Defendants' Concerted Efforts to Evade Regulation as Employment Agencies
42. GBL 170 - 190 were consistently understood to apply to "modeling agencies" such as Defendants until the 1970's, when - according to court papers filed by counsel for Defendant Elite (then a newcomer challenging the duopoly of Ford and Wilhelmina), "the principals of the major modeling agencies of the City of New York, agreed among themselves to raise commissions charged to the models and to circumvent the licensing requirements required by the statutes of the State of New York." Ford Models.inc. V. Pillard, Index No. 1148/77, Levinson Affidavit, Aug. 26,1977, at ~ 9 (emphasis added). This affidavit, by Elite's own lawyer, told the Court that Elite was prepared to present sworn testimony from a witness to the meeting at which Ford and Wilhelmina agreed to collude to raise prices and evade the 10% legislative cap.
43. According to that affidavit from Elite's own lawyer, Ford led this coordinated move to circumvent GBL 170 - 190 when it returned its employment agency renewal notice in 1971 and claimed that the agency had "now become management." This statement appears in an April 15,1971 letter from Gerry Ford to the New York City Department of Consumer Affairs in the Ford v. Pillard docket.
44. Whatever changes Ford and other agencies made to "become management" were superficial at best. For example, work vouchers that used to read "Ford Model Agency Incorporated" were changed to read "Ford Models, Inc." The day-to-day operations of both Ford and Wilhelmina changed little if at all.indeed, both Ford and Wilhelmina now represent to the I
public that they have been in business continuously as "model agencies" since before the I purported change in their status. ~ http://www.fordmodels.com/content. Cfm? Content id=5&client id=&client email= (Ford's website) (May 23), http://www.wilhelmina.com/aboutiabout index01.html (Wilhelmina's website) (May 23). And in fact, each Defendant continues to regularly procure employment for its models.
45. Shortly after Ford returned its license to the Department of Consumer Affairs, Ford, Wilhelmina and Elite - which later decided to drop its lawsuit and join with Ford and Wilhelmina in their unlawful conspiracy - raised their fees charged to models to 15% and then to 20%, which is now represented by Defendants to be the "standard", non-negotiable rate for model contracts in New York.
46. Defendants have also agreed and conspired to impose additional charges on Plaintiffs that would be unlawful if Defendants were licensed agencies and were required to abide by GBL 170 - 190. For example, Defendants, as unlicensed agencies, currently charge Plaintiffs for the costs incurred in advertising the Plaintiffs' portfolios, in violation of GBL 187 (10), and operate "management" divisions and other ancillary businesses from their premises, often charging Plaintiffs additional fees, all in violation of GBL 187 (8).
47. Defendants' concerted efforts to evade state law applicable to employment agencies have damaged Plaintiffs and continue to damage Plaintiffs in their business or property in that Plaintiffs are required to pay non-competitive prices for Defendants' services in the form of artificially inflated commissions, and are charged other unlawful fees and costs.
Dave
Orlando, Florida
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