CARTER v. HELMSLEY-SPEAR, INC., 71 F.3d 77 (2nd Cir. 1995)

CARTER v. HELMSLEY-SPEAR, INC., 71 F.3d 77 (2nd Cir. 1995)





Nos. 1269, 1549, Docket Nos. 94-7990, 94-9038.

United States Court of Appeals, Second Circuit.

Argued March 15, 1995.

Decided December 1, 1995.

Adrian Zuckerman, New York City, (Robert C. Boneberg, Jill Rosenthal, Davidoff & Malito, New York City, of counsel), for Defendants-Counter-Claimants-Appellants-Cross-Appellees.

Charles Lozow, New York City, (Daniel H. Weiner, John J. McGreevy, Patrick T. Perkins, Hughes Hubbard & Reed, New York City, of counsel), for Plaintiffs-Counter-Claim-Defendants-Appellees-Cross-Appellants.

Richard A. Altman, New York City, for Plaintiffs-Counter-Claim-Defendants-Appellees-Cross-Appellants.

Appeal from the United States District Court for the Southern District of New York.

Before: MESKILL, CARDAMONE, and ALTIMARI Circuit Judges

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 theSouthern District of New York (Edelstein, J.), entered onSeptember 6, 1994 following a bench trial. The order granted plaintiffs, who are three artists, a permanent injunction thatenjoined defendants from removing, modifying or destroying a workof 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 thetrial court of their counterclaim for waste. Plaintiffs cross-appeal from the dismissal of their cause of action fortortious interference with contractual relations and from thedenial of their requests to complete the work and for an award ofattorney's fees and costs.

On this appeal we deal with an Act of Congress that protectsthe rights of artists to preserve their works. One of America's most insightful thinkers observed that a country is not trulycivilized "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 beencouraged by laws that protect their works. Although Congress inthe statute before us did just that, it did not mandate thepreservation of art at all costs and without due regard for therights of others.

For the reasons that follow, we reverse and vacate the grant ofinjunctive relief to plaintiffs and affirm the dismissal by thedistrict court of plaintiffs' other claims and its dismissal ofdefendants' counterclaim for waste.


Defendant 474431 Associates (Associates) is the owner of amixed use commercial building located at 47-44 31st Street,Queens, New York, which it has owned since 1978. Associates is aNew York general partnership. The general partners are AlvinSchwartz 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. FromFebruary 1, 1990 until June 1993, Irwin Cohen or an entity underhis 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 alimited partner in the Limited Partnership. In June 1993 SIGceased its involvement with the property and Corporate Life,through an entity controlled by it, became the general partner ofthe Limited Partnership. The property was then managed by theLimited Partnership, through Theodore Nering, a Corporate Liferepresentative. See 861 F. Supp. at 312. There is norelationship, other than the lease, between Associates, the lessor, and the Limited Partnership, the lessee.

Plaintiffs John Carter, John Swing and John Veronis (artists orplaintiffs) are professional sculptors who work together and areknown 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 andinstall sculpture and other permanent installations" in thebuilding, primarily the lobby. Under the agreement plaintiffs had"full authority in design, color and style," and SIG retainedauthority to direct the location and installation of the artworkwithin the building. The artists were to retain copyrights totheir work and SIG was to receive 50 percent of any proceeds fromits exploitation. On January 20, 1993 SIG and the artists signedan agreement extending the duration of their commission for anadditional year. When Corporate Life became a general partner ofthe Limited Partnership, the Limited Partnership assumed theagreement with plaintiffs and in December 1993 again extended theagreement.

The artwork that is the subject of this litigation is a verylarge "walk-through sculpture" occupying most, but not all, ofthe building's lobby. The artwork consists of a variety ofsculptural elements constructed from recycled materials, much ofit metal, affixed to the walls and ceiling, and a vast mosaicmade from pieces of recycled glass embedded in the floor andwalls. Elements of the work include a giant hand fashioned froman old school bus, a face made of automobile parts, and a numberof interactive components. These assorted elements make up atheme relating to environmental concerns and the significance ofrecycling.

