On January 8, 2026, the U.S. District Court in the Southern District of New York granted Universal Music Group’s motion to dismiss, and in so doing, prevented hip-hop group, Salt-N-Pepa, from exercising its termination rights under Section 203 of the Copyright Act. Universal argued, and the district court agreed, that Salt-N-Pepa never owned the copyrights to the sound recordings at their inception, and therefore, could neither transfer nor terminate them.
In March 2022, Salt-N-Pepa filed Notices of Termination pursuant to Section 203, and Universal responded with counter-notices in opposition, claiming that the Notices of Termination were invalid because Salt-N-Pepa had not made a grant of sound recordings to UMG (or its predecessors) or, in the alternative, that the sound recordings were works made for hire. Salt-N-Pepa initiated a lawsuit against Universal in May 2025, in part seeking a declaratory judgment that the Notices were valid.
In its Motion to Dismiss, Universal argued that the hip-hop group could not exercise any termination rights under Section 203 because it never owned the copyrights to the sound recordings, and therefore, could neither transfer nor terminate them based on the original contract language between the group and NITA (a Universal predecessor). Alternatively, Universal argued that the sound recordings constituted works made for hire, making Universal the legal author of the works and rendering Salt-N-Pepa’s notices invalid.
The District Court agreed. In granting Universal’s motion, the Court focused on the original 1986 contract between Salt-N-Pepa and NITA, which expressly provided that NITA “shall be the exclusive and sole owner of any and all rights, title and/or interest in and to master recordings…, including but not limited to the worldwide sound copyrights therein.” According to the Court, this language confirmed that Plaintiffs never owned the copyrights to affect a transfer of copyrights, but rather, served as an acknowledgement by Plaintiffs that NITA (now Universal) would be sole copyright owner of any master recordings created pursuant to their agreement.
Notably, verb tense was crucial to the District Court’s decision. The District Court noted that for assignments, like a transfer of copyright which may be subsequently terminated, “it is sufficient if the assignor has, in some fashion manifested an intention to make a present transfer of his rights to the assignee.” But the 1986 contract utilized the future tense, noting that NITA “shall be” the exclusive owner. This language showed that, at its inception, NITA would serve as the exclusive and sole owner of the sound recordings.
Specifically, the Court found that neither the 1986 agreement nor any subsequent agreement characterized the artist as the owner of the copyrights, let alone effected any transfer by the artists of the copyrights.
Salt-N-Pepa has announced they plan to appeal the decision.
Perhaps more daunting, however, is the Court’s commentary on the work made for hire issue. While the Court ultimately declined to rule on whether the sound recordings constituted a work made for hire, as defined under the Copyright Act, it did suggest that the sound recordings likely did qualify as a work made for hire based on the 1986 contract’s language. The Court’s analysis detours significantly from well-settled law that sound recordings, standing alone, cannot qualify as a work made for hire.
The District Court’s ruling, assuming Universal prevails through the appeals process, poses a serious threat to artists in reclaiming their rights to their sound recordings. We urge artists to insist on proper provisions (1) confirming a present manifestation to grant and/or transfer the rights to their sound recordings, (2) an explicit acknowledgement from the record label that the artists may timely file Notices of Termination pursuant to Section 203 of the Copyright Act, and to the extent possible, (3) an express disclaimer that the artist is an independent contractor and the sound recordings created shall not constitute a work made for hire.
If you have questions regarding an artist’s termination rights, Womble’s team of experienced music attorneys are ready to assist.
