At first glance, the “global girl group” KATSEYE appears as glittery and whole as the cat’s eye gemstone it was named after. But all is not as it seems. Known for dynamic choreography and a Y2K aesthetic sharp enough to land a Fendi campaign, the group was recently dropped into a sea of online discourse when its only Black and European member, Manon, went on hiatus. The group’s label, Hybe, cited health reasons, which has done nothing to deter the think pieces and rumors.
But Manon going MIA is not the only opaque element of KATSEYE. What legal framework even governs this type of situation? It is neither a straightforward K-pop group nor a conventional American girl group. The group is the first act produced out of a joint venture between Hybe — the Korean music company behind BTS and Le Sserafim — and Geffen Records. Trained for a year in Los Angeles under the Korean idol methodology, making English pop songs and nominated for a Grammy — these international infrastructures all operate simultaneously with no obvious answer for which country’s rules apply to which part of the relationship.
To better understand this, I sat down with Daniel Schacht and Melanie Kim, both attorneys at Donahue Fitzgerald LLP in Oakland. Schacht is a 2008 graduate from the UC Berkeley School of Law and a current professor who spent a decade trying to make it as a musician before pivoting to law. He now runs the firm’s music and entertainment practice, often working with independent artists as they navigate label contracts. Kim is a fifth-year associate specializing in employment law, defending employers in litigation and providing counseling to employers on California Employment Law. They’re here to explain the hazy machinery that governs this collaboration — and that machinery turns out to be more complicated than K-pop’s repressive reputation suggests.
In the K-pop industries, companies recruit children — sometimes as young as 10 or 12 — sign them to exclusive contracts and invest years training them in singing, dance, facial expressions and image before they debut publicly. During that time, trainees are often classified as “interns” or “independent contractors” rather than employees, which limits their access to basic labour rights. Once they do debut, contracts cover not just their music but their personal conduct, travel, relationships and public image. In 2023, idol Chuu from the girl group Loona revealed she had earned less than minimum wage for more than four years of work despite a packed schedule of TV appearances and commercials, with her company taking a 70% cut of her earnings.
But the K-pop system isn’t alien. It’s an intensified alternative to what the U.S. system has already done and has only partially moved away from. Dr Schacht notes that while the K-pop methodology is notoriously restrictive, the trainee system mirrors the American industry’s past and present with “classic labels like Motown, where they groomed and developed artists (through) ’finishing schools’ so they would walk properly.”
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KIM: From the employment perspective, in California, there’s two classifications of workers — employees and independent contractors. Single artists like Miley Cyrus who contract with record labels are independent contractors rather than employees. So all of the protections that California legislates for employees — like meal breaks or that an employer can’t punish them for off-duty conduct — typically don’t extend to independent contractors.
In California especially, the record label lobby is very strong, so there’s even less protection for musicians in some cases. Take Uber. They lobbied so hard that the court didn’t find that Uber drivers were employees. They found that they were independent contractors.
These companies are saying, “You’re getting the worst of both worlds here. You don’t have the employment law protections and you don’t have the rights.”
JOU: What if they put a member on a break?
SCHACHT: Labels never have an obligation to put music out. When I was doing music, there was a case where somebody got signed and everyone’s excited: “Yay, a local musician got signed!”
Completely shelved. Never had her album released. She’d have been better off releasing it herself. But it took many years for her to work on it, deliver it, sit there, twiddle her thumbs, and finally realize this is never coming out.
What we always ask for are the rights to revert: “Listen, if you don’t release this within a certain amount of time, then the rights will come back.” The labels don’t have a good argument not to agree to it, because what do you benefit from not releasing? Sometimes they say, “You have to send us a notice, and then we have another six months to try and release it.” Fine.
The other question comes about the costs, because often the labels say, “If we put $200,000 into this we need to see that money back,” which is not an unreasonable position to take. Sometimes you can negotiate by saying, “Okay, we’ll take it off the royalties that come in.” But in the K-pop situation, where labels claim to have spent millions on young artists, good luck trying to make that back. If they are claiming all these costs should be reimbursed, you have an artist with a huge deficit account that’s realistically not going to see a dime, especially if it’s subject to label accounting.
JOU: I believe because they’re basically in a boarding school to become a K-pop idol, the company factors in food, housing and clothes.
SCHACHT: That echoes the older arguments of record labels here in the U.S., back when recording and manufacturing was much more expensive. They would say: “Look, for every 10 artists we invest in, the one who makes it has to pay for the other nine.” There’s an economic reality to that in creative business, where most people don’t succeed. But you can also see how that becomes an easy argument to have exploitative contracts.
KIM: K-pop idols’ standard now is for groups to sign into seven-year contracts. That came about in 2009 when TVXQ sued SM, and SM was standardly signing artists for 10-13 years. They called it slave contracts. They got it changed to seven.
In California, any contract in which a person agrees to render personal service is limited to seven years since the 1930s. But the record label lobby had an exception written into that statute. It’s in the California labor code section 2855, subsection B, for services related to the production of photo records — basically albums. In addition to the seven years, it will have a requirement that the artist release seven albums or 10 albums within the contract. At the time the seven-years run out, if the artist hasn’t released seven albums, the music label can hold the artist to that album count. Basically, it’s eviscerating the seven-year statute for artists.
That has become an issue when record labels shelve artists and don’t let them release albums. If they have a contract to release seven albums, but the label says no to albums, the contract extends longer and longer, leading to the problem of slave contracts all over again.
I’m not sure in the Korean context whether there’s that music exception. I think seven-year contracts do end at the end of seven years. So that is a difference between California and Korean law.
In the context of her hiatus, I wonder if it affects her term with the American record label company. At the end of the seven years, will they ask her to pay damages for breach of contract for not completing the same number of records as everyone else did?
