SAN JOSE (CN) – A federal judge this week certified a class of employees and former employees who claim major animation companies conspired to suppress their wages.
U.S. District Judge Lucy Koh on Wednesday allowed the core of the workers’ certification claims to proceed, denying a minor aspect of the claim: to include employees who worked from 2001 until 2003.
Lead plaintiff Robert Nitsch’s original claim, from 2014, covered workers from the previous 10 years. Koh said that to alter the time frame, the plaintiffs would have to fully amend the original complaint.
Nonetheless, Koh ruled in favor of plaintiffs on every major class certification claim, paving the way for a major trial involving the largest animation studios in the world, including Pixar, Disney, LucasFilms and Dreamworks.
The class certification argument centered on the plaintiffs’ methodology to determine which workers qualified. The plaintiffs’ expert, Orley Ashenfelter, used employee data and algorithms to come up with a number of class members.
The defense expert, Michael Keeley, attacked Ashenfelter’s methods, which the studios call unreliable, claiming, among other things, that independent contractors such as actors were included in the model.
But Koh was not persuaded.
“The court does not find persuasive defendants’ criticisms of Dr. Ashenfelter’s methodology,” Koh wrote in her ruling. “Defendants have not presented analysis that undermines the reliability of Dr. Ashenfelter’s analysis, and many of defendants’ arguments are contradicted by the documentary evidence. “
Ashenfelter’s methodology found that wage suppression affected employees throughout the animation industry, not just the production employees who were the alleged subjects of the conspiracy.
Koh also allowed class certification to move forward on fraudulent concealment.
The defense argued at a previous hearing that blog posts and employee comments demonstrated that the wage suppression tactics were commonly known, or known by some of the plaintiffs, so the claims should be individualized and not treated as a class.
But Koh cited rulings in similar cases stating that just because different issues pertinent to the case affect certain class members differently does not undermine their right to be treated as a class.
Nitsch’s September 2014 lawsuit claims major animation studios colluded to fix wages and restrict career opportunities for their artists.
Nitsch, who was a senior character effects artist for DreamWorks and a clothes and hair technical director at Sony Pictures Imageworks, says animation and special effects studios – including Walt Disney and its subsidiaries Pixar and Lucasfilm, Sony Pictures, Digital Domain 3.0 and ImageMovers – conspired to stifle wages and restrict career opportunities for animators, digital artists, software engineers and other technical workers.
The lawsuit mirrors a class action filed against Apple, Google and others in 2010, which claimed their CEOs made “gentleman’s agreements” to restrict competition, and companion wage-setting mechanisms, by not poaching each other’s employees.
Pixar and Lucasfilm settled for $9 million collectively last year, but Koh has rejected a $325 million agreement proposed by Apple, Google, Intel and Adobe in that case.
Nitsch claims the animation studios acted in much the same way as the tech companies, conspiring to deprive artists of “millions of dollars which defendants instead put to their bottom lines.”
The lawsuit continues: “It did so at the same time the films produced by these workers achieved world renown and generated billions in the United States and abroad.”
Nitsch says the scheme dates back to when Apple founder Steve Jobs bought Lucasfilm’s computer graphics division from George Lucas in 1986 and created Pixar.
Nitsch says Jobs, Lucas and Pixar president Ed Catmull agreed not to cold call each other’s employees.
Neither Lucas, Catmull nor Apple are defendants in Nitsch’s complaint.
He claims Pixar and Lucasfilm agreed to notify each other when making an offer to an employee, and agreed not to offer higher pay if the current employer made a counteroffer. And, he says, Jobs and Catmull spread this kind of anti-competitive agreement throughout the animation industry.
“Whenever a studio threatened to disturb the conspiracy’s goals of suppressing wages and salaries by recruiting employees and offering better compensation, the leaders of the conspiracy took steps to stop them,” the complaint states.
The artists say the studios’ cooperation was so thorough they emailed each other salary and budget information.
Nitsch quotes Lucas as saying that “the rule we always had [was] we cannot get into a bidding war with other companies because we don’t have the margins for that sort of thing.”
The other studios used similar practices and pay structures, Nitsch’s complaint states.
After a Department of Justice investigation, Nitsch says, Pixar and Lucasfilm signed settlements prohibiting them from making such nonsolicitation agreements. But Nitsch says the practice continued.
Emails to Robert Van Nest, attorney for the defense, and Jeff Friedman, attorney for the plaintiffs, were not returned Thursday.
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