The Limited Partnership's lease on the building was terminated on March 31, 1994. It filed for bankruptcy one week later. Theproperty was surrendered to defendant Associates on April 6, 1994and defendant Helmsley-Spear, Inc. took over management of theproperty. Representatives of defendants informed the artists thatthey 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 toremove the artwork already in place in the building's lobby.

As a result of defendants' actions, artists commenced thislitigation. On April 26, 1994 the district court issued atemporary restraining order enjoining defendants from taking anyaction to alter, deface, modify or mutilate the artwork installedin the building. In May 1994 a hearing was held on whether apreliminary injunction should issue. The district court subsequently granted a preliminary injunction enjoining defendants from removing the artwork pending the resolution ofthe instant litigation. See Carter v. Helmsley-Spear, Inc., 852F. Supp. 228 (S.D.N.Y. 1994).

A bench trial was subsequently held in June and July 1994, atthe conclusion of which the trial court granted the artists thepermanent 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 thelifetimes of the three plaintiffs. Plaintiffs' other claims, including their cause of action for tortious interference and arequest for an award of costs and attorney's fees and that theybe allowed to continue to add to the artwork in the lobby, aswell as defendants' counterclaim for waste, were all dismissedwith prejudice. This appeal and cross-appeal followed.


I Artists' Moral Rights

A. History of Artists' Moral Rights

Because it was under the rubric of the Visual Artists RightsAct of 1990 that plaintiffs obtained injunctive relief in thedistrict court, we must explore, at least in part, the contoursof that Act. In doing so it is necessary to review briefly theconcept of artists' moral rights and the history and developmentof those rights in American jurisprudence, which led up topassage of the statute we must now examine.

The term "moral rights" has its origins in the civil law and isa translation of the French le droit moral, which is meant tocapture those rights of a spiritual, non-economic and personalnature. The rights spring from a belief that an artist in theprocess of creation injects his spirit into the work and that theartist'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 arepersonal to the artist, moral rights exist independently of anartist's copyright in his or her work. See, e.g., 2 Nimmer onCopyright 8D-4 & n. 2 (1994) (Nimmer).

While the rubric of moral rights encompasses many varieties ofrights, two are protected in nearly every jurisdiction recognizing their existence: attribution and integrity. See ArtLaw at 420. The right of attribution generally consists of theright of an artist to be recognized by name as the author of hiswork or to publish anonymously or pseudonymously, the right toprevent the author's work from being attributed to someone else,and to prevent the use of the author's name on works created byothers, including distorted editions of the author's originalwork. See, e.g., id. at 419-20; Nimmer at 8D-5. The right ofintegrity allows the author to prevent any deforming or mutilating changes to his work, even after title in the work hasbeen transferred. See, e.g., Art Law at 420.

In some jurisdictions the integrity right also protects artworkfrom destruction. Whether or not a work of art is protected fromdestruction represents a fundamentally different perception ofthe purpose of moral rights. If integrity is meant to stress thepublic interest in preserving a nation's culture, destruction isprohibited; 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 Lawat 421; see also 2 William F. Patry, Copyright Law and Practice1044 n. 128 (1994) (Copyright Law) (noting the different modelsbut suggesting that "destruction of a work shows the utmostcontempt 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 andstate courts typically recognized the existence of such rights inother nations, but rejected artists' attempts to inject them intoU.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, suchas copyright, unfair competition, invasion of privacy, defamation, and breach of contract. See Nimmer at 8D-10; Art Lawat 423.

In the landmark case of Gilliam v. American BroadcastingCompanies, Inc., 538 F.2d 14 (2d Cir. 1976), we relied oncopyright law and unfair competition principles to safeguard theintegrity rights of the "Monty Python" group, noting that although the law "seeks to vindicate the economic, rather thanthe personal rights of authors . . . the economic incentive forartistic . . . creation . . . cannot be reconciled with theinability 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 decisionsprotecting artists rights are often "clothed in terms of proprietary right in one's creation," we continued, "they alsoproperly vindicate the author's personal right to prevent thepresentation of his work to the public in a distorted form." Id.

