Disney, its subsidiaries join major studios in big settlement over visual talents’ claims of anti-competitive personnel practices
Animators, digital artists, and visual effects specialists for industry-leading companies like Walt Disney, Sony Pictures, 20th Century Fox, and Dream Works soon may be walking around with more money jangling in their pocket after the settlement of a sizable class action suit involving these movie-making talents.
That’s because Walt Disney Co.—including its subsidiaries Pixar, and Lucas Films— this month became the last major players to agree to a deal to resolve legal claims, with zero admission of wrongdoing, that they had a “no poach” agreement among themselves over hiring the animators and others, including sharing pay information on them. The workers had asserted these all were antitrust violations that reduced competition in the market and kept down salaries. Disney and its subsidiaries agreed to settle the claims for $100 million.
DreamWorks Animation, Sony Pictures Animation and 20th Century Fox’s Blue Sky Studios had settled with the animators earlier for roughly $70 million, sending the combined tab for Hollywood to draw to a close this labor action to nearly $170 million.
The creatives accused Disney, Pixar, and Lucas Films of conspiring to fixing wages of animators and other workers by making “non-solicitation” agreements with each other. Earlier this year, the animators, while pushing for class-certification in their lawsuit, told the court that the studios’ collusion dates back several years, and they said it suppressed their pay by as much as 30 percent in some years. The workers contended that the roots of the anti-poaching agreements trace to the mid-1980s, when George Lucas and Ed Catmull, president of Steve Jobs’ newly formed company, Pixar, agreed to not raid each other’s employees.
The complaint even has a quote from Lucas saying “we cannot get into a bidding war with other companies because we don’t have the margins for that sort of thing.” Other companies then joined the conspiracy, with agreements on practices like avoiding cold calls of others’ employees, notifying other companies when making offer to their employees, and agreeing against “bidding wars” for talent.
The “no solicitation” agreements prevented highly skilled employees from commanding better wages and job opportunities, the workers have asserted, claiming violations of the Sherman and Cartwright acts. They told the court that the agreements and anti-competitive practices were kept secret, such that a judge should set aside any statute of limitations considerations to consider their claims.
10,000 in a class
The animators went to court in 2014 with some wind in their sails, because the federal government in 2010 had investigated Silicon Valley firms like Pixar, Apple, Google, and Intel for anti-poaching practices, resulting in a settlement in which the high-tech firms agreed they would not engage in anti-competitive non-solicitation agreements. The high-tech firms also faced a class-action suit from software engineers over personnel practices they asserted were detrimental to them and competition. That case was settled in 2015 for $415 million.
As for the animators, their suit attained class-action status in May and proceeded with 10,000 potential litigants represented in it. The victories have been rolling in as of recent days. U.S. District Judge Lucy H. Koh in San Jose recently gave preliminary approval to a $50-million settlement with the animators and DreamWorks Animation. That followed earlier settlements of $13 million with Sony and $5.95 million with Blue Sky. Koh still must accept and approve the proposed settlement with Disney, the 2016 Oscar winner for best animated feature for Zootopia.
The plaintiffs’ attorneys may ask for up to 30 percent of settlement funds for attorney fees. If the court approves, each of the named plaintiffs would receive up to $10,000 each, though details are still being worked out as to how the affected parties will get their payouts.