Complex sentence: Johnny "Guitar" Watson; and various session musicians who had worked with Elton John, who sued the label in the 1980s over the rights to his earlier (pre- 1976) work.
Split into simpler sentences: Johnny "Guitar" Watson; and various session musicians who had worked with Elton John. The latter sued the label in the 1980s over the rights to his earlier (pre- 1976) work.