LOS ANGELES (CN) – The Writers Guild of America can’t dodge an antitrust lawsuit by Hollywood talent agencies over an organized boycott on talent packaging deals, a federal judge has ruled.
The WGA will have to answer for a 2019 campaign in which its members publicly fired agents who did not agree to new labor rules which prohibited packaging deals that talent agencies say have been an industry standard for decades.
William Morris Endeavor, United Talent Agency and Creative Artists Agency filed a federal antitrust lawsuit accusing the guild of seeking to upend an agreement over talent packaging through a new code of conduct adopted by WGA. The talent agencies claim the guild’s actions violate the Sherman Antitrust Act.
In his ruling Monday, U.S. District Judge Andre Birotte Jr. found the use of a boycott to force talent agencies to comply with the new code of conduct adopted by WGA “was a predatory device used by defendants to injure plaintiffs.”
The WGA had argued the talent agencies did not suffer an antitrust injury because any injury to competition does not go beyond the impact to the agencies themselves.
But Birotte found the use of the code of conduct “stifles competition in the market for writer-representation services by excluding all talent agencies that decline to agree to the code of conduct, not just plaintiffs.”
This past April, the WGA sued the talent agencies in federal court in a challenge of the agencies’ accounting of packaging deals for work under TV or film proposal packages.
The talent agencies claim from September 1976 through April 2019, the WGA regulated talent agents through a basic agreement that endorsed packaging deals as part of the industry. The guild seeks to overturn the packaging deal agreement through negotiations with the Association of Talent Agents.
According to the talent agencies, the code of conduct adopted by WGA has “coerced or attempted to coerce non-labor parties to join their ‘boycott’ of talent agencies that do not comply with the code of conduct.”
Birotte also advanced the talent agencies’ Labor Management Relations Act claim because the WGA incorrectly argued it has the right to prohibit anyone from representing their members and that the rollout of the code of conduct was not coercion.
The guild’s actions to enforce the governing rules, like the code of conduct, should not “insulate” the WGA from liability for violation of Section 303 of the Labor Management Relations Act, Birotte found.
Meanwhile, the WGA has countersued and accuses the talent agencies of antitrust violations by exclusively making deals through the Association of Talent Agents.
In a statement, the guild vowed to forge ahead in the case.
“A dismissal would have been welcomed, but we appreciate the court’s desire to have a more complete factual record,” the guild said in an email. “We continue to move forward with our case and are confident that the evidence uncovered through discovery will prove the agencies’ conflicts of interest and breach of fiduciary duty that we have detailed in our complaint.”
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