Artists fared better in state legislatures than they generallyhad in courts. California was the first to take up the task ofprotecting artists with the passage in 1979 of the California ArtPreservation Act, Cal.Civ.Code Section(s) 987 et seq. (West1982 & Supp. 1995), followed in 1983 by New York's enactment ofthe Artist's Authorship Rights Act, N.Y. Arts & Cult. Aff. LawSection(s) 14.03 (McKinney Supp. 1995). Nine other states havealso passed moral rights statutes, generally following either theCalifornia 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 beenintroduced 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 andintegrity, 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 asignificant difficulty for U.S. adherence. See Copyright Law at 1022 ("The obligation of the United States to provide droitmoral . . . was the single most contentious issue surroundingBerne 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 moralrights 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, theUnited States joined the Berne Convention . . . . [C]onsensus over United States adherence was slow to develop in large partbecause of debate over the requirements of Article 6bis.").

Congress passed the Berne Convention Implementation Act of1988, 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 adheringto the Convention, its provisions are not enforceable through anyaction brought pursuant to the Convention itself, and neitheradherence to the Convention nor the implementing legislation expands or reduces any rights under federal, state, or common lawto claim authorship of a work or to object to any distortion,mutilation, or other modification of a work. See id. Section(s)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 Actof 1990 (VARA or Act), Pub.L. No. 101-650 (tit. VI), 104 Stat.5089, 5128-33 (1990). Construing this Act constitutes thesubject 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 bringsto fruition Emerson's insightful observation.

Its principal provisions afford protection only to authors ofworks of visual art — a narrow class of art defined toinclude paintings, drawings, prints, sculptures, or photographs produced for exhibition purposes, existing in a single copy orlimited edition of 200 copies or fewer. 17 U.S.C. §(s) 101(Supp. III 1991). With numerous exceptions, VARA grants threerights: the right of attribution, the right of integrity and, inthe case of works of visual art of "recognized stature," theright to prevent destruction. 17 U.S.C. §(s) 106A (Supp.III 1991). For works created on or after June 1, 1991 — theeffective date of the Act — the rights provided for endurefor the life of the author or, in the case of a joint work, the life of the last surviving author. The rights cannot betransferred, but may be waived by a writing signed by the author. Copyright registration is not required to bring an action forinfringement of the rights granted under VARA, or to secure statutory damages and attorney's fees. 17 U.S.C. §(s) 411,412 (1988 & Supp. III 1991). All remedies available under copyright law, other than criminal remedies, are available in anaction 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 Section(s) 101, as did the districtcourt when presiding over this litigation. The district courtdetermined that the work of art installed in the lobby ofAssociates' building was a work of visual art as defined by VARA; that distortion, mutilation, or modification of the work wouldprejudice 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 workin 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, tobe analyzed under VARA as a whole, rather than separate works tobe considered individually. This finding was a factual onereviewed under the clearly erroneous standard. For purposes offraming 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'slobby. 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 themethod by which the artists created the work — eachadditional element of the sculpture was based on the element preceding it so that they would mesh together. The result was athematically consistent, interrelated work whose elements couldnot be separated without losing continuity and meaning. See 315. The record evidence of singleness was confirmed at therequest of the parties by the district court's own inspection ofthe work.

Appellants' primary contention is that the finding of singleness is inconsistent with a finding that certain works ofart were separate from the work that is the subject of thisappeal. This assertion rests on the mistaken belief that theparties' joint stipulation to a definition of "the Work" precluded an ultimate determination by the factfinder that mostbut not all of the work installed in the lobby was a singleartwork. In other words, according to appellants, either everycomponent in the stipulated definition is part of a single workor every component is an individual work; there is no middleground. Appellants' goal is to have VARA applied to each elementof the sculpture individually, so that components that may not bevisual art standing alone cannot be considered visual art whenthey are combined by the artists to create a whole that has anature different than the mere sum of its parts.

