Judge Dismisses Animation Workers’ Antitrust Suit Over Studio Wage Practices

A federal judge has dismissed a class action lawsuit claiming that The Walt Disney Co., DreamWorks Animation, Sony ImageWorks and other companies violated antitrust laws by conspiring to set animation wages via non-poaching agreements.
U.S. District Judge Lucy Koh, in a ruling issued on Friday, largely cited the statute of limitations in throwing out the complaint filed by former DreamWorks senior character effects artist Robert Nitsch, former ImageMovers Digital production engineer David Wentworth and digital artist Georgia Cano, who held jobs at Rhythm & Hues, Walt Disney Feature Animation and ImageMovers Digital.
Koh concluded that the plaintiffs failed to show “any new or independent actions” taken by the studio defendants after Sept. 8, 2010, the cutoff date for the four-year statute of limitations window. She also concluded that the clock began ticking at the time plaintiffs could show that they were harmed by price-fixing, rather than at the point when they discovered it may be taking place.
Koh said the workers could file an amended complaint within 30 days. She also wrote that even though she dismissed the plaintiffs’ complaint, the studios still have to respond to discovery requests for the workers’ wage-fixing claims.
The workers contended that the roots of the anti-poaching agreements go back to the mid-1980s, when George Lucas and Ed Catmull, the president of Steve Jobs’ newly formed company Pixar, agreed to not raid each other’s employees.

Other companies then joined the conspiracy, the suit contended, with agreements on such things as cold calling and notifying each other when making an offer to an employee of another company. The lawsuit cited emails between Catmull and human resources personnel, and it also claimed that Jobs and Jeffrey Katzenberg, the CEO of DreamWorks Animation, “personally discussed DreamWorks joining the conspiracy.”

Also named as defendants in the suit were ImageMovers, Blue Sky Studios, Lucasfilm and Pixar.

Lucasfilm and Pixar were already targets of a Justice Department antitrust lawsuit in 2010, along with Apple, Google, Adobe Systems, Intel Corp. and Intuit, in which the government contended 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.

But a class-action civil suit was filed in 2011, and during the litigation emails were disclosed which appeared to link other companies to the “no poaching” agreements, including Disney and DreamWorks Animation, who were not named defendants in either that lawsuit or the Justice Department action. In a settlement Koh approved last May, Lucasfilm and Pixar agreed to pay $9 million, and Intuit agreed to pay $11 million.

The animation workers tried to argue that the statute of limitations clock started when they first discovered what they considered evidence of wage fixing — at the time documents from the prior litigation were unsealed — but Koh disagreed. She also rejected their claims that the animation studios were continuing their antitrust violations, writing that the workers failed to show that the studios “did more than passively conceal information.”

The animation studios argued that the claims were “belated attempts to spin off fresh litigation from a DOJ investigation that began more than five years ago, is now well over, and resulted in no proceedings being instituted against the majority of the defendants in this case; and from civil litigation that followed shortly thereafter and is now nearing resolution.”

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