According to multiple sources, William Morris Endeavor filed a lawsuit on Monday against the guild claiming the union’s decision to have members fire their agents to protest packaging fees is in violation of antitrust laws.
The lawsuit comes two months after the WGA sued WME and three other agencies.
In April, 95% of WGA members voted to enforce a Code of Conduct requiring agencies to eliminate packaging fees — payments to agencies from studios in exchanging for packaging writers, directors and other talent for a project — in order to represent writer clients.
Reportedly 7,000 guild members ended their representation, and additional meetings between the WGA and the Association of Talent Agents have failed to break the impasse.
After enforcing the Code of Conduct, WGA filed a lawsuit against WME, Creative Artists Agency, United Talent Agency, and ICM Partners, claiming that packaging fees were a violation of fiduciary duty by agents and against federal and state labor laws.
Now WME, whose parent company, Endeavor, has recently filed to go public, is arguing that the WGA has violated the Sherman Antitrust Act by going beyond what the law allows labor groups to act upon.
“We took today’s step with careful consideration,” WME said in a statement. “The WGA negotiating committee has made it clear both through its legal action and unwillingness to negotiate that it was never interested in making a reasonable deal. We are now left to seek a legal remedy for this dispute.”
The lawsuit also claims that managers and lawyers performing the role of agents are violating the California Talent Agency Act, an assertion that has been made for months by the Association of Talent Agencies, the group representing major agencies. Read parts of the statement below:
“Antitrust law’s protection of market competition can be in conflict with labor law’s protection of collective bargaining,” reads the complaint. “Balancing the two, Congress and the courts have granted certain union activity a limited statutory or non-statutory labor exemption to the antitrust laws. When a union crosses the limits of activity protected by the labor exemptions, its conduct becomes fully subject to antitrust scrutiny just like any other organization.”
“WGA has crossed those limits here by coercing members and non-members alike into a network of anticompetitive agreements that restrain competition in commercial markets over which WGA lacks any legitimate labor law authority or interest,” it adds.
The complaint also defends the agency against the WGA’s demands to eliminate packaging fees and affiliated production companies claiming it’s a practice that dates back to the 1950’s. While the guild deems both to be a conflict of interest since agencies who act as producers are motivated to hold down the cost of talent, the lawsuit argues that what the WGA wants is to, “grossly over-restrictive, unnecessary to redress any legitimate union concern, and intrude upon commercial activities in markets that WGA has no authority to regulate.”
“Many writers have hired WME because of its packaging services. Writers want to benefit from meeting with, and being paired with, in-demand directors and actors. The ‘package’ of talent often enhances demand for the writer’s script and services and leads to the production of TV shows and movies that would not otherwise get made,” the lawsuit argues.
The WGA replied to WME’s antitrust suit, in the Hollywood Reporter, noting, “History repeats itself. In 1975, the William Morris Agency sued the Guild for antitrust violations in response to the WGA’s campaign to prohibit packaging fees. A federal judge made an initial ruling in the WGA’s favor. There is no merit to WME’s lawsuit, and the Guild will not be bullied into a bad deal.”