Hollywood’s writers are taking their battle against their agents to court.
The Writers Guild of America on Wednesday said it has filed a lawsuit in California Superior Court against the Big Four agencies: WME, CAA, ICM and UTA. The suit alleged a breach of fiduciary duty under state law and unfair competition practices under federal law.
“The time is right to bring this lawsuit to end these clear violations of California law,” WGA general counsel Tony Segall said at a news conference.
The announcement provided a further surreal turn in a story rife with them, with some of the most prominent creative people in the world confronting, firing and now suing the people who helped establish their careers.
The dispute stems from the writers’ objection to packaging fees, the practice by which agencies are paid by studios for bringing clients together on a project. The writers are also seeking to force agencies to divest of nascent production divisions, which they say represent a conflict of interest. The agencies maintain that these structures benefit all parties, including writers.
The writers and agents have been without an agreement to govern their relationship since one expired last weekend.
The WGA had drafted a code of conduct for agencies that calls for banning packaging fees, with 95 percent of the guild’s members voting in favor of implementing it. The guild then asked agencies to sign it. The Big Four agencies have refused to do so.
As the agreement expired with the sides far apart last weekend, the WGA called on writers to fire any agent who has not signed the code of conduct. Many have done just that, going public on social media with their actions.
The lawsuit’s eight plaintiffs are some of the more prominent creators in Hollywood, including “The Wire” creator David Simon and “Cold Case” creator Meredith Stiehm. All allege they have been exploited through packaging fees collected by the Big Four.
“Packaging fees create numerous conflicts of interest between writers and the Agencies serving as their agents,” the complaint said, calling the practice one that caused “tremendous harm” to the financial and professional interests of writers.
“The consequences of packaging for television writers have been profound. Despite growing demand for television series, driven in part by the entry of companies like Netflix, Amazon, Apple, and Facebook into the production and distribution business, and despite the unprecedented profitability of the entertainment industry as a whole, overscale compensation for writers has been stagnant over the last 15 years,” it said.
At the news conference, Stiehm outlined a situation in which her agents have received nearly as much money as she has for creating “Cold Case,” which said was unfair.
Among the remedies it seeks, the WGA wants the court to declare packaging fees unlawful, prevent the agencies from collecting future fees and require the agencies to make restitution on lost writer revenue caused by the fee structure.
The lawsuit also cites the Taft-Hartley Act, the federal law passed in 1947. Although often invoked to restrict the power of unions, the so-called anti-kickback section prohibits “any employer or association of employers to pay, lend, or deliver, or agree to pay, lend, or deliver, any money or other thing of value … to any representative of any of his employees who are employed in an industry affecting commerce.” Lawyers for the WGA say agency packaging fees fall under this ban.
The Association of Talent Agencies, the group that represents the agents, responded to the lawsuit late Thursday.
“This development is ironic given that the guild itself has agreed to the legitimacy of packaging for more than 43 years. Even more ironic is the fact that the statute the WGA is suing under prevents abuses of power and authority by labor union leaders, even as the guild has intimidated its own members and repeatedly misled them about their lack of good faith in the negotiating room,” the group’s executive director, Karen Stuart, said, referring to Taft-Hartley.
The statement also cited the “long-term uncertainty” protracted litigation could yield and said it believed that “in the interim it remains in the best interests of writers to be represented by licensed talent agencies” -- an apparent attempt to induce writers to re-hire or not fire their agents, against the WGA’s mandate.
While many experts privately thought a lawsuit was a strong possibility, the quick turns of events was unexpected. The legal action comes less than a week after the call to fire agents and at a moment when some thought the sides might be returning to the bargaining table.
In an interview Wednesday, WGA West President David Goodman said that the quick turnaround should not be a surprise.
“We always had this as part of our strategy,” he said. “The lawsuit is really at attempt to try and address the situation and make agencies realize this has to be fixed. It wasn’t a matter of the negotiations falling apart and then there was a lawsuit. It’s all part of the same thing.”
Goodman said that negotiations can continue as the suit moves forward but that the WGA was waiting for the ATA to make contact with him and his team. “They agencies are the ones who’ve made it clear that they’re not taking it seriously. If they’re ready to do that, we’re here." There are no talks scheduled.
The WGA said that writers will continue working during the agency showdown, with new deals negotiated by lawyers and managers. The ATA has argued via its law firm that such deputizing is a violation of California law.
Goodman said there was no timetable for lifting the WGA’s firing requirement, saying he would let WGA members’ opinions dictate that. But he said writers’ ability to continue to work (which was not the case during a strike against producers 11 years ago) would limit or even eliminate any hardship a writer would face — and thus potentially also reduce the urgency of rehiring agents.
Although many writers have said they love their individual agents and would not be where they are without them, they believe that the action is necessary, citing the alleged conflict of interest and lowered wages.
The only major figure known to publicly disagree with the WGA is the decorated playwright and TV creator Jon Robin Baitz, who said he would not fire his agents at CAA and called for a new direction at the guild.
Baitz said he seeks a “mature, measured, and considered philosophy, one that does not depend on the politics of divisiveness,” echoing the stance of some agents who privately say the WGA is taking a hard-line stance.
Goodman disputed this idea.
“When people say I’m taking a hard line. Well, I’m taking a hard line because I have to protect our members," he said. “Their incomes are dropping, and we’ve got to fix that.”