Innovative deals with angry staffers

Dust settling in agency's insurance decision

Innovative Artists agents haven’t taken to the streets of Santa Monica with cries of “Attica!”, but mutinous rumblings are growing louder.

Last Friday, agency president Scott Harris announced that health insurance would only be provided to agents, junior agents, and key administrative staff. He cited cost-cutting concerns. The decision is retroactive to June 1.

What Harris sees as a way to avoid escalating medical premiums was perceived by support staff as a call to strike.

The roughly 70 affected staffers — agent assistants, mailroom workers and other employees — threatened a sick-out today in protest today. However, a source inside the agency said only a small handful in the New York and L.A. offices did so.

Instead, the low-level employees took action with a high-level lunch meeting, an unsanctioned gathering designed to plan their next move.

“We’re getting $100 less than anyone in town, and we get no over time,” said one source, who admitted that staff did get free bagels every Wednesday.

“Now we have no health insurance. At the Christmas party, Harris was boasting about profits and growth. No one knew there were money issues. Maybe we’re young and naïve, but we like to think that the bottom line isn’t just money.

“This hits people all the way down to the concierge,” stated the source, “and he has to do all kinds of extra things like build [Harris] furniture. And he has a daughter. There are people here in hospital situations. There’s a girl in a cast.”

A call to Harris’ office was not returned.

The fallout remains to be seen.

“People came to work because they’re scared, but they’re looking for jobs. I know we’re powerless, but it’s like he’s rubbing our faces in it.”

Just prior to the scheduled lunch meeting, Harris issued the following memo, obtained by Daily Variety, to staff:

I know that my change of policy is a big issue for many of you as it is for me as well. I have been quite unhappy for a long time with the annual rate hikes that Innovative has experienced year after year after year. Finally this year as it was time to go through this annual procedure I did what our clients sometimes do… I switched to a bigger insurance agency that appeared to have more power and connections.

After this change things got off to an annoyingly rocky start. After far too much time had passed, I finally got bids from the various health care providers very late in the game. When my new agent presented the choices available to us I was left with a very short window (of time) to evaluate the menu of possible options all of which included substantial rate increases. Among the various unattractive options presented the best two were:

A) To switch to an inferior insurance company that I know would make everyone on the plan unhappy (because they make the claims process a nightmare even though they had the lowest bid by far).

or

B) Figure out how to deal with another huge rate hike without changing companies AND the growing demand I also felt compelled to address this year which is the need to better compensate our assistant team.

I chose to go with option “B” for numerous reasons.

One of the key reasons that motivated me to opt in this direction is my desire to have and be able to attract top assistants by better compensating this group. There is not a way for me to both keep the assistants on our current plan and take care of their need to receive higher wages. The amount of the increases is yet to be quantified but when I do make the determination, I will pay the increase to the assistants retroactively (as of the date that Innovative no longer provided medical coverage).

Although this was always my plan I did not want to connect the two issues because I still need to figure out the new compensation schedule for our assistants.

This was an agonizing decision for me. I arrived at my determination after seeing many spread sheets of numbers and options and ways to go. I did not involve anyone else in this decision so there is no one else to blame. If I had the luxury of more time I’m sure I could have presented this to everyone in a better way but what is done is done. I apologize to any of you that felt blindsided by this but I did need to deliver in writing this change of policy.

The odd moral to this story is that my changing to an agent at a bigger and more powerful company did not produce the result one would hope for….I hope at least some of you can see the ironic humor in this.

Oddly I hardly received any phone calls from any of you (one of you to be exact) and the Emails I received could be counted on one hand. I did however receive phone calls and an Email from Mike Fleming at Daily Variety who was informed about the Innovative business decision. I enclose below his Email to me and my reply because I see no need for any secrets. There is more that I would write you but much of it is contained in my reply to Mike Fleming at DV. Mike’s Email to me is on the bottom and my reply is above it.

I’d like to conclude by saying that if any of you would like to interact with me directly about this, either individually or as a group, I would never shy away from being open minded and listening. I make no representations that I will change my mind but my door is open much wider for your feedback than it would be at other agencies. If any of you want to write me or discuss this send me an Email and I will get in touch next week on the phone or by return Email.

Scott

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