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UTA Joins WME in Suing Writers Guild, Citing Illegal Group Boycott

UTA has joined WME in filing an antitrust suit against the Writers Guild of America, accusing the union of engaging in an illegal group boycott.

UTA filed suit Thursday morning in federal court in Los Angeles. The complaint mirrors allegations in the suit WME filed earlier this week, accusing the WGA of abusing its collective bargaining authority and engaging in an unlawful “power grab.”

The WGA said it would respond in a few days with own assertions of antitrust conduct by the agencies but gave no details. The WGA has directed its 15,000 members to fire their agents, following the major agencies’ refusal to sign onto a new Code of Conduct, which bars the agencies from collecting packaging fees. The union argues that the fees create an unlawful conflict of interest.

The union filed its own suit against UTA, WME, CAA and ICM Partners in April, seeking to invalidate packaging fees. An estimated 7,000 WGA members fired their agents after the April 13 order that members can only be represented by agencies that have signed the WGA’s Code of Conduct. About 70 agencies have signed the code with Verve being the most prominent.

The UTA suit alleged that the WGA has exceeded its lawful authority as a labor union by organizing “an illegal group boycott” against UTA and other talent agencies. UTA is seeking a court order against the WGA to bar the guild from employing the Code of Conduct. It’s also seeking to recover treble damages along with its attorney’s fees and litigation costs.

“WGA’s boycott, attempting to impose a blanket prohibition on talent agency packaging and agency affiliated production companies, undermines lawful competition and far exceeds any limited exemption WGA has under the antitrust laws,” UTA said in the suit. “To the contrary, WGA’s ban has harmed competition in the packaging market and other markets that WGA has no authority to regulate, has harmed UTA and other talent agencies, and has harmed the very writer-members whom the WGA purports to represent. WGA’s group boycott is a classic, per se violation of the Sherman Act.”

UTA, which has lost about 1,700 WGA members as clients, also accused the guild of favoring the interests of “a few well-heeled individuals” above the interests of its general membership. In packaging deals, writers forego having to pay agents a 10% commission.

“WGA undermined the interests of writers who benefit from the increased opportunities and more favorable economic terms offered to writers, directors, actors and other Hollywood talent by agency-affiliated production companies, when compared to the terms offered by the traditional industry television studios,” UTA added.

The UTA litigation against the guild comes a week after the WGA ended negotiations with the Association of Talent Agents over the new rules the guild has sought to implement to ban the practice of agencies receiving packaging fees from production entities along with barring agencies from having ownership interests in production companies. WGA West president David Goodman said at that point that the WGA would negotiate with the individual agencies but none have agreed to do so, asserting that the ATA is their official bargaining agent.

The agents’ most recent offer would have given writers up to 2% of the packaging fees after the television show became profitable. It’s unlikely that UTA will be able to obtain a court order against the WGA for several months, so the current stalemate will probably continue through the summer.

The WGA responed to the suit on Thursday with the statement: “WME and UTA are correct; there are serious anti-trust violations taking place in Hollywood. But they are all being committed by the ATA and the eight members of its ‘bargaining’ committee, and we will make their violations public in the next day or so.”

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