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Animation Guild to Look Into Possible Action Over Studios’ ‘No Poaching’ Pacts

While a federal judge recently gave her approval to a settlement of a class-action antitrust suit over alleged “no-poaching” agreements involving Lucasfilm and Pixar, the Animation Guild is reviewing a recent report that highlighted similar hiring practices of other studios that were not named as defendants in the litigation.

Steve Kaplan, organizer for the Animation Guild, said members “are reviewing what remedies are available, if any” after PandoDaily published a series of emails and deposition transcripts suggesting that DreamWorks Animation and the Walt Disney Co. also were involved in so-called “gentlemen’s agreements” to not raid each other’s animation work forces. Such hiring practices came under the scrutiny of the Justice Department as well as a class action lawsuit, but both studios were not named as targets of an investigation or as defendants.

“This obviously impacts our membership,” said Kaplan, adding that the guild was consulting with its attorney.

Steve Hulett, business representative for the guild, Local 839 of IATSE, posted about the story on the guild blog on Tuesday, writing that “when a group of wealthy executives get together to make sure that market forces don’t perform as they might, well, people suffer. (Mostly people that have to pay rent and meet a mortgage.)”

The emails were made public during the discovery process in the civil class action case, and some, including those suggesting the involvement of Disney and DreamWorks in the hiring arrangements, were reported by Reuters more than a year ago. But they drew the attention of the guild and others in the animation and visual effects community this week, after the PandoDaily report.

Among the emails are one from Pixar’s Ed Catmull to Dick Cook, then chairman of Walt Disney Studios, in which Catmull refers to agreements between companies, including DreamWorks and ILM, not poach each other’s employees.

“We have avoided wars in Norther[n] California because all of the companies up here — Pixar, ILM, DreamWorks — and couple of smaller places — have conscientiously avoided raiding each other,” Catmull  wrote to Cook. In the email, Catmull was lamenting that Robert Zemeckis’ company has hired “several people away from DreamWorks at a substantial salary increase.”

“I know there is a logic to being up here because of ILM’s weakened state, but every time a studio tries to grow rapidly, whether it is DreamWorks in 2D animation or Sony in 3D, it seriously messes up the pay structure,” Catmull wrote.

Cook responded, “I agree. We will reaffirm our position again. As for Pixar or Disney, they absolutely know they are off limits.”

The Walt Disney Co. acquired Pixar in 2006 and Lucasfilm in 2012 , but according to emails disclosed in the litigation, the hiring practices pre-date the purchases of each company.

In a 2004 email to Steve Jobs, then CEO of Pixar, Catmull writes of having no “no raid” arrangement with Sony, but “we have set one up with ILM and DreamWorks which has worked quite well.” Catmull writes about wanting to meet with an undisclosed person “and Sony to reach some agreement.”

A spokeswoman for DreamWorks said they do not comment on litigation. The Walt Disney Co. also declined comment.

The Department of Justice filed suit in 2010 against Lucasfilm, Pixar, Apple, Google, Adobe Systems, Intel Corp. and Intuit contending that their “no solicitation” agreements prevented highly skilled employees from commanding better wages and job opportunities. The companies settled the litigation by agreeing to end such practices for a period of five years.

At the time, the Justice Department noted that demand was particularly acute in the digital animation sector. The government’s scrutiny was placed on Lucasfilm and Pixar agreements not to cold call each other’s employees, and another to place limits on counteroffers. DreamWorks and Disney were not named in the Justice Department action. A spokesman for the Department of Justice had no comment on whether other companies than the named defendants were part of its investigation.

While the Justice Department settlement included no compensation for affected employees, in 2011 a former Lucasfilm software engineer filed a class-action lawsuit, and was joined by former employees from the other companies. In a settlement approved by U.S. District Judge Lucy Koh in May, Lucasfilm and Pixar agreed to pay $9 million, and Intuit agreed to pay $11 million.

But last month, Koh expressed skepticism over a proposed $325 million settlement with the remaining company defendants, noting that the employees plaintiffs had originally sought $3 billion, according to the Wall Street Journal.

 

 

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