Appellants' goal is not attainable. The parties stipulated thatwhen they used the term "the Work" it included a list ofsculptural components. The result was that during the trial there was no dispute as to the parties' meaning when referring to "theWork." The trial court was free to find that a few items of "theWork" were separate works of art, while the remainder of "the Work" was a single, interrelated, indivisible work of art. Thefinding 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 relevantpart 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, consideredas a whole, the work is a sculpture and exists only in a single copy. Therefore, the work satisfies the Act's positive definitionof 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 othermedia, such as audio-visual works and motion pictures, due to thedifferent circumstances surrounding how works of each genre arecreated and disseminated. See H.R. Rep. No. 514 at 9. Althoughthis 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, citingKieselstein-Cord v. Accessories By Pearl, Inc., 632 F.2d 989, 997(2d Cir. 1980). Defendants' assertion that at least parts of thework are applied art appears to rest on the fact that some of the sculptural elements are affixed to the lobby's floor, walls, andceiling — all utilitarian objects. Interpreting applied artto include such works would render meaningless VARA's protectionfor works of visual art installed in buildings. A court shouldnot read one part of a statute so as to deprive another part ofmeaning. See, e.g., United States Nat'l Bank of Or. v. Independent Ins. Agents of America, Inc., 508 U.S. 439, ___, 113S.Ct. 2173, 2182 (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 thework standing alone were applied art, "nothing in VARA proscribesprotection 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 acollage, 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 underthe Act.

III Work Made for Hire

Also excluded from the definition of a work of visual art isany work made for hire. 17 U.S.C. §(s) 101(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 heremployment." Id. Section(s) 101(1). Appellants maintain the work was made for hire and therefore is not a work of visual art underVARA. The district court held otherwise, finding that theplaintiffs 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 (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 workwas produced for hire (by an employee) or was produced by anindependent contractor. Reid, 490 U.S. at 751. The Courtelaborated 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. While all of these factors arerelevant, no single factor is determinative. Id. at 752. See alsoHilton International Company v. NLRB, 690 F.2d 318, 321 (2d Cir.1982). Instead, the factors are weighed by referring to the factsof 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 ofvisual 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 tothe presence or absence of any of the Reid factors and do so onlywhen the district court's findings are clearly erroneous. Bycontrast, the ultimate legal conclusion as to whether or not thesculpture is "work for hire" is reviewed de novo. The districtcourt correctly stated the legal test. But some of its factualfindings, we think, were clearly erroneous.

B. Factors Applied

The district court properly noted that Aymes established fivefactors which would be relevant in nearly all cases: the right tocontrol 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 toevery aspect of the sculpture's creation. Although the artistsheeded advice or accepted suggestions from building engineers,architects, and others, such actions were not a relinquishment oftheir artistic freedom. The evidence strongly supports thefinding that plaintiffs controlled the work's "manner and means."This fact, in turn, lent credence to their contention that theywere independent contractors. See Hilton, 690 F.2d at 320. Whileartistic freedom remains a central factor in our inquiry, theSupreme Court has cautioned that "the extent of control thehiring party exercises over the details of the product is notdispositive." Reid, 490 U.S. at 752. Hence, resolving the question of whether plaintiffs had artistic freedom does not endthe 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 workis meritless, particularly because each of the plaintiffs is aprofessional sculptor and the parties stipulated that professional sculpting is a highly skilled occupation. The rightto control the manner and means and the requisite skill neededfor execution of this project were both properly found by thedistrict 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 Companyand the artists clearly states that the artists agreed not onlyto install the sculpture but also to "render such other relatedservices and duties as may be assigned to [them] from time totime by the Company." By the very terms of the contract thedefendants and their predecessors in interest had the right toassign other related projects to the artists. The district courtincorrectly decided that this language supported the artists' claim to be independent contractors. While the artists' obligations were limited to related services and duties, thedefendants nonetheless did have the right to assign to plaintiffswork 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 thatin the Lobby." Carter, 861 F. Supp. at 319. The record shows the artists performed projects on the sixth floor of the building, onthe eighth floor, and in the boiler room. Thus, on at least threedifferent occasions the plaintiffs were assigned additional projects, which they completed without further compensation. Thetrial 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 agreementand their actual practice suggests) then they were not hiredsolely to install the sculpture. It makes no difference that allwork performed by the plaintiffs was artistic in nature. Thepoint is that the performance of other assigned work not of theartists' choosing supports a conclusion that the artists were notindependent 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 employeestatus. The defendants paid payroll and social security taxes,provided employee benefits such as life, health, and liabilityinsurance 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. Otherformal indicia of an employment relationship existed. Forinstance, each plaintiff was paid a weekly salary. The artistsalso agreed in their written contract that they would workprincipally for the defendants for the duration of their agreement on a 40-hour per week basis and they would only doother work to the extent that it would not "interfere withservices to be provided" to the defendants. All of these factsstrongly 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 tocreate the sculpture. This factor was not, as the district courtfound, "inconclusive." The court also wrongly ruled thatplaintiffs were hired for a "finite term of engagement." In fact,they were employed for a substantial period of time, their workcontinuing for over two years with no set date of termination (other than the sculpture's completion). Nor was the fact thatthe artists could not hire paid assistants without thedefendants' 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 offfor another day deciding whether copyright ownership is probativeof 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 thevarious Reid factors persuades us that the factors that weigh infavor of finding the artists were employees outweigh thosefactors supporting the artists' claim that they were independentcontractors. One of the factors that did not persuade us was theappellants' 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 nottransform them into "magic words" imbued with legally controllingsignificance.

