Tuesday, June 13, 2006

End of the Era of Personal Service Contracts?

As we speculated two weeks back, it seems that Ed Catmull wants to move away from Personal Service Contracts... The L.A. Times has now reported: As a manager, Catmull has risked losing his best people to stand on principle. He doesn't believe in employment contracts because he thinks they send the wrong message. "The first thing it says is, 'I don't trust the employee,'" he said, preferring to try to keep his best performers by treating them right... Just between you, me and the rest of the blogosphere, I've never liked Personal Service Contracts. I've seen them abused by employees, and trashed by companies when it suited their fancy. (And being in the middle of fights between artists and conglomerates over PSCs over the years has worn me out and made me cynical. They were useful in the mid-nineties when studios were reckless about handing them out, but today they are as much a straitjacket as security blanket.) I think it keeps everything clean and honest when the employee can exit when the spirit moves her. I also think it makes companies better places to work. Knowing you can lose your key employees if you don't treat them right, tends to make you treat them with more honesty and respect.


Anonymous said...

So, if a personal service contract says "I don't trust the employee", what are we supposed to make of the fact that John Lasseter is apparently the only Pixar employee under contract?

Kevin Koch said...

From what I've read, there are a handful of key people who have contracts, as a condition of the purchase of Pixar by Disney. It'd be kind of lame to pay $7.4 billion for a company and then have the key talent suddenly say they're off to do something else.

Jeff Massie said...

Catmull to the contrary, I don't think PSCs are going to disappear completely at Disney. What we have probably seen the last of is the Mouse House's managerial compulsion to sign everyone up with their own blood as a condition of employment.

It'll be interesting to see if other studios start to follow suit. The competition may (with good reason) fear to lose good people to the Burbank/Emeryville axis, but on the other hand they'll lose those people anyway if they don't back off on employment conditions such as those notoriously vague "run-of-picture" deals.

Believe it or not, sometimes screwing your employees isn't the best business decision.

Anonymous said...

How can the employees have possibly "abused" the contract system? Do you mean the few people who freelanced for other places? That bugs me, as in those cases the freelancers were pretty much the most highly-paid "stars" at, say, Disneys. Those guys didn't need the contracts in the first place-they were always sure of a job anywhere and got their huge signing bonuses and sweet deals because they were already stars and in demand.
However, the guys lower on the food chain benefited by contracts; it provided better security 90% of the time, which sure beats worrying about getting 2 weeks notice whenever things are slow.

Isn't it a possibility that the "trust" issue is really one of "where else are you gonna go?".

Anonymous said...

Wait are you talking about the same contract I have? Because mine says they can fire me at any time but I can't leave any time. And I don't know any "lower on the food chain" people who might have better contracts than mine.

Kevin Koch said...

I hope you realize that the "we can let you go whenever we want, but you can't leave till the contract is over" clause turns your contract into an "at will" contract -- which means that either party can end it at their will. In other words, such contracts are pretty worthless.

Steve Hulett said...

Most of today's PSCs are "at will" deals, and not worth much. They are mainly used for intimidation. Some few have hard end dates, and are actually worth the paper they're written on. The silliest PSCs I saw were at the beginning of the "contract for everyone" era in the early nineties: Then, Disney forced inbetweeners and trainees to sign contracts for scale wages. Everybody pretty much had to sign as a condition of employment, and there were no guarantees of long-term employment. We grieved these contracts and got them changed.

Today, many personal contracts (again) have no employment gurantees. But what happens is, companies get huffy if somebody tries to exit before the studio wants them to, and employees get mad if the studio lays them off before the end of "run of picture," a feel-good term in many personal service contracts which employees erroneously believe is some kind of job guarantee.

I'm reasonably sure Catmull and Lasseter (and a handful of others) have term deals. (Hard start dates, hard end dates). You can only take this "trust the employee" thing so far. Sometimes business and bottom lines intrude on the good faith and trust.

Anonymous said...

It's my understanding that they have layoff's at Pixar. When a show is done they lay people off. If a show gets re-written they lay people off.
If Disney does not have contracts then they can lay people off......if Disney decides it wants to stop production and re-write the story.
I'm not sure how I feel about Disney getting rid of PSCs, but maybe in 4/5 years WDFA will be a great place to work, but as of right now there seems to be a lot of people concerned about the future than before Disney bought Pixar.

Steve Hulett said...

Most of the recent employment contracts I have seen at Disney are "at will." Meaning they can lay you off when they choose.

There are also -- for a chosen few -- "term contracts" that offer a GUARANTEE of employment for a set amount of time. These were the norm in the mid-nineties, but not now. Term contracts have more value for an employee than the "at will" variety.

Looking at Disney Features' announced desire to eliminate Personal Service Contract, I think the policy will evolve over time, especially if allowing everybody to be a week-to-week staffer doesn't pan out as they think it will.

Steve Hulett said...

Re "fire you at any time but you have to stay until they say so..."

If you can get axed when management wants, then you can leave when YOU want. That's the law. An employer -- despite what they might say -- can't have it both ways.

That's called "slavery." And we haven't reinstituted it yet, so far as I know.

Steve Hulett said...

Re my statement above that employees "abused" psc contracts, here's what I meant:

A decade ago, when salaries were shooting up, some employees who had signed long-term deals at what they thought were solid wages became disgruntled when newbies were getting paid ever MORE. So some of the artists who had years to go at lower salaries than they liked worked to break their personal service contracts. This is what I meant by "abuse."

Sometimes the companies threatened legal action, sometimes they didn't. BUt it was an...interesting time.

Anonymous said...

Speaking from a CG animator's perspective, what's the point of contracts now? Recently at my studio they said "we want to put you under contract for the next year". I said "no... I don't think so". What would they offer - employment for the year and 5% raise when they renew it? That's great, but I usually get a 10% or more raise every new gig. Plus, the ability to "walk" keeps companies on their toes. I'm not about to stay anywhere that gets really ugly - not when there's so many good jobs out there right now. Don't get me wrong, I'm loyal and all. But business is business.

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