We've Got Hollywood Covered

WME Files Antitrust Lawsuit Against WGA, Says Writer Boycott Is Illegal

Lawsuit comes two months after Writers Guild sued WME and three other top agencies

Two months after being sued along with three other top talent agencies by the Writers Guild of America, William Morris Endeavor on Monday filed a lawsuit against the guild claiming that the union’s decision to have its members leave their agencies to protest packaging fees is in violation of antitrust laws.

In April, WGA members authorized the guild by a 95% vote to enforce a Code of Conduct requiring agencies to eliminate packaging fees — payments to agencies from studios in exchanging for packaging writers, directors and other talent for a project — in order to represent writer clients.

As a result, thousands of guild members terminated their representation, and additional meetings between the WGA and the Association of Talent Agents have failed to break the impasse.

After enforcing the Code of Conduct, WGA filed a lawsuit against WME, Creative Artists Agency, United Talent Agency, and ICM Partners, claiming that packaging fees were a violation of fiduciary duty by agents and against federal and state labor laws.

Now WME, whose parent company, Endeavor, has recently filed to go public, is arguing that the WGA has violated the Sherman Antitrust Act by going beyond what the law allows labor groups to act upon. The lawsuit also claims 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 Association of Talent Agencies, the group representing major agencies.

“Antitrust law’s protection of market competition can be in conflict with labor law’s protection of collective bargaining,” reads the complaint. “Balancing the two, Congress and the courts have granted certain union activity a limited statutory or non-statutory labor exemption to the antitrust laws. When a union crosses the limits of activity protected by the labor exemptions, its conduct becomes fully subject to antitrust scrutiny just like any other organization.”

“WGA has crossed those limits here by coercing members and non-members alike into a network of anticompetitive agreements that restrain competition in commercial markets over which WGA lacks any legitimate labor law authority or interest,” it adds.

The complaint also defends the agency against the WGA’s demands to eliminate packaging fees and affiliated production companies. While the guild deems both to be a conflict of interest since agencies who act as producers are motivated to hold down the cost of talent, the lawsuit argues that what the WGA wants is “grossly over-restrictive, unnecessary to redress any legitimate union concern, and intrude upon commercial activities in markets that WGA has no authority to regulate.”

“Many writers have hired WME because of its packaging services. Writers want to benefit from meeting with, and being paired with, in-demand directors and actors. The ‘package’ of talent often enhances demand for the writer’s script and services and leads to the production of TV shows and movies that would not otherwise get made,” the lawsuit argues.

In a statement sent to TheWrap, WME echoed statements made by the ATA accusing the WGA of not negotiating in good faith, including in recent talks initiated by the two sides which ended with the WGA calling the agencies’ proposal to end the walkout “outrageous” and “a step backward” when it comes to affiliated production companies.

“We took today’s step with careful consideration,” WME said. “The WGA negotiating committee has made it clear both through its legal action and unwillingness to negotiate that it was never interested in making a reasonable deal. We are now left to seek a legal remedy for this dispute.”

“While we wish we were not in this position, we will not capitulate to a leadership group that limits the choices and opportunities available to our clients, and has made repeated attempts to undermine our business.”

Pamela Chelin contributed to this report.