An April 26, 2022 Decision from experienced and respected Administrative Law Judge (ALJ) Eric Sawyer of the Office of Administrative Hearings (OAH) concerning the licensure of adult industry talent agency Direct Models has been made public.  ALJ Sawyer decided the three-year-old controversy after 14 days of Testimony from over 25 witnesses, with hundreds of exhibits spanning thousands of pages.

In his 63-page Decision, Sawyer rejected the assertions of the State fo California Department of Industrial Relations, the Division of Labor Standards Enforcement (DLSE) that adult industry talent agency Direct Models’ 2018 License Application should be denied and that the License should be revoked.

ALJ Sawyer also rejected assertions that Derek Hay, the principal of Direct Models had sexually assaulted models, including former performer Hadley Viscara as she had alleged.

The Decision brings to an evidentiary close the long-pending Direct Models licensing case.

While ALJ Sawyer did find that Direct Models had violated some provisions of the Talent Agent Act relating to contracts and fees, he rejected claims that Direct Models had endangered the safety of its models in some job assignments or that it had financial connections or ties to an escorting business.  Sawyer also stated that “Mr. Hay did not coerce or request his clients to participate in the escort business.”

Instead of the License rejection or revocation that DLSE Staff Attorney Barton L. Jacka sought, ALJ Sawyer found Direct Models was entitled to its License with only a four month suspension, since there had been no previous discipline and since Direct Models and Derek Hay presented substantial evidence of positive reputation within the industry.

Under California law, DLSE will have three months to consider its options on the Decision, including whether to accept or reject, or whether to allow it to be adopted by operation of law (as it did recently in a separate temporary licensing case Direct Models initiated and won).

That however will not bring the disputes between Direct Models and DLSE to an end as Direct Models has a pending claim for damages against DLSE as well as a separate lawsuit for damages filed in the Los Angeles Superior Court for DLSE abuses against Direct Models.   The Complaint alleges the intentional Interference with Prospective Economic Advantage, Abuse of Process, and the Intentional Infliction of Emotional Distress arising from their intentional abuse of discretion in refusing to continue issuing Provisional Talent Agent Act Licenses to Direct Models on April 23, 2021, while the licensing action it had initiated was still pending.

Direct Models’ suit follows a stinging 15-page Determination by ALJ Cohen of the OAH (following Hearings in September, 2021) that DLSE had abused its discretion in refusing to provide an ongoing Talent Agent License to Direct Models as the agency contested allegations listed in the Statement of Issues DLSE filed in 2018,

The Statement of Issues was instigated by attorney Allan Gelbard., four of whose clients testified at the lengthy hearing on the Statement of Issues— in largely underwhelming fashion, according to ALJ Sawyer’s decision.  Gelbard’s name also turns up in Direct Models’ Complaint in its suit against DLSE, attorney Jacka, and Labor Commissioner Lilia Garcia-Brower,  Specifically, it accuses the Defendants of misusing the processes of the law by “corresponding and conspiring with Allan Gelbard, attorney for the Jane Does, to wrongfully manipulate evidence and discovery” and by “directly interfering and damaging the ongoing business relationships of Direct Models with its performers in an attempt to affect their ability to operate[,] to reduce their income, [and] to limit future signings.

Direct Models’ attorney Richard Freeman commented: “While we view some of the conclusions and findings through a different lens than ALJ Sawyer, we do think it helps to put the allegations of the “Jane Does’ and their Attorneys (Barton Jacka and Allan Gelbard) in perspective given their inability to establish many facts by a preponderance of the evidence.

“The Judge’s comments on the Claimants’ credibility are particularly telling and gratifying, and are only the beginning of the unraveling of the Does’ claims.  The proposed ‘punishment’ of four months suspension, not license denial or revocation, are much more appropriate for what he found to be proven.  We are gratified that the Judge did reject the claims of sexual assault and impropriety against Hay as asserted by the Does.”

ALJ sawyer’s Decision, and Direct Models’ full civil complaint may be downloaded here.