The Trump Administration could play a major role in 2020 in two ongoing Hollywood labor disputes. Last month, President Donald Trump’s Labor Department said it may sue to force a rerun of SAG-AFTRA’s recent presidential election, and earlier this month, his Justice Department weighed in on the WGA’s ongoing legal battle with WME, CAA and UTA.
The administration’s involvement isn’t welcomed by the leaders of either union, which face contentious contract negotiations next year. The WGA’s film and TV contract expires May 1, and SAG-AFTRA’s on June 30.
When the DOJ tried unsuccessfully to intercede in the WGA’s antitrust suit against the three talent agencies, WGA West president David A. Goodman said, “It’s not surprising that Trump’s Justice Department has filed a brief designed to weaken a labor union’s effort to protect its members and eliminate conflicts of interest by talent agencies.”
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And SAG-AFTRA’s current leadership can’t be any happier about the Labor Department’s ongoing investigation into its recent presidential contest, which saw Gabrielle Carteris defeat Matthew Modine and three other candidates. That probe is expected to wrap up by January 10, after which the DOL could force a rerun of the election.
If it comes to that, a new election could play out while the 145,000-member union prepares for its upcoming contract negotiations with management’s AMPTP. And if Modine were to win a DOL-mandated do-over, his slate has vowed to take a tougher stand at the bargaining table, saying “We have lost hundreds of millions of dollars because our contracts have not kept pace with exhibition platforms as they have evolved. A change in leadership is imperative, in order to prevent history from repeating itself.”
A do-over would not be unprecedented. In 2002, the DOL forced the old Screen Actors Guild to rerun its presidential election after it was discovered the union had sent out incorrect ballots to members in New York. Melissa Gilbert, who defeated Valerie Harper in the first race, beat her again in the rerun.
In a November 15 letter to Carteris, DOL District Director Edgar Oquendo wrote: “This letter confirms our agreement extending the time within which the Secretary of Labor may file suit under Title IV of the Labor-Management Reporting and Disclosure Act of 1959.”
Many of the complaints were brought by supporters of Modine and his Membership First slate, who accused the union’s leadership of a laundry list of election irregularities. The protesters, who welcome the DOL’s intervention, have accused Carteris of using the union’s resources to promote her candidacy, and receiving an improper employer contribution through her work as an executive producer and cast member on Fox’s BH90210, in which she played a fictionalized version of herself as the incorruptible president of the fictional Actors Guild of America. The show premiered during the union’s election.
The union’s national election committee dismissed all allegations, finding that “there was no violation of the SAG-AFTRA Constitution, the election policy, or federal election law.” Carteris denies any wrongdoing, and her Unite for Strength slate has accused her accusers of being “sore losers” whose “frivolous” complaints are a “baseless distraction” that “harms our membership and attempts to prevent us from doing the vital work members elected their leadership to do.”
The Justice Department, meanwhile, is eyeing the WGA’s ongoing legal battle with three of Hollywood’s biggest talent agencies, and recently weighed in on that dispute. The next hearing in the case, on the agencies’ motion to dismiss the WGA’s counterclaims, is set for January 17.
Shortly before Thanksgiving, Makan Delrahim, the Assistant Attorney General for the DOJ’s Antitrust Division, asked a federal judge for permission to participate in a hearing earlier this month on the guild’s motion to dismiss the antitrust lawsuit brought against it by WME, CAA and UTA.
Delrahim told U.S. District Court Judge Andre Birotte Jr. that while “the United States takes no position on the merits of this case,” he urged the court to reject the WGA’s argument that “it can apply the labor exemptions from the antitrust laws in this case on the pleadings.” He also noted that federal law “permits the Attorney General to direct any officer of the Department of Justice to attend to the interests of the United States in any case pending in a federal court. The United States enforces the federal antitrust laws and has a strong interest in addressing the proper application of the labor exemptions from the antitrust laws.”
The WGA objected to the DOJ’s participation at the hearing, prompting Goodman to say that the DOJ’s intrusion was “designed to weaken a labor union’s effort to protect its members…” The judge, who was appointed by President Obama, later denied the DOJ’s petition to take part in the hearing. But even so, it was the first indication that the DOJ’s Antitrust Division has its eye on the dispute. And that could have serious and unforeseen consequences for the industry if there’s any truth to the antitrust allegations that the guild and the agencies have leveled at each other.
In February – two months before it filed suit to end packaging fees and agency affiliations with corporately related production entities – Goodman waxed nostalgic about a decades-old DOJ probe of the agency business, reminding his members that “The last time a powerful talent agency decided it wanted to become a producer was MCA in the 1960s. The Justice Department stepped in and forced Universal to spin off its agency business, because it was an antitrust violation. But now, unfortunately we can’t wait for the current Justice Department to step in.”
Later, the guild noted that “Bobby Kennedy’s Justice Department forced MCA to choose between being a producer or an agency in 1962. MCA chose to produce and became Universal Studios. Writers found plenty of other good agencies to represent them. WME, CAA and UTA face the same choice.”
The guild mentioned the Kennedy-era probe again in a video it dropped last month about the alleged conflicts of interests of so-called “Agency Studios,” but noted that “By 2017, the political landscape had changed, and the big agencies no longer feared being shut down by the Justice Department.
Indeed, this is not Bobby Kennedy’s DOJ, but a Donald Trump Justice Department that is widely viewed as being less sympathetic to organized labor. And it may not bode well for the WGA that before Trump was elected president, the former star of The Apprentice was represented by WME co-CEO Ari Emanuel, who had a much-publicized sit-down with the newly elected president shortly after he defeated Hilary Clinton in 2016 – even though Emanuel, a longtime Democratic donor, had contributed to her primary campaign. And a year earlier, WME-IMG acquired the Miss Universe Organization from Trump.
The guild has made no secret of what it thinks about Trump, regularly lashing at him for his Muslim ban, his assault on transgender rights, and for his widely criticized remarks about the “very fine people” on both sides of the deadly white supremacists’ melee in Charlottesville, VA. After that, the WGA West said that Trump “disgraces our nation,” with then-guild president Howard Rodman calling on him to resign.
The guild has also called out Emanuel by name for being one of the creators of the agencies’ basic 3-3-10% packaging fee model – payments the studios make to the agencies for packaging their shows – an industrywide formula that the guild calls “price fixing.”
The Big Three agencies claim that it’s the guild that’s violating antitrust laws, with CAA saying that it filed suit against the WGA “because the leadership of a labor union is attempting to restrain competition on a staggering scale using illegal means,” including agreements with “non-labor parties” – i.e. showrunners, who are also guild members – “in service of a group boycott and overly restrictive restraints in commercial markets that the union has no authority to regulate, all of which is prohibited by law.”
If the judge greenlights a trial, as it now appears he will, both sides will be entitled to discovery – the opening of books and financial records that each side will use to try and prove that the other is involved in sweeping violations of antitrust laws.
And that could prove to be fertile hunting ground for a probe by the DOJ’s Antitrust Division — in which case each side, the guild and the agencies, may need to carefully reconsider whether or not their hands are entirely clean, and whether they welcome such an investigation. If not, they might consider settling their eight-month dispute and hope the DOJ loses interest and goes away.
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