Judge Gives Preliminary Approval to Settlement in Wage-Fixing Suit Against DreamWorks Animation

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Courtesy of DreamWorks Animation

A federal judge has given the greenlight to a $50 million settlement of a class action lawsuit brought by animation workers against DreamWorks Animation, claiming that the studio violated antitrust laws by conspiring to set animation wages via non-poaching agreements.

U.S. District Judge Lucy Koh gave her preliminary approval to the settlement on Thursday, and said the settlement was “fair and reasonable.”

The settlement provides for a cash payment of $50 million to a class-action fund. The named plaintiffs, Robert Nitsch, David Wentworth, and Georgia Cano, had already reached settlement agreements with Sony Imageworks and Blue Sky Studios.

Other defendants in the case are the The Walt Disney Company, Lucasfilm, Pixar, and ImageMovers, whose cases are still pending.

Koh noted that DreamWorks Animation “has independently agreed to cooperate with plaintiffs in authenticating documents, and in not voluntarily producing any employee to testify at trial for any non-settling defendant.”

Under the terms of the proposed DreamWorks settlement, the class includes certain animation and visual effects workers who worked at DreamWorks from 2004 to 2010; Pixar from 2004 to 2010; Lucasfilm from 2004 to 2010; The Walt Disney Co. from 2004 to 2010; Sony Pictures Animation and Sony Pictures Imageworks from 2004 to 2010; Blue Sky from 2005 to 2010; and ImageMovers from 2007 to 2010.

The plaintiffs’ attorneys are allowed to ask for up to 25% of settlement funds for attorneys fees, and each of the named plaintiffs would receive up to $10,000 each. Exact payments for each employee will be based on a formula, posted on the class action website. The final fairness hearing is scheduled for May 18.

The lawsuit was filed by Nitsch, a former DreamWorks Animation senior character effects artist; Wentworth, a former ImageMovers Digital production engineer; and Cano, a digital artist who held jobs at Rhythm & Hues, Walt Disney Feature Animation, and ImageMovers Digital.

In its settlement, Sony agreed to pay $13 million to the settlement fund, and Blue Sky agreed to contribute $5.95 million.

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 contended, with agreements on such things as cold calling and notifying each other when making an offer to an employee of another company.