Judge Refuses to Dismiss Revised Animation Workers’ Wage-Fixing Lawsuit

A federal judge has refused to dismiss a 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 Thursday, said that the plaintiffs “have sufficiently alleged facts showing that defendants reached an agreement to conspire.”

She wrote that the plaintiffs “have alleged that the defendants systematically shared information, agreed not to solicit each other’s employees and that the purpose of the information sharing and no-poach scheme was to suppress wages.”

The lawsuit was filed by former DreamWorks Animation 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.

In April, she threw out their complaint, citing the statute of limitations. But in her most recent ruling, Koh said that the plaintiffs had sufficiently alleged “affirmative acts” of concealment in their revised complaint, sufficient to toll the statute of limitations.

 The workers contend 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 contends, 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 that appeared to link other companies to the “no poaching” agreements, including Disney and DreamWorks Animation, which 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.

News of the judge’s decision was first reported in the Hollywood Reporter.

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