Sony, Blue Sky Settle No-Poach Suit for $19 Million | Courthouse News Service
Thursday, November 30, 2023
Courthouse News Service
Thursday, November 30, 2023 | Back issues
Courthouse News Service Courthouse News Service

Sony, Blue Sky Settle No-Poach Suit for $19 Million

A federal judge on Friday granted final approval of a settlement between two major motion picture studios and the animation workers who accused them of wage suppression.

SAN JOSE, Calif. (CN) – A federal judge on Friday granted final approval of a settlement between two major motion picture studios and the animation workers who accused them of wage suppression.

U.S. District Judge Lucy Koh granted final approval to two separate settlements between animation and visual effects workers and Blue Sky Studios and Sony Pictures, respectively. The two studios will disburse a total of nearly $19 million — $6 million from Blue Sky and $13 million from Sony Pictures.

“The court further finds that the settlement agreements are the result of arm’s-length negotiations between experienced counsel representing the interests of the class and the defendants,” Koh wrote in her order.

Preliminary approval of a $50 million settlement with Dreamworks is still pending.

Meanwhile, other major studios named in the class action, including Pixar, Lucasfilm, Disney and ImageMovers Digital, continue to fight the case.

Lead plaintiffs Robert Nitsch, Georgia Cano and David Wentworth stand to receive $10,000 as a part of the settlement.

Of the approximately 10,000 class members in line for a payday, 2,038 have worked at Sony

and 578 have worked at Blue Sky, according to their attorney Brent Johnson.

The recovery for each of the class members averages $1,026.

Nitsch’s September 2014 lawsuit claims major animation studios colluded to fix wages and restrict career opportunities for 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.”

He adds in his lawsuit: “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.

Jobs, Lucas and Pixar president Ed Catmull agreed not to cold-call each other’s employees, Nitsch claims.

Lucas, Catmull and Apple are not parties to Nitsch’s complaint.

He claims Pixar and Lucasfilm agreed to notify each other when making an offer to an employee, and to not offer higher pay if the employer made a counteroffer. He says Jobs and Catmull spread this kind of anticompetitive 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 that 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 says.

Blue Sky is a computer animation film studio based in Connecticut. It is famous for making the films “Ice Age,” “Rio” and “The Peanuts Movie.”

Sony Pictures Animation has a few high-profile films under its belt, including “Open Season,” “Cloudy with a Chance of Meatballs,” “The Smurfs” and “Hotel Transylvania.”

Categories / Business, Employment, Entertainment, Law

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.