Again, we emphasize that despite the conclusion reached we donot intend to marginalize factors such as artistic freedom andskill, making them peripheral to the status inquiry. The factthat artists will always be retained for creative purposes cannotserve to minimalize this factor of the Reid test, even though itwill usually favor VARA protection. Also, that the work wasproduced on the employer's premises is a necessary incident toall 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 soread Section(s) 101 runs against the broad remedial purposes ofVARA. As discussed earlier, the moral rights of the artist whoseartistic 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 neatlyinto an employee or independent contractor category. We alsorecognize that by counting indicia such as health insurance andpaid vacations against the artists' independent contractor status, it may appear that artists regrettably are being forcedto choose between the personal benefits inuring in an employmentrelationship 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.2dat 862-63.

Consequently, while the existence of payroll formalities alone would not be controlling, see Reid, 490 U.S. at 742 n.8, incombination with other factors, it may lead to a conclusion thata 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 hoursof work per week; they were furnished many of the needed suppliesnecessary to create the work; and plaintiffs could not hire paidassistants without defendants' consent. These factors, properlyconsidered and weighed with the employee benefits granted plaintiffs and the tax treatment accorded them, are more thansufficient to demonstrate that the artists were employees, andthe sculpture is therefore a work made for hire as a matter oflaw.

IV. Defendants' Counterclaim and Plaintiffs' Cross-appeal

Finally, since we have determined that the work is one made forhire and therefore outside the scope of VARA's protection, weneed not discuss that Act's broad protection of visual art andthe protection it affords works of art incorporated into abuilding. Also, as plaintiffs' sculpture was not protected fromremoval 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 fromremoval resulting in its destruction or alteration, we do notaddress plaintiffs' contentions that VARA entitles them tocomplete the "unfinished" portion of the work, that they areentitled to reasonable costs and attorney's fees, and thatappellants tortiously interfered with the artists' contract withSIG and the Limited Partnership. Finally, the district courtdismissed 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 861F. Supp. at 334-36. Appellants have failed to persuade us that itwas error to dismiss this counterclaim.


Accordingly, the district court's order insofar as it held thework was one not made for hire is reversed and the injunctionvacated. In all other respects, the order of the district courtis affirmed. Each party to bear its own costs.

These materials are not intended, and should not be used, as legal advice. They necessarily contain generalizations that are not applicable in all jurisdictions or circumstances. Moreover, court decisions may be superseded by subsequent rulings, and may be subject to alternative interpretations. Corrections, clarification, and additions are welcome here.