JOU: What happens when you breach a contract?
SCHACHT: Under U.S. law, you’re never going to get a court saying you must do something. A court will rarely say “you must show up to a photoshoot” — that implicates the 13th Amendment and is disfavored. Courts don’t want to force people to appear for those civil injunctions.
So then the question is, what does the label do? Do they sue for damages, or do they just go without money? Anytime you can measure the amount of damages in money, the court will prefer that approach. The hard part is measuring how much it costs the label when the artist doesn’t show up to a photoshoot. It’s hard to quantify.
So it’s very hard to sue for damages for not showing up at a photoshoot. You could. But now you’re going to air your dirty laundry in public, and you might not have a remedy. It’s a publicity issue; it doesn’t look good to be suing your own artist.
KIM: I think the only thing I can add to that is that there were some statutory reforms on K-pop contracts. The label has to consider the artist’s mental health while scheduling photoshoots (shoots and recording), and the artist can’t refuse schedules for unreasonable reasons.
That was a reaction to K-pop celebrities’ mental health being in the headlines a lot. Like suicides, fan concern and national news. Right now, I don’t think that exists in California — that the employer has to take into consideration their mental health. Maybe if it becomes more like a matter of public concern in the US, there will be more legislators trying to govern what can be in the contract.
SCHACHT: The US copyright act tends to be — much like the U.S. — very focused on money and individual rights. If you look at Europe, they tend to be more focused on moral rights, and the rights of an author are innate. So there are more rights that are inalienable. There might be different limitations on what you can sign or what you can do with someone’s name that aren’t as applicable in the U.S.
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The picture that emerges isn’t flattering, and not only for K-pop. The contractor classification that strips artists of workplace protections exists in California, too. The rule designed to protect performers has a carve-out that effectively nullifies it for musicians.
And yet there may be forces pushing back that aren’t strictly legal.
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JOU: If you’re advising a relatively young adult who’s signing to a girl group like this, how would you advise them?
SCHACHT: My own track record with younger artists is helping them get more artist-friendly deals. But I think ultimately it’s about artist choice, right? If all they care about is becoming famous, this might be the best vehicle for them. Now you want to acknowledge that for every KATSEYE, there’s how many hundred folks that don’t make it.
You have to ask what’s important. In the end, our job as lawyers is not to make the decision for an artist, but to help them make the best, informed decision for themselves.
JOU: Because there’s always the fear that this will be the only opportunity and then there won’t be any others?
SCHACHT: I think for some people. If somebody has a clear-eyed vision of what’s going on they may say, “Yep, I understand that this is going to lock me in for a long time.” Now, as an attorney, you want to be able to negotiate and get a better deal. And sometimes there are things you can fix. But at the end of the day, you’re not going to get a super artist-friendly deal on some of these instances, particularly where the client has no track record.
We represented a local artist, mxmtoon. She had a following before she signed with any label. That’s a track record — very different from some of these folks who have a dream, but not much else yet. Maybe they have great talent, but they don’t have fans or a track record, and so then they’re in the situation, wondering, “Am I just one of several thousand people that if they pass me over, or if I make too many demands, they’ll just grab somebody else who doesn’t read the contract?”
JOU: So it’s similar to acting and publishing, where social media could give you a little bit of leverage?
SCHACHT: I mean, it’s hard. Take that example of a woman whose album was shelved. In retrospect, she would have been better putting out that album herself, working on a second one, and releasing a third without a big marketing budget, all before the label even decided the first album was going to be shelved. But that’s in retrospect. Those things are hard to foretell, and it’s an industry where you need all the stars to align to become successful.
Was that too pessimistic?
KIM: No, I think that’s the reality. There’s an imbalance of power. Especially in an industry where a few big companies dominate.
SCHACHT: If you have too few players in the market, you’re going to have worse contracts. This consolidation of labels does not help artists. If we’re talking about what the government could do, it is to make sure that there’s more competition. So somebody would be able to have different offers on the table, so that labels have a real bidding war rather than a sort of conglomerate that can dictate market terms.
I think there is a general shift toward more artist-friendly deals. I think fans like it. “American Idol” got backlash about their exploitative contracts.
Artist independence is a value here that’s thankfully taken hold. It’s a cliche of exploitative labels.
JOU: But the K-pop system is insanely profitable. If a record label says, “We really want to do this here,” would public backlash and current laws stop it from happening?
SCHACHT: That’s a good question, because American labels love to make money.
KIM: They have a strong lobby. And the power to shape laws.
SCHACHT: Think about somebody like Taylor Swift. She pushed hard on Apple, not just on behalf of herself, but on behalf of all artists to get paid fairly when they were trying not to pay artists for the complimentary subscriptions. I wonder if here you might also get some pushback from artists who themselves are opposed to these kinds of restrictive deals and restrictive business arrangements.
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The glitter of a group such as KATSEYE is held together by a legal machinery that is frequently one-sided. California has a reputation as the “good guy” in the story: the jurisdiction with protections strong enough to check what Korea’s system permits. But there are holes, and corporate lobbying has used those holes to carve out necessary protections.
The protection has shifted from the courtroom to the comment section. KATSEYE fan “gossip” is actually the same mechanism that holds labels accountable for their unfair treatment. But fan accountability is a fragile defense.
It’s not just that artists should “say no” to exploitative deals, although that is important. A structural shift is also necessary. Whether through the revival of antitrust competition or the closing of California’s contractor loopholes, the burden of protection belongs to the law. Until then, the best bet for the next generation of creators is a radical “clear-eyedness” — a recognition that in the world of pop, your talent is ultimately a product, and the contract a gorgeous golden cage.