Cartoon Studios Fixed Wages, Artists Claim

     SAN FRANCISCO (CN) – Major players in the animation industry collude to fix wages and restrict career opportunities for their artists, a former DreamWorks animator claims in a federal antitrust class action filed Monday.
     Robert A. Nitsch Jr., 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 – worked together to stifle wages and restrict career opportunities for animators, digital artists, software engineers and other technical workers.
     Nitsch’s suit mirrors a class action filed against tech giants, Apple, Google and others in 2010 which claimed their CEOs made “gentleman’s agreements” to eliminate competition and companion wage-setting mechanisms by not poaching each other’s employees.
     Pixar and Lucasfilm settled that case for $9 million collectively last year, but a $325 million agreement proposed by Apple, Google, Intel and Adobe has so far been nixed by the federal judge hearing that case.
     According to Nitsch’s complaint, the animation studios acted in much the same way as the tech companies, conspiring to deprive the artists of “millions of dollars which defendants instead put to their bottom lines.”
     The complaint 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 the late Apple founder Steve Jobs bought Lucasfilm’s computer graphics division from George Lucas in 1986 and created Pixar. He claims that the pair, along with Pixar president Ed Catmull, then agreed not to cold-call each other’s employees.
     Neither Lucas nor Catmull, nor Job’s Apple, are defendants in Nitsch’s action.
     Nitsch claims that Pixar and Lucasfilm allegedly further agreed to notify each other when making an offer to an employee, and agreed not to offer higher pay if the employee’s current employer made a counter offer. And Jobs and Catmull spread these kinds of anti-competitive agreements throughout the animation industry, his complaint states.
     “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,” Nitsch says in the complaint.
     The studios’ cooperation was allegedly so thorough that they even emailed each other salary and budget information. In his complaint, 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 Justice Department investigation, Nitsch says Pixar and Lucasfilm signed settlements prohibiting them from make those kinds of nonsolicitation agreements. But the practice continues to this day, according to the complaint.
     “Defendants continue to discuss and agree on wage and salary ranges and prohibit active solicitation of other defendants’ employees through the present,” Nitsch says in his complaint.
     “Defendants communicated among themselves by phone and email and in in-person meetings in furtherance of the conspiracy,” Nitsch adds.
     Nitsch seeks compensatory damages and a permanent ban on making agreements not to solicit other company’s employees. He is represented by Daniel Small of the New York firm Cohen Milstein Sellers & Toll, and locally by Richard Grossman of Pillsbury & Coleman.

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