Monday, December 07, 2015

Wage Fixing

Cartoon Brew spotlights some litigation:

Disney stockholder Eugene F. Towers’ suit alleges that the Disney board of directors knew of the conspiracy [not to compete for the skilled labor of artists and technicians — to the broadening of the conspiracy, to include Disney, DreamWorks, ImageMovers, Blue Sky, and Sony] alleged in the related lawsuit, and “actively concealed and ensured the secrecy of the conspiracy.” Because the board members filed financial statements and certifications, and “signed each of the Company’s annual reports filed with the U.S. Securities and Exchange Commission,” they are alleged to be guilty of signing “and/or certif[ying] false and misleading statements.” ...

People ask me about industry wage fixing from time to time, and I always say that, yeah, I suspect that collusion and non-compete agreements are going on. You only have to look at the amount of work today, and compare it to the go-go nineties, when there was less but higher wages; way higher wages, when you consider the steady rise of wage minimums and the competition for key artistic personnel.

The trouble (as always) is proving the amount and level of collusion. Studios are good (usually) at covering their tracks. Executives are well-versed in having plausible deniability when there's a threat that a pesky judge will find for the plaintiffs and the studio(s) might have to cough up a few hundred million in settlement money.

We live in an era of high-flying corporatism, so I'm always skeptical about executive heads rolling because a few movie conglomerates restrained competition and suppressed wages.

George Lucas and Ed Catmull admitted in depositions that they were doing exactly that, and both believed they were performing useful work by holding salaries back and thereby making the industry "stronger" and "more viable." Dr. Catmull doesn't believe in Personal Service Contracts and there's no reason he should. They tend to raise salaries and make employees more aware of what they're making.

Mr. Lucas and Dr. Catmull have, of course, paid dearly for their admissions of collusion. Mr. Lucas is now a billionaire several times over, and Dr. Catmull writes books about Pixar and builds elegant bay area homes.


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