5. The right of integrity allows the author
to prevent any deforming or mutilating changes to his work, even after title
in the work has been transferred. See, e.g., Art Law at 420.
In some jurisdictions the integrity right also protects artwork from destruction.
Whether or not a work of art is protected from destruction represents a
fundamentally different perception of the purpose of moral rights. If integrity
is meant to stress the public interest in preserving a nation's culture,
destruction is prohibited; if the right is meant to emphasize the author's
personality, destruction is seen as less harmful than the continued display
of deformed or mutilated work that misrepresents the artist and destruction
may proceed. See Art Law at 421; see also 2 William F. Patry, Copyright
Law and Practice 1044 n. 128 (1994) (Copyright Law ) (noting the different
models but suggesting that "destruction of a work shows the utmost
contempt for the artist's honor or reputation").
Although moral rights are well established in the civil law, they are of
recent vintage in American jurisprudence. Federal and state courts typically
recognized the existence of such rights in other nations, but rejected artists'
attempts to inject them into U.S. law. See, e.g., Vargas v. Esquire, Inc.,
164 F.2d 522, 526 (7th Cir.1947); Crimi v. Rutgers Presbyterian Church,
194 Misc. 570, 573-76 (N.Y.Sup.Ct.1949). Nonetheless, American courts have
in varying degrees acknowledged the idea of moral rights, cloaking the concept
in the guise of other legal theories, such as copyright, unfair competition,
invasion of privacy, defamation, and breach of contract. See Nimmer at
8D-10; Art Law at 423.
In the landmark case of Gilliam v. American Broadcasting Companies, Inc.,
538 F.2d 14 (2d Cir.1976), we relied on copyright law and unfair competition
principles to safeguard the integrity rights of the "Monty Python"
group, noting that although the law "seeks to vindicate the economic,
rather than the personal rights of authors ... the economic incentive for
artistic ... creation ... cannot be reconciled with the inability of artists
to obtain relief for mutilation or misrepresentation of their work to the
public on which the artists are financially dependent." Id. at 24.
Because decisions protecting artists rights are often "clothed in
terms of proprietary right in one's creation," we continued, "they
also properly vindicate the author's personal right to prevent the presentation
of his work to the public in a distorted form." Id.
Artists fared better in state legislatures than they generally had in courts.
California was the first to take up the task of protecting artists with
the passage in 1979 of the California Art Preservation Act, Cal.Civ.Code
s 987 et seq. (West 1982 & Supp.1995), followed in 1983 by New York's
enactment of the Artist's Authorship Rights Act, N.Y.Arts & Cult. Aff.
Law s 14.03 (McKinney Supp.1995). Nine other states have also passed moral
rights statutes, generally following either the California or New York models.
See generally Art Law at 430-35; id. at 301-09 (Supp.1992) (describing
the different states' laws).
B. Visual Artists Rights Act of 1990
Although bills protecting artists' moral rights had first been introduced
in Congress in 1979, they had drawn little support. See Copyright Law at
1018 n. 1. The issue of federal protection of moral rights was a prominent
hurdle in the debate over whether the United States should join the Berne
Convention, the international agreement protecting literary and artistic
works. Article 6bis of the Berne Convention protects attribution and integrity,
stating in relevant part: Independently of the author's economic rights,
and even after the transfer of the said rights, the author shall have the
right to claim authorship of the work and to object to any distortion, mutilation
or other modification of, or other derogatory action in relation to, the
said work, which would be prejudicial to his honor or reputation. Berne
Convention for the Protection of Literary and Artistic Works, September
9, 1886, art. 6bis, S.Treaty Doc. No. 27, 99th Cong., 2d Sess. 41 (1986).
The Berne Convention's protection of moral rights posed a significant difficulty
for U.S. adherence. See Copyright Law at 1022 ("The obligation of
the United States to provide droit moral ... was the single most contentious
issue surrounding Berne adherence."); Nimmer at 8D-15 ("During
the debate over [the Berne Convention Implementation Act], Congress faced
an avalanche of opposition to moral rights, including denunciations of moral
rights by some of the bill's most vociferous advocates."); H.R.Rep.
