WGA Sends ATA Cease and Desist Letter Over Antitrust Practices

“We’re not going to sit back and allow agencies to accuse us in a court of law of the very things they are doing,” WGA says

The Writers Guild of America launched the latest salvo in its continued face-off with Hollywood agencies and their member organization, the Association of Talent Agents, on Friday sending a cease and desist letter to ATA Executive Director Karen Stuart.

In the letter, the WGA upholds its previous accusations that the ATA and its member agencies have engaged in “collusive actions” and “anticompetitive behavior.”

The WGA laid out three specific instances in which it says the ATA and the agencies are engaged in antitrust practices:

  •  Price fixing “standard” 3-3-10 packaging fees
  • Collusively deciding how to split packaging fees
  • Unlawfully refusing to deal with the WGA except through the ATA

“The ATA and its members have continued to collusively impose packaging fees on programs written by WGA-represented writers,” the guild’s lawyers wrote in the cease and desist letter. “The agencies’ collusive agreements have caused tremendous financial harm to the Guild’s members by artificially depressing the compensation paid to writers.”

The letter goes on to say that monies that would otherwise be paid to the writers are instead paid to the agencies as a packaging fee or otherwise left on the table. “As a consequence, the agencies have wrongfully earned hundreds of millions of dollars by virtue of their illegal scheme. This financial cost to the Guild’s members is not offset by the agencies’ practice of waiving its commission on packaged deals,” the letter says.

Representatives for Stuart and the ATA did not immediately respond to requests for comment.

The letter comes the same week that two talent agencies, WME and UTA, sued the WGA, claiming that the guild’s plan to enforce its code of conduct requiring agencies to eliminate packaging fees and affiliated production companies is illegal.

The agencies have accused the WGA of violating antitrust laws, breaking the Sherman Antitrust Act by going beyond what the law allows labor groups to act upon. WME’s lawsuit also claimed that managers and lawyers performing the role of agents are violating the California Talent Agency Act, an assertion that has been made for months by the ATA.

In its letter, the WGA rebuked the notion that the guild is violating antitrust law.

“The ATA and its member agencies enjoy no protections under the antitrust laws other than any derivative labor exemption that might apply to an agreement between the Guild and the ATA or its member agencies. The ATA is not a union and, indeed, concedes that it is involved in ‘a contract negotiation, [and] not a labor dispute and therefore not subject to a collective bargaining process,'” guild lawyers wrote in the letter.

The guild’s disapproval continued in a memo sent to its members on Friday regarding the letter, explaining that “the ATA’s right to negotiate with the Guild existed only because the Guild consented and, in doing so, extended legal protection to the ATA.”

“That accommodation is not the norm. Trade associations such as the ATA don’t typically have the right to bargain for their members as a group; such bargaining is usually an illegal restraint of trade,” the WGA said in its memo to writers. “Because it’s now clear that the ATA is, in fact, the source of restraint of trade within the agency community, we will no longer facilitate that obstacle to a fair agreement.

“We remain available to bargain reasonable, fair terms. But we’re not going to sit back and allow agencies to accuse us in a court of law of the very things they are doing,” the guild continued. “Packaging fees are illegal, and in practice also an illegal form of price fixing. Any competent observer can corroborate these facts.”

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