Question

Brief the following case using the IRAC method.

Issue:

Rule:

Application:

Conclusion:

On February l, 2004, CBS, the television network, presented a live broadcast of the National Football League's Super Bowl XXXVIII, which included a
halftime show produced by MTV Networks. Both CBS and MTV were divisions of Viacom Inc. at the time. Nearly 90 million viewers watched the show,
which featured recording artists Janet Jackson and Justin Timberlake. Jackson and Timberlake performed his popular song "Rock Your Body " as the show's
finale. Their performance involved sexually suggestive choreography with Timberlake seeking to dance with Jackson and she alternating between accepting and
rejecting his advances. The performance ended with Timberlake singing, "gonna have you naked by the end of this song, " and simultaneously tearing away part
ofJackson 's bustier. CBS had implemented a five-second audio delay to guard against the possibility of indecent language being transmitted on air, but it did
not employ similar precautionary technology for video images. As a result, Jackson's bare right breast was exposed on camera for nine-sixteenths of one second.

Jackson 's exposed breast caused a sensation and resulted in a large number of viewer complaints to the Federal Communications Commission. In response, the
FCC issued a letter of inquiry asking CBS to provide more information about the broadcast. CBS issued a public statement of apology for the incident. CBS
stated that Jackson and Timberlake's wardrobe stunt was unscripted and unauthorized, claiming CBS had no advance notice of any plan by the performers to
deviate from the script. After its review, the FCC determined CBS was liable for a forfeiture penalty of $550,000 on several grounds, including that under the
doctrine ofrespondeat superior, CBS was vicariously liable for the willful actions of its employees, Jackson and Timberlake. CBS asked the Third Circuit
Court ofAppeals to review the FCC decision.

Scirica, Chief Judge
The respondeat superior doctrine provides that "[a]n employer is subject to liability for torts committed by employees while acting within the scope of their
employment." Restatement (Third) ofAgency 2.04 (2006)

But even though the respondeat superior doctrine may apply in this context, it is limited to the conduct of employees acting within the scope of their
employment. Determining whether CBS may be liable under respondeat superior first requires selection of the applicable legal standard for differentiating an
"employee" from an "independent contractor."

In Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), the Court set forth a test for determining who qualifies as an "employee" under the common
law:

In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's
right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry
are 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; and the
tax treatment of the hired party.

While establishing that all of these factors are relevant and that "no one of these factors is determinative," Reid did not provide guidance on the Page 996
relative weight each factor should be assigned when performing a balancing analysis. Accordingly, all of the Reid factors are relevant, and no one factor is
decisive, but the weight each factor should be accorded depends on the context of the case. Some factors will have "little or no significance in determining
whether a party is an independent contractor or an employee" on the facts of a particular case. In the present case, the FCC erred by failing to consider several
important Reid factors when determining whether Jackson and Timberlake were employees of CBS. And rather than balancing those factors it did consider,
the Commission focused almost exclusively on CBS's right of control over the performers.

Only three factors weigh in favor of a determination that Jackson and Timberlake were employees of CBS. First, CBS is in business, which increases the
possibility that it would employ people. Second, CBS regularly produces shows for national broadcast in the course of its business. Both factors are relatively
insignificant on balance. Third, and most significant to its argument, is the factor the FCC focused on in its orders: CBS's right to control the manner and means
by which Jackson and Timberlake accomplished their Halftime Show performance. As the FCC contends, CBS, through its corporate affiliates, supervised the
Halftime Show and retained the right to approve all aspects of the show's performances. But it is undisputed that CBS's actual control over the Halftime Show
performances did not extend to all aspects of the performers' work. The performers, not CBS, provided their own choreography and retained substantial latitude
to develop the visual performances that would accompany their songs. Similarly, as the FCC notes, CBS personnel reviewed the performers' selections of set
items and wardrobes, but the performers retained discretion to make those choices in the first instance and provided some of their own materials.

CBS's control was extensive but not determinative of employment. Even though a principal's right to control is an important factor weighing in favor of a
determination that an employment relationship existed, it is not dispositive when considered on balance with the rest of the Reid factors. Of the remaining
factors significant on the facts here, all are strongly indicative of Jackson and Timberlake's independent contractor status. First, it is undisputed that both
Jackson and
Timberlake were hired for brief, one-time performances during the Halftime Show; CBS could not assign more work to the performers.* Second, Jackson and
Timberlake selected and hired their own choreographers, backup dancers, and other assistants without any involvement on the part of CBS.

Third, Jackson and Timberlake were compensated by one-time, lump-sum contractual payments and "promotional considerations" rather than by salaries or
other similar forms of remittances, without the provision of employee benefits. Fourth, the skill required of a performer hired to sing and dance as the headlining
act for the Halftime Show—a performance during a Super Bowl broadcast, as the FCC notes, that attracted nearly 90 million viewers and was the highest-rated
show during the 2()()3-()4 television season—is substantial even relative to the job of a general entertainer, which is itself a skilled occupation.

Also weighing heavily in favor of Jackson and Timberlake's status as independent contractors is CBS's assertion in its briefs, which the FCC does not refute, that
it paid no employment tax. 1--1ad the performers been employees rather than independent contractors, federal law would have required CBS to pay such taxes.

Finally, there is no evidence that Jackson, Timberlake, or CBS considered their contractual relationships to be those of employer-employee. In Reid, the Court
incorporated the Restatement, describing it as "setting forth a nonexhaustive list of factors relevant to determining whether a hired party is an employee"
under the common law of agency. Among the factors not explicitly listed in Reid, but included in the Restatement, is the parties' understanding of their
contractual relationship. See Restatement (Third) ofAgency 7.07 cmt. f (including as an explicit factor in determining employment status "whether the
principal and the agent believe that they are creating an employment relationship"). Although the Commission did not inquire into this factor, it should have
been a significant consideration in this case. Under the FCC's rationale, band members contracted to play a one-song set on a talk show or a "one-show-only"
televised concert special presumably would be employees of the broadcaster. These performers—who frequently promote their work through brief contractual
relationships with media outlets—would be "employees" of dozens of employers every year. Accordingly, it is doubtful that either the performers here or
CBS believed their contracts created employment relationships.

On balance, the relevant factors here weigh heavily in favor of a determination that Jackson and Timberlake were independent contractors rather than employees
of CBS. Accordingly, the doctrine of respondeat superior does not apply on these facts.

FCC order vacated in favor of CBS.

Answer 1

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ISSUE

Were Janet Jackson and Justin Timberlake CBS’s employees?

RULE

Due to a wardrobe malfunction aired on live tv during a performance, FCC said CBS was liable for damages under the doctrine of respondeat superior as an employer.

Rescission of an agency rule should be judged by the same standard a court would use to judge an agency's refusal to promulgate a rule in the first place—a standard Petitioner believes considerably narrower than the traditional arbitrary and capricious test and "close to the borderline of nonreviewability.

APPLICATION

According to the respondeat superior doctrine, an employer is subject to liability for torts committed by employees while acting within the scope of their employment. Determining if CBS may be liable under respondeat superior requires the confirmation that both Jackson and Timberlake were CBS’s employees. A careful analysis of the facts revealed that they were independent contractors rather than employees. Weighing in favor of this is the fact that 1) CBS paid no employment tax; 2) CBS’s control was extensive but not determinative of employment; 3) They were both hired for brief, one-time performances and were compensated by one-time, lump-sum contractual payments rather than by salaries. Not being CBS employees, the respondeat superior does not apply.

CONCLUSION

FCC order vacated in favor of CBS. Court determined Jackson and Timberlake were independent contractors, making CBS not responsible for their malfunction

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