No. 514, 101st Cong., 2d Sess. 7 (1990), reprinted in 1990 U.S.C.C.A.N.
6915, 6917 ("After almost 100 years of debate, the United States joined
the Berne Convention.... [C]onsensus over United States adherence was slow
to develop in large part because of debate over the requirements of Article
6bis.").
Congress passed the Berne Convention Implementation Act of 1988, Pub.L.
No. 100-568, 102 Stat. 2853 (1988), and side-stepped the difficult question
of protecting moral rights. It declared that the Berne Convention is not
self-executing, existing law satisfied the United States' obligations in
adhering to the Convention, its provisions are not enforceable through any
action brought pursuant to the Convention itself, and neither adherence
to the Convention nor the implementing legislation expands or reduces any
rights under federal, state, or common law to claim authorship of a work
or to object to any distortion, mutilation, or other modification of a work.
See id. ss 2, 3; see also S.Rep. No. 352, 100th Cong., 2d Sess. 9-10 (1988),
reprinted in 1988 U.S.C.C.A.N. 3706, 3714-15.
Two years later Congress enacted the Visual Artists Rights Act of 1990
(VARA or Act), Pub.L. No. 101-650 (tit. VI), 104 Stat. 5089, 5128-33 (1990).
Construing this Act constitutes the subject of the present appeal. The
Act protects both the reputations of certain visual artists and the works
of art they create. It provides these artists with the rights of "attribution"
and "integrity." ... These rights are analogous to those protected
by Article 6bis of the Berne Convention, which are commonly known as "moral
rights." The theory of moral rights is that they result in a climate
of artistic worth and honor that encourages the author in the arduous act
of creation. H.R.Rep. No. 514 at 5 (internal quote omitted). The Act brings
to fruition Emerson's insightful observation.
Its principal provisions afford protection only to authors of works of
visual art--a narrow class of art defined to include paintings, drawings,
prints, sculptures, or photographs produced for exhibition purposes, existing
in a single copy or limited edition of 200 copies or fewer. 17 U.S.C. s
101 (Supp. III 1991). With numerous exceptions, VARA grants three rights:
the right of attribution, the right of integrity and, in the case of works
of visual art of "recognized stature," the right to prevent destruction.
17 U.S.C. s 106A (Supp. III 1991). For works created on or after June
1, 1991--the effective date of the Act--the rights provided for endure for
the life of the author or, in the case of a joint work, the life of the
last surviving author. The rights cannot be transferred, but may be waived
by a writing signed by the author. Copyright registration is not required
to bring an action for infringement of the rights granted under VARA, or
to secure statutory damages and attorney's fees. 17 U.S.C. ss 411, 412
(1988 & Supp. III 1991). All remedies available under copyright law,
other than criminal remedies, are available in an action for infringement
of moral rights. 17 U.S.C. s 506 (1988 & Supp. III 1991). With this
historical background in hand, we pass to the merits of the present litigation.
II Work of Visual Art
Because VARA is relatively new, a fuller explication of it is helpful.
In analyzing the Act, therefore, we will follow in order the definition
set forth in s 101, as did the district court when presiding over this litigation.
The district court determined that the work of art installed in the lobby
of Associates' building was a work of visual art as defined by VARA; that
distortion, mutilation, or modification of the work would prejudice plaintiffs'
honor and reputations; that the work was of recognized stature, thus protecting
it from destruction (including removal that would result in destruction);
and that Associates consented to or ratified the installation of the work
in its building. The result was that defendants were enjoined from removing
or otherwise altering the work during the lifetimes of the three artists.
A. Singleness of the Work
As a preliminary matter, we must determine whether the trial court correctly
found that the work is a single piece of art, to be analyzed under VARA
as a whole, rather than separate works to be considered individually. This
finding was a factual one reviewed under the clearly erroneous standard.
For purposes of framing the issues at trial the parties entered into a joint
stipulation relating to numerous facts, including a definition of "the
Work." This stipulated definition contained a long, detailed list of
all the sculptural elements contained in the building's lobby. The district
court found that, with a few precise exceptions determined to be separate
works of art, the artwork created by plaintiffs in the lobby was a single
work. See 861 F.Supp. at 314-15. This finding was based on testimony,
credited by the trial judge, of the artists themselves and of their expert
witnesses.
The trial court found further support for its conclusion in the method
by which the artists created the work--each additional element of the sculpture
was based on the element preceding it so that they would mesh together.
The result was a thematically consistent, inter-related work whose elements
could not be separated without losing continuity and meaning. See id. at
315. The record evidence of singleness was confirmed at the request of the
parties by the district court's own inspection of the work.
Appellants' primary contention is that the finding of singleness is inconsistent
with a finding that certain works of art were separate from the work that
is the subject of this appeal. This assertion rests on the mistaken belief
that the parties' joint stipulation to a definition of "the Work"
precluded an ultimate determination by the factfinder that most but not
all of the work installed in the lobby was a single artwork. In other words,
according to appellants, either every component in the stipulated definition
is part of a single work or every component is an individual work; there
is no middle ground. Appellants' goal is to have VARA applied to each element
of the sculpture individually, so that components that may not be visual
art standing alone cannot be considered visual art when they are combined
by the artists to create a whole that has a nature different than the mere
sum of its parts.
Appellants' goal is not attainable. The parties stipulated that when they
used the term "the Work" it included a list of sculptural components.
The result was that during the trial there was no dispute as to the parties'
meaning when referring to "the Work." The trial court was free
to find that a few items of "the Work" were separate works of
art, while the remainder of "the Work" was a single, interrelated,
indivisible work of art. The finding of singleness was based on determinations
of witness credibility as well as the district court's own inspection of
the artwork. We cannot say that such a finding was clearly erroneous.
B. The Statutory Definition
A "work of visual art" is defined by the Act in terms both positive
(what it is) and negative (what it is not). In relevant part VARA defines
a work of visual art as "a painting, drawing, print, or sculpture,
existing in a single copy" or in a limited edition of 200 copies or
fewer. 17 U.S.C. s 101. Although defendants aver that elements of the
work are not visual art, their contention is foreclosed by the factual finding
that the work is a single, indivisible whole. Concededly, considered as
a whole, the work is a sculpture and exists only in a single copy. Therefore,
the work satisfies the Act's positive definition of a work of visual art.
We next turn to the second part of the statutory definition--what is not
a work of visual art.
The definition of visual art excludes "any poster, map, globe, chart,
technical drawing, diagram, model, applied art, motion picture or other
audio- visual work." 17 U.S.C. s 101. Congress meant to distinguish
works of visual art from other media, such as audio-visual works and motion
pictures, due to the different circumstances surrounding how works of each
genre are created and disseminated. See H.R.Rep. No. 514 at 9. Although
this concern led to a narrow definition of works of visual art, [t]he courts
should use common sense and generally accepted standards of the artistic
community in determining whether a particular work falls within the scope
of the definition. Artists may work in a variety of media, and use any
number of materials in creating their works. Therefore, whether a particular
work falls within the definition should not depend on the medium or materials
used. Id. at 11.
"Applied art" describes "two- and three-dimensional ornamentation
or decoration that is affixed to otherwise utilitarian objects." Carter,
861 F.Supp. at 315, citing Kieselstein-Cord v. Accessories By Pearl, Inc.,
632 F.2d 989, 997 (2d Cir.1980). Defendants' assertion that at least parts
of the work are applied art appears to rest on the fact that some of the
sculptural elements are affixed to the lobby's floor, walls, and ceiling--all
utilitarian objects. Interpreting applied art to include such works would
render meaningless VARA's protection for works of visual art installed in
buildings. A court should not read one part of a statute so as to deprive
another part of meaning. See, e.g., United States Nat'l Bank of Or. v.
Independent Ins. Agents of America, Inc., 508 U.S. 439, ----, 113 S.Ct.
2173, 2182, 124 L.Ed.2d 402 (1993); United States v. LaPorta, 46 F.3d 152,
156 (2d Cir.1994).
Appellants do not suggest the entire work is applied art. The district
court correctly stated that even if components of the work standing alone
were applied art, "nothing in VARA proscribes protection of works of
visual art that incorporate elements of, rather than constitute, applied
art." 861 F.Supp. at 315. VARA's legislative history leaves no doubt
that "a new and independent work created from snippets of [excluded]
materials, such as a collage, is of course not excluded" from the definition
of a work of visual art. H.R.Rep. No. 514 at 14. The trial judge correctly
ruled the work is not applied art precluded from protection under the Act.
III Work Made for Hire
Also excluded from the definition of a work of visual art is any work made
for hire. 17 U.S.C. s 1012(B). A "work made for hire" is defined
in the Copyright Act, in relevant part, as "a work prepared by an employee
within the scope of his or her employment." Id. s 101(1). Appellants
maintain the work was made for hire and therefore is not a work of visual
art under VARA. The district court held otherwise, finding that the plaintiffs
were hired as independent contractors.
A. Reid Tests
The Copyright Act does not define the terms "employee" or "scope
of employment." In Community for Creative Non-Violence v. Reid, 490
U.S. 730, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989), the Supreme Court looked
to the general common law of agency for guidance. It held that a multi-factor
balancing test was required to determine if a work was produced for hire
(by an employee) or was produced by an independent contractor. Reid, 490
U.S. at 751, 109 S.Ct. at 2178. The Court elaborated 13 specific factors:
the hiring party's right to control the manner and means by which the product
is accomplished.... the skill required; the source of the instrumentalities
and tools; the location of the work; the duration of the relationship
between the parties; whether the hiring party has the right to assign additional
projects to the hired party; the extent of the hired party's discretion
over when and how long to work; the method of payment; the hired party's
role in hiring and paying assistants; whether the work is part of the regular
business of the hiring party; whether the hiring party is in business;
the provision of employee benefits; and the tax treatment of the hired
party. Reid, 490 U.S. at 751-52, 109 S.Ct. at 2178-79. While all of these
factors are relevant, no single factor is determinative. Id. at 752. See
also Hilton International Company v. NLRB, 690 F.2d 318, 321 (2d Cir.1982).
Instead, the factors are weighed by referring to the facts of a given case.
See Aymes v. Bonelli, 980 F.2d 857, 861 (2d Cir.1992).
The district court determined that the sculpture was not "work for
hire" and therefore not excluded from the definition of visual art.
The Reid test is a list of factors not all of which may come into play
in a given case. See Aymes, 980 F.2d at 861. The Reid test is therefore
easily misapplied. We are usually reluctant to reverse a district court's
factual findings as to the presence or absence of any of the Reid factors
and do so only when the district court's findings are clearly erroneous.
By contrast, the ultimate legal conclusion as to whether or not the sculpture
is "work for hire" is reviewed de novo. The district court correctly
stated the legal test. But some of its factual findings, we think, were
clearly erroneous.
B. Factors Applied
The district court properly noted that Aymes established five factors
which would be relevant in nearly all cases: the right to control the manner
and means of production; requisite skill; provision of employee benefits;
tax treatment of the hired party; whether the hired party may be assigned
additional projects. See 980 F.2d at 861. Analysis begins with a discussion
of these factors.
First, plaintiffs had complete artistic freedom with respect to every aspect
of the sculpture's creation. Although the artists heeded advice or accepted
suggestions from building engineers, architects, and others, such actions
were not a relinquishment of their artistic freedom. The evidence strongly
supports the finding that plaintiffs controlled the work's "manner
and means." This fact, in turn, lent credence to their contention
that they were independent contractors. See Hilton, 690 F.2d at 320. While
artistic freedom remains a central factor in our inquiry, the Supreme Court
has cautioned that "the extent of control the hiring party exercises
over the details of the product is not dispositive." Reid, 490 U.S.
at 752, 109 S.Ct. at 2179. Hence, resolving the question of whether plaintiffs
had artistic freedom does not end the analysis.
The district court also correctly found the artists' conception and execution
of the work required great skill in execution. Appellants' contention that
the plaintiffs' reliance on assistants in some way mitigates the skill required
for this work is meritless, particularly because each of the plaintiffs
is a professional sculptor and the parties stipulated that professional
sculpting is a highly skilled occupation. The right to control the manner
and means and the requisite skill needed for execution of this project were
both properly found by the district court to weigh against "work for
hire" status.
The trial court erred, however, when it ruled that the defendants could
not assign the artists additional projects. First, the employment agreement
between SIG Management Company and the artists clearly states that the artists
agreed not only to install the sculpture but also to "render such other
related services and duties as may be assigned to [them] from time to time
by the Company." By the very terms of the contract the defendants
and their predecessors in interest had the right to assign other related
projects to the artists. The district court incorrectly decided that this
language supported the artists' claim to be independent contractors. While
the artists' obligations were limited to related services and duties, the
defendants nonetheless did have the right to assign to plaintiffs work other
than the principal sculpture.
Further, the defendants did, in fact, assign such other projects. The
district court concedes as much, explaining that "plaintiffs did create
art work on the property other than that in the Lobby." Carter, 861
F.Supp. at 319. The record shows the artists performed projects on the
sixth floor of the building, on the eighth floor, and in the boiler room.
Thus, on at least three different occasions the plaintiffs were assigned
additional projects, which they completed without further compensation.
The trial court suggests this fact "does not undermine plaintiffs'
contention that they were hired solely to install art work on the Property."
Id. We disagree. If the artists were hired to perform work other than
the sculpture (as both their employment agreement and their actual practice
suggests) then they were not hired solely to install the sculpture. It
makes no difference that all work performed by the plaintiffs was artistic
in nature. The point is that the performance of other assigned work not
of the artists' choosing supports a conclusion that the artists were not
independent contractors but employees.
We must also consider factors the district court correctly found to favor
finding the sculpture to be work for hire. Specifically, the provision
of employee benefits and the tax treatment of the plaintiffs weigh strongly
in favor of employee status. The defendants paid payroll and social security
taxes, provided employee benefits such as life, health, and liability insurance
and paid vacations, and contributed to unemployment insurance and workers'
compensation funds on plaintiffs' behalf. Moreover, two of the three artists
filed for unemployment benefits after their positions were terminated, listing
the building's management company as their former employer. Other formal
indicia of an employment relationship existed. For instance, each plaintiff
was paid a weekly salary. The artists also agreed in their written contract
that they would work principally for the defendants for the duration of
their agreement on a 40-hour per week basis and they would only do other
work to the extent that it would not "interfere with services to be
provided" to the defendants. All of these facts strongly suggest the
artists were employees.
Some of the other Reid factors bolster this view. The artists were provided
with many (if not most) of the supplies used to create the sculpture. This
factor was not, as the district court found, "inconclusive."
The court also wrongly ruled that plaintiffs were hired for a "finite
term of engagement." In fact, they were employed for a substantial
period of time, their work continuing for over two years with no set date
of termination (other than the sculpture's completion). Nor was the fact
that the artists could not hire paid assistants without the defendants'
approval "inconclusive" as the trial court erroneously found.
Instead, this and the other just enumerated factors point towards an employer-employee
relationship between the parties.
In reaching its conclusion, the district court also relied partly on the
artists' copyright ownership of the sculpture, viewing such ownership as
a "plus factor." We are not certain whether this element is a
"plus factor," and therefore put off for another day deciding
whether copyright ownership is probative of independent contractor status.
Even were it to be weighed as a "plus factor," it would not change
the outcome in this case.
C. Employee Status
Our review of the legal conclusion drawn from balancing the various Reid
factors persuades us that the factors that weigh in favor of finding the
artists were employees outweigh those factors supporting the artists' claim
that they were independent contractors. One of the factors that did not
persuade us was the appellants' simplistic contention that usage of the
words "employ" or "employment" in the agreements between
the artists and SIG or the Limited Partnership establishes that the plaintiffs
were employees. The use of these terms does not transform them into "magic
words" imbued with legally controlling significance.
Again, we emphasize that despite the conclusion reached we do not intend
to marginalize factors such as artistic freedom and skill, making them peripheral
to the status inquiry. The fact that artists will always be retained for
creative purposes cannot serve to minimalize this factor of the Reid test,
even though it will usually favor VARA protection. Also, that the work
was produced on the employer's premises is a necessary incident to all nonremovable
art and therefore should not carry great weight. Similarly, we were not
swayed by the boilerplate contract language or the accounting decision to
deduct FICA taxes. To so read s 101 runs against the broad remedial purposes
of VARA. As discussed earlier, the moral rights of the artist whose artistic
work comes under VARA's umbrella are to be protected, not ignored, in light
of Congress' pathbreaking legislation.
Moreover, because the Reid test is fact-dependent, future cases involving
the work for hire question will not always fit neatly into an employee or
independent contractor category. We also recognize that by counting indicia
such as health insurance and paid vacations against the artists' independent
contractor status, it may appear that artists regrettably are being forced
to choose between the personal benefits inuring in an employment relationship
and VARA's protection of the artists' work afforded only to independent
contractors. Of course, when an employer today denies an artist "basic
attributes of employment" like vacation time or health benefits, such
denial will be wholly inconsistent with a "work for hire" defense.
See Aymes, 980 F.2d at 862-63.
Consequently, while the existence of payroll formalities alone would not
be controlling, see Reid, 490 U.S. at 743 n. 8, 109 S.Ct. at 2174 n. 8,
in combination with other factors, it may lead to a conclusion that a given
work is one made for hire. Such other factors include: plaintiffs under
their contract could be and were in fact assigned projects in addition to
the work in the lobby; they were paid a weekly salary for over two years
for a contracted 40 hours of work per week; they were furnished many of
the needed supplies necessary to create the work; and plaintiffs could
not hire paid assistants without defendants' consent. These factors, properly
considered and weighed with the employee benefits granted plaintiffs and
the tax treatment accorded them, are more than sufficient to demonstrate
that the artists were employees, and the sculpture is therefore a work made
for hire as a matter of law.
IV Defendants' Counterclaim and Plaintiffs' Cross-appeal
Finally, since we have determined that the work is one made for hire and
therefore outside the scope of VARA's protection, we need not discuss that
Act's broad protection of visual art and the protection it affords works
of art incorporated into a building. Also, as plaintiffs' sculpture was
not protected from removal because the artists were employees and not independent
contractors, we need not reach the defendants' Fifth Amendment takings argument.
Moreover, because the sculpture is not protected by VARA from removal resulting
in its destruction or alteration, we do not address plaintiffs' contentions
that VARA entitles them to complete the "unfinished" portion of
the work, that they are entitled to reasonable costs and attorney's fees,
and that appellants tortiously interfered with the artists' contract with
SIG and the Limited Partnership. Finally, the district court dismissed
defendants' counterclaim against the artists for waste, finding, inter alia,
that such a cause of action under New York law may only be brought by a
landlord against a tenant. See 861 F.Supp. at 334-36. Appellants have
failed to persuade us that it was error to dismiss this counterclaim.
CONCLUSION
Accordingly, the district court's order insofar as it held the work was
one not made for hire is reversed and the injunction vacated. In all other
respects, the order of the district court is affirmed. Each party to bear